Commission approves €103 million Czech state aid scheme to support district heating from biomass

The European Commission has approved, under EU state aid rules, a €103 million Czech scheme to support the production of heat from biomass in existing district heating installations.

The aid will take the form of a green bonus, which consists of a subsidy granted for each gigajoule of heat from biomass supplied to the heat distribution system. The bonus will be determined by the Czech Energy Regulatory Office on an annual basis. The aid amount will be equal to the cost difference of producing heat from biomass compared to producing heat from coal. Eligible beneficiaries are owners of existing heat installations using biomass with a heat output above 1 MW.

The Commission assessed the scheme under EU state aid rules, in particular Article 107(3)(c) of the Treaty on the Functioning of the EU, which allows member states to support the development of certain economic activities under certain conditions, and the Guidelines on state aid for climate, environmental protection and energy (CEEAG). The Commission found that the scheme is necessary and appropriate to promote the use of renewable sources in heat production, in line with the objectives of the REPowerEU Plan. In addition, the Commission found that the scheme is proportionate, as it is limited to the minimum necessary, and has a limited impact on competition and trade between Member States. On this basis, the Commission approved the Czech scheme under EU State aid rules.

The non-confidential version of the decision will be made available under the case number SA.113882 in the state aid register on the Commission's competition website once any confidentiality issues have been resolved.

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