States can support businesses with high energy costs for longer

The European Commission has extended a scheme that allows EU countries to help companies affected by last year’s sharp rise in energy prices. Member States can therefore provide financial assistance to businesses for six months longer, until June 2024.

The scheme, which was originally due to run until the end of December 2023, was introduced a month after Russia invaded Ukraine in February 2022, triggering a sharp rise in prices as gas supplies to Europe were restricted. The Commission said it had taken this step because, despite prices stabilising, “energy markets remain vulnerable”.

The temporary measure allowed—and, following the extension, will continue to allow—the 27 EU Member States to provide various forms of financial assistance to compensate companies affected by high gas and electricity prices, Euractiv reports.

“Member States can maintain their support schemes to cover the upcoming winter heating period as a safety net,” it said in a statement.

Brussels has stipulated, however, that subsidies are permitted “only insofar as energy commodity prices significantly exceed pre-crisis levels”. The EU usually strictly monitors state aid to companies to prevent competition from being distorted and to protect the bloc’s single market.