Commission approves amendment to Italian State aid scheme to compensate energy-intensive companies for indirect emission costs
The European Commission has approved, under EU State aid rules, an amendment and budget increase to an Italian scheme that compensates energy-intensive companies for higher electricity prices resulting from carbon costs (‘indirect emission costs’) under the EU Emission Trading Scheme (‘ETS’).
The scheme aims to reduce the risk of these companies relocating their activities to countries outside the EU with less ambitious climate policies, resulting in an increase in global greenhouse gas emissions.
The scheme was originally approved by the Commission in July 2021. Under the scheme, compensation is granted to eligible companies through a partial refund of the indirect emission costs incurred in the previous year, with the final payment to be made in 2031. The aid amount is calculated based on electricity consumption efficiency benchmarks, to ensure beneficiaries are encouraged to save energy. The amended scheme will extend the eligibility to companies active in new sectors deemed at risk of relocating, as listed in the Annex of the amended ETS State aid Guidelines. Italy also notified an increase in the maximum aid intensity from 75% to 80% of the indirect emissions costs solely for sectors already covered by the scheme. The total estimated budget of the amended scheme will increase from €1.5 billion to €3.6 billion and the maximum annual budget from €140 million to €600 million.
The Commission assessed the amended scheme under EU State aid rules, in particular the ETS State aid Guidelines. The Commission found that the amended scheme complies with the requirements set out in the Guidelines. In particular, it found that the amended scheme remains necessary and appropriate to support energy-intensive companies in coping with higher electricity prices and to avoid them relocating. Finally, the Commission concluded that the aid is still proportionate as it continues to be limited to the minimum necessary and will have limited impact on competition and trade in the EU. On this basis, the Commission approved the amended scheme under EU State aid rules.
The non-confidential version of the decision will be made available under the number SA.122463 in the State aid register on the Commission’s competition website once any confidentiality issues have been resolved.
