Heavy industries will receive temporary electricity price relief under new EU state aid rules due to be announced on Wednesday, a European Commission draft showed, amid criticism from companies over high energy costs and burdensome green rules.
Earlier this month, industry group Eurometaux sent a letter to Commission President Ursula von der Leyen in which it warned about the metals sector’s falling competitiveness against U.S. and Chinese rivals.
Under the new rules – part of the Commission’s goal to revitalise Europe’s flailing industries with its Clean Industrial Deal – companies would be able to benefit from electricity price relief for up to three years, but not beyond Dec. 31, 2030.
“Until the decarbonisation of the Union’s electricity system fully translates into lower electricity prices, industries within the Union will continue to face higher costs compared to competitors in jurisdictions with less ambitious climate policies,” the draft seen by Reuters said.
“This situation poses particular challenges for sectors… exposed to international trade and heavily dependent on electricity for value creation.”
The relief will not cover more than half of the yearly average wholesale price and not more than 50% of the company’s annual electricity consumption, the document showed.
Further, energy-intensive industries will have to make investments using part of the state aid that “contribute to the green transition”.
Member states will be able to choose the maximum level of state aid, but they will need Commission approval if the funding gap exceeds 200 million euros ($232.4 million), or 10% of the project’s budget.
The new rules state that low-carbon nuclear projects could benefit from aid, along with solar, wind and hydrogen, among other renewable sources.
“The Commission will conduct a timely assessment of state aid cases for nuclear supply chains and technologies, including for small modular reactors,” the document said.
($1 = 0.8607 euros)
(Reporting by Julia Payne)
