The European Commission has approved, under EU State aid rules, a French scheme to partially compensate energy-intensive companies for higher electricity prices resulting from indirect emission costs under the EU Emission Trading System (‘ETS’).
The scheme notified by France, with a total estimated budget of €13.5 billion, will cover part of the higher electricity prices arising from the impact of carbon prices on electricity generation costs (so-called ‘indirect emission costs’) incurred between 2021 and 2030.
The support measure is aimed at reducing the risk of ‘carbon leakage’, where companies relocate their production to countries outside the EU with less ambitious climate policies, resulting in increased greenhouse gas emissions globally.
The measure will benefit companies active in sectors at risk of carbon leakage listed in Annex I to the Guidelines on certain State aid measures in the context of the greenhouse gas emission allowance trading scheme post-2021 (‘ETS State aid Guidelines’). Those sectors face significant electricity costs and are particularly exposed to international competition.
The compensation will be granted to eligible companies through a partial refund of the indirect emission costs incurred in the previous year. Beneficiaries will receive a partial advance payment each year, which will be completed in the following year.
The final payment will be made in 2031. In view of the necessary time to prepare the measure and the exceptional circumstances related to the current energy crisis, the deadline for the aid payments for 2021 is 28 April 2023.
The maximum aid amount per beneficiary will be equal to 75 % of the indirect emission costs incurred. However, in some instances, the maximum aid amount can be higher to limit the remaining indirect emission costs incurred to 1.5 % of the company’s gross value added.
The aid amount is calculated based on electricity consumption efficiency benchmarks, which ensure that the beneficiaries are encouraged to save energy.