Brussels: The European Commission has adopted an amendment to the Guidelines on certain State aid measures related to the system for greenhouse gas emission allowance trading post-2021, known as the 'ETS State aid Guidelines'. This move is aimed at addressing the increasing risk of carbon leakage for energy-intensive industries exposed to international competition.
According to Cyprus News Agency, the amendment comes in response to the sustained rise in emission costs since the original adoption of the ETS State aid Guidelines in 2020. This increase has heightened the risk of carbon leakage for sectors not previously considered at genuine risk, necessitating adjustments to ensure equitable and efficient protection while maintaining incentives for these industries to invest in decarbonization.
The Commission's amendments include several key changes: the extension of the list of industrial sectors eligible for compensation, an increase in aid intensity from 75% to 80% for sectors that were already eligible, and an option for Member States to notify additional sectors or subsectors not included in the amended list of eligible sectors. Furthermore, large beneficiaries are now required to contribute to the green transition by investing a portion of the aid in projects aimed at reducing electricity system costs.
These amendments aim to maintain a level playing field by setting out conditions for cumulating aid under the ETS State aid Guidelines with other measures. The changes reflect the Commission's ongoing commitment to balancing the need for industrial competitiveness with the imperative of environmental sustainability.