EU approves Italy state aid for energy intensive firms

Photo: EPA

The European Commission announced it had given green light to the plans of Italy to partially compensate energy-intensive companies for higher electricity prices resulting from indirect emission costs under the EU Emission Trading Scheme (ETS). The scheme will cover indirect emission costs incurred in the period 2020-2030, with a provisional budget of approximately €1.49 billion.

The measure will benefit companies active in Italy in sectors facing significant electricity costs and which are particularly exposed to international competition. The compensation will be granted through a partial refund of indirect ETS costs to eligible companies.

The Commission assessed the measure under its Guidelines on certain State aid measures in the context of the greenhouse gas emission allowance trading scheme. In particular, the assessment was carried out under the post-2012 Guidelines for aid compensating costs incurred in 2020, and under the post-2021 Guidelines for aid compensating costs incurred in the period between 2021-2030.

The applicability of the post-2012 ETS Guidelines for aid covering costs incurred in 2020 derives from the specific characteristics of the indirect ETS costs compensation system, under which aid can be requested and paid ex-post in the year following the one in which the costs have occurred. The Commission found that the measure is in line with the requirements of the applicable Guidelines. In particular, the scheme will help avoid an increase in global greenhouse gas emissions due to companies relocating to countries outside the EU with less stringent environmental regulation. Furthermore, the Commission concluded that the aid granted is limited to the minimum necessary.

 

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