The European Commission has approved a €13.5bn French scheme to partially compensate energy-intensive companies that have been particularly hit by higher electricity prices resulting from the impact of CO2 prices on power generation costs ("indirect emission costs") under the EU Emission Trading System (ETS).
The support scheme is aimed at covering part of the higher electricity prices from indirect emission costs incurred between 2021 and 2030 and at limiting the risk of carbon leakage (relocation of production to less climate-ambitious countries, outside the EU). It will support energy-intensive companies active in sectors at risk of carbon leakage through a partial advance payment each year, based on 75% of the indirect emission costs incurred in the previous year, which will be completed in the following year with final payment in 2031.
In July 2022, the European Commission had already approved a €5bn French scheme to support energy-intensive companies hit by the recent increase in energy prices in 2022. The aid, which is open to energy-intensive corporations across sectors, with the exception of credit and financial institutions, will take the form of direct grants for additional costs due to severe increases in natural gas and electricity prices, with a maximum aid of 80% of the losses incurred.
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