Brussels, 8 August 2024
The European Commission has approved, under EU State aid rules, amendments to a Slovak scheme to partially compensate energy-intensive companies for the electricity levy financing support to renewable energy production. The scheme aims at mitigating the risk that, due to this levy, energy-intensive companies may relocate their activities to locations outside the EU with less ambitious climate policies. The original scheme was approved by the Commission in September 2019.
The amendments align the scheme with the 2022 Guidelines on State aid for climate, environmental protection and energy (‘CEEAG’) and extend its duration until 31 December 2030. The total budget following the amendments is approximately €300 million, while the annual budget of €40 million remains unchanged.
The amended scheme will benefit companies active in sectors listed in Annex 1 of the CEEAG. Those sectors rely heavily on electricity and are particularly exposed to international trade. Beneficiaries will receive a levy reduction between 75% and 85%, depending on their risk exposure. The applicable reduction must not result in a levy below 0.5 EUR/MWh. Under the scheme, beneficiaries will have to implement recommendations set out in the energy audit report or cover at least 30% of their electricity consumption with carbon-free sources.
The Commission assessed the amended scheme under EU State aid rules, in particular Article 107(3)(c) of the Treaty on the Functioning of the EU, which enables Member States to support economic activities under certain conditions, and the CEEAG. The Commission found that the scheme continues to facilitate the development of economic activities relying heavily on electricity and particularly exposed to international competition. In addition, the scheme remains necessary and appropriate to contribute to achieving the European Green Deal objectives. Moreover, the scheme is proportionate as the individual aid amounts do not exceed the maximum aid amount allowed under the CEEAG. The Commission concluded that the positive effects of the scheme outweigh any possible negative effects 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.110954 in the State aid register on the Commission’s competition website once any confidentiality issues have been resolved.
Source – EU Commission