Brussels, 16 February 2024
The European Commission has approved, under EU State aid rules, a €4 billion German scheme made available in part through the Recovery and Resilience Facility (‘RRF’) to help companies, which are subject to the EU Emission Trading System (EU ETS), decarbonise their industrial production processes. The measure contributes to achieving Germany’s climate and energy targets, as well as the EU’s strategic objectives of the European Green Deal.
The beneficiaries of the measures will be companies active in sectors subject to the EU ETS, such as the chemistry, metal, glass or paper sectors. In order to be eligible, projects will need to achieve a 60% emission reduction in 3 years and a 90% emission reduction in 15 years compared to the best available conventional technologies based on the ETS benchmarks. The projects that will benefit from the aid will be selected through an open competitive bidding process and will be ranked on the basis two criteria: (i) the lowest aid amount requested per ton of CO2 emissions avoided (i.e. the primary criterion), and (ii) the speed at which the projects can achieve significant CO2 emission reductions.
The Commission assessed the scheme under EU State aid rules, in particular Article 107(3)(c) of the Treaty on the Functioning of the European Union, which enables Member States to support the development of certain economic activities subject to certain conditions, and the Guidelines on State aid for climate, environmental protection and energy (‘CEEAG’), which allow Member States to support measures reducing or removing CO2 emissions.
Executive Vice-President Margrethe Vestager, in charge of competition policy, said:
“This €4 billion aid scheme will support ambitious projects that will significantly reduce the greenhouse gas emissions of industrial production processes in Germany. It will contribute to the EU objective of reaching climate neutrality, while ensuring that any potential competition distortions are kept to the minimum.”
A press release is available online.
Source – EU Commission