EU to ease state aid rules, helping heavy industry secure cheaper electricity

The European Union will ease state aid rules to support green projects and reduce its carbon footprint. Heavy industry will benefit from temporary relief on electricity prices under the more flexible rules presented today by the European Commission (EC) on its website. The measures are intended to help revive EU industry, support it in competing with the United States and China, and keep it in Europe.

The aim is to accelerate the transformation of industry towards climate neutrality without harming the economy too much. The subsidies are intended to support energy-intensive businesses that compete internationally for a transitional period.

Specifically, the new framework allows a discount of up to 50 percent on the wholesale price of electricity, but only for a maximum of half of a company's annual electricity consumption. In addition, the price cannot fall below 50 euros (roughly CZK 1,240) per megawatt-hour as a result of the subsidies.

The measures are also time-limited. Subsidies may be granted for a maximum of three years and must expire no later than the end of 2030.

The new rules will also make it easier for pension funds, insurers and other private investors to co-invest in green projects. Under the rules, state aid may take the form of direct grants, tax benefits including tax deductions and accelerated depreciation, subsidised interest rates on new loans, or guarantees for new loans. State aid may amount to up to 200 million euros (CZK 4.95 billion).

“The new framework simplifies and speeds up support for decarbonisation, but goes further: it recognises the state as a strategic investor in our future,” said Teresa Ribera, European Commission Executive Vice-President for a Clean, Just and Competitive Transition. “It is a tool that supports climate ambitions, strengthens Europe’s resilience and ensures that our industry remains globally competitive,” she added.