The European Commission (EC) has approved the PLN 1.78bn (€417m) Polish scheme designed to compensate energy-intensive firms for indirect CO2 emission costs, considering that the support policy complies with EU State aid rules.
Under the Polish scheme introduced in July 2019 and covering the period 2019-2020, around 300 energy-intensive companies in the steel, chemical and paper sectors among others will receive a partial refund of their electricity costs. Indeed, wholesale power prices surged in 2018, due to mounting power generation costs, in a context of rising coal prices and higher CO2 emission costs. Steelmaker ArcelorMittal decided to temporarily close its Krakow furnace due to surging electricity prices, while other industrial users faced 9-29% increases in electricity prices. The aim of the Polish measure is to restore their competitiveness and encourage them to remain in Poland.
The EC considers the scheme will avoid an increase in global greenhouse gas (GHG) emissions due to companies relocating to countries outside the EU with less stringent environmental regulation.
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