The European Commission announced on Wednesday that it has decided to temporarily allow member states to offer higher subsidies and discounts on electricity prices to certain businesses. This measure is intended to ease the burden on industrial sectors grappling with the current energy crisis. To achieve this, the Commission is relaxing its strict rules regarding state subsidies.
This new, provisional framework for state aid is in place until December 31, 2026. Its goal is to mitigate the effects of the crisis-attributed to the Iran-linked situation-on key sectors that are heavily affected, including agriculture, fisheries, transport, and energy-intensive industries.
Under the updated rules, member states are required to notify the Brussels authorities about their planned actions. The framework permits the covering of up to 70 percent of the extra costs generated by price increases in fuels and fertilizers due to the crisis. Additionally, a simplified option has been introduced, allowing subsidies to be provided without requiring detailed proof of actual consumption.
For particularly energy-intensive industries, the support for electricity costs can be significantly increased from 50 percent up to 70 percent, and this can be done without mandating additional investments in decarbonization.
The Commission is prepared to evaluate temporary measures on a case-by-case basis to lower electricity costs. This provision complements the existing support mechanisms available to member states, which were previously prompted by the European Council to counteract the sharp price spikes in fossil fuels.