Publication of the draft revised guidelines on state aid in the areas of energy, environmental protection and climate protection

Subject: Publication of the draft revised guidelines on state aid in the areas of energy, environmental protection and climate protection

On 2 June 2021 the Commission published its draft revised guidelines on state aid for energy, environmental protection and climate protection. The aim was to improve and revise the guidelines on state aid for environmental protection and energy for the 2014 to 2020 period.

The published proposal restricts exemptions for energy-intensive businesses in the sectors concerned. The changes have an impact on the planning certainty of many companies, and transparency around the rationale and criteria is therefore very important.

1. What is the rationale behind the reduction in the number of sectors covered from 250 to 50?

2. What criteria and methods have been used to determine which sectors will no longer be covered under the revised guidelines?

Answer given by Executive Vice-President Vestager on behalf of the European Commission (23 February 2022)

1. The Commission endorsed the new Guidelines on state aid for climate, environmental protection and energy (CEEAG) on 21 December 2021 (1). Taking into account the public consultation, 116 sectors are eligible for reductions on certain electricity levies under Section 4.11 of the CEEAG. The Commission considers that an obligation in those sectors to pay the full amount of electricity levies that finance energy and environmental policy objectives increases the risk of activities in those sectors moving outside the Union to locations where environmental disciplines are absent or less ambitious. The impact assessment report accompanying the CEEAG elaborates on the choices made in this review.

2. Carbon leakage risk due to high electricity levies largely depends on the electro-intensity of the sector in question and its openness to international trade. The CEEAG provides that aid can only be granted to undertakings from:

a) sectors at significant risk, for which the multiplication of their trade intensity and electro-intensity at Union level reaches at least 2% and whose trade intensity and electro-intensity at Union level is at least 5% for each indicator;

b) sectors at risk, for which the multiplication of their trade intensity and electro-intensity at Union level reaches at least 0.6% and whose trade intensity and electro-intensity at Union level is at least 4% and 5% respectively.

The sectors meeting those criteria are listed in Annex I of the CEEAG. Additional sectors or subsectors will also be considered eligible, provided that they meet those eligibility criteria and that Member States demonstrate this with data that is representative of the sector or subsector at Union level, verified by an independent expert and based on a time period of at least three consecutive years starting no earlier than 2013.

⋅1∙ Published at https://ec.europa.eu/competition-policy/sectors/energy-and-environment/legislation_en | | ( | | )