Commission: Greek scheme approved for the amount of 1.36 billion euros to compensate energy-intensive businesses

The European Commission has given the green light, under EU state aid rules, to a Greek scheme for partial compensation of energy-intensive businesses for the increase in electricity prices as a result of the cost of indirect emissions under its emissions trading system EU (“ETS”).

The Greek measure

The scheme notified by Greece, with a total estimated budget of €1.36 billion, will cover part of the increase in electricity prices due to the impact of coal prices on the cost of electricity production (the so-called “indirect emission cost”) which will arise in the period 2021-2030. The support measure aims to limit the risk of “carbon leakage”, i.e. the transfer of production by companies to countries outside the EU with less ambitious climate policies, resulting in an increase in greenhouse gas emissions worldwide.

The measure will benefit companies operating in sectors at risk of carbon leakage and listed in Annex I of the guidelines on certain State aid measures under the post-2021 greenhouse gas emission allowance trading scheme (“State aid guidelines under of SEDE”). These sectors face significant electricity costs and are particularly exposed to international competition.

The offset will be granted to eligible companies through a partial refund of indirect emission costs incurred in the previous year. The final payment will be made in 2031. Taking into account the time required to draw up the measure and the exceptional circumstances related to the current energy crisis, the deadline for payment of the aid for the year 2021 is 30 April 2023.

The maximum aid amount per beneficiary will be equal to 75 % of the resulting indirect emission costs. However, in some cases, the maximum aid amount may be higher in order to limit the remaining indirect emission costs to 1.5 % of the company’s gross added value. The amount of aid is calculated on the basis of benchmarks for the efficiency of electricity consumption, so that beneficiaries are encouraged to save energy.

To be eligible for compensation, beneficiaries should either i) implement certain energy audit recommendations, or ii) cover at least 30% of electricity consumption with renewable energy sources, or iii) invest at least 50% of the amount of the aid to projects that result in a significant reduction of the installation’s greenhouse gas emissions. Beneficiaries must comply with one of these obligations within three years of the granting of the aid.

The Commission’s assessment

The Commission assessed the measure under EU State aid rules, in particular the State aid guidelines under the ETS.

The Commission considered that the scheme is necessary and appropriate to support energy-intensive businesses to cope with rising electricity prices and to avoid companies relocating to non-EU countries with less ambitious climate policies, resulting in increased of global greenhouse gas emissions. In addition, the Commission considered that the scheme complies with the requirements on energy audits and management systems set out in the State aid guidelines under the ETS. As such, it contributes to the achievement of the EU’s climate and environmental targets as well as the targets set out in the European Green Deal. In addition, the Commission concluded that the aid granted is limited to the minimum necessary and will not have an unjustified negative impact on competition and trade in the EU.

In particular, the Commission considered that, given the exceptional circumstances due to the energy crisis invoked by Greece, a reasonable grace period for the payment of the aid for 2021 is justified.

On this basis, the Commission approved the Greek regime under EU state aid rules.

Athena Papakosta

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