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Brussels reduces the list of those who receive aid for indirect CO 2 emissions

The European Commission has updated the list of sectors that are considered “exposed to the risk of carbon leakage” and that can receive public support in each Member State to compensate for the higher costs caused by indirect greenhouse gas emissions.

In particular, Brussels has adopted the new guidelines on State aid linked to the Emissions Trading System (ETS) and which will apply from 1 January 2021.

These guidelines seek to reduce the risk of some companies moving their production to countries outside the EU and with less ambitious environmental policies (the so-called ‘carbon leakage’). To this end, they give European governments permission to grant aid to companies in sectors where this may occur, compensating firms for indirect costs attributable to CO2 emissions that raise electricity prices.

In a statement, the EU Executive explained that with the new guidelines, public aid will focus “only” on sectors that present a risk of carbon leakage and that have a “strong exposure” to international trade.

On the basis of an “objective” methodology, they provide for a list of ten sectors and twenty subsectors to which such aid may be granted. The previous list, in force since 2012, included a total of fourteen sectors and seven subsectors.

In addition, they establish a “stable” compensation percentage of 75%, compared to 85% in the previous period, and exclude compensation for inefficient technologies, with the aim of maintaining the incentives of companies to improve energy efficiency.

Thirdly, the new guidelines make access to compensatory aid conditional on additional decarbonisation efforts by companies, such as compliance with recommendations made in their audits.

For the Vice-President of the European Commission responsible for Competition, Margrethe Vestager, this revision of the guidelines “allows Member States to support those sectors that are most at risk of carbon leakage” and at the same time “contribute to achieving a profitable decarbonisation of the economy, avoiding overcompensation and undue distortions of competition in the single market”.

“To sustainably fight climate change and achieve the goals of the Green Deal, we need to put a price on carbon emissions, while preventing carbon leakage. The revised guidelines on state aid linked to the EU Emissions Trading System that are being adopted today are an important element of this project,” said the Dane.

Source: The Spanish