By amending the rules on certain State aid measures under the Emissions Trading System (ETS), adopted last 23 December, the European Commission intends to mitigate “the heightened risk of carbon leakage [...] for energy-intensive sectors”.
This risk - which arises when companies relocate their production to countries outside the EU where emission constraints are less stringent, or when EU products are replaced by more carbon-intensive imports - is increasing due to the steady rise in emission costs under the EU’s ETS in recent years.
The ETS State aid guidelines adopted in 2020 define the conditions under which aid granted under this system may be combined with aid granted by other means.
20 new eligible sectors. The Commission is now extending the list of industrial sectors eligible for aid to 20 new sectors and two new sub-sectors, such as mineral extraction, the manufacture of organic chemicals and certain activities in the ceramics, glass and battery sectors.
For sectors already eligible before the amendment, such as the metallurgy and steel industries, the maximum aid intensity has been raised from 75% to 80%, to take into consideration their increased risk of carbon leakage.
Member States also have the option of notifying sectors or sub-sectors not included in the list, if they demonstrate that they are “exposed at a genuine risk of carbon leakage”.
The major beneficiaries are then required to invest part of the aid in projects that help to reduce electricity system costs.
Finally, the Commission is introducing an update of the maximum regional CO2 emission factors in different regions (the CO2 content of fossil fuels used to generate electricity in a given geographical area) for the period 2026-2030, which are used to determine the amount of aid.
To see the amendment: https://aeur.eu/f/k5u (Original version in French by Pauline Denys)