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Commission approves amendment to Portuguese state aid scheme to compensate companies for indirect emission costs

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The European Commission has approved, under EU state aid rules, a budget increase to a Portuguese scheme to compensate energy-intensive companies for higher electricity prices resulting from carbon costs (‘indirect emission costs') under the EU Emission Trading Scheme (‘ETS'). 

The scheme was originally approved by the Commission on 24 November 2022. Under the scheme, compensation is granted to eligible companies through a partial refund of the indirect emission costs incurred between 2021 and 2030. If the compensation requests are higher than the available budget, the amount is proportionally reduced for each participant. Compensation is granted for indirect emission costs incurred in the previous year, with the final payment to be made in 2031. Portugal notified a budget increase of €100 million to avoid compensation being significantly reduced, bringing the overall budget to €275 million.

The Commission assessed the amended scheme under EU State aid rules, and in particular the Guidelines on certain state aid measures in the context of the greenhouse gas emission allowance trading scheme post-2021 (‘ETS State aid Guidelines'). The Commission found that the amended scheme continues to comply with the requirements set out in the ETS State aid Guidelines. In particular, it found that the amended scheme remains necessary and appropriate to support energy-intensive companies to cope with higher electricity prices and to avoid companies relocating to countries outside the EU with less ambitious climate policies, resulting in increasing global greenhouse gas emissions. Finally, the Commission concluded that the aid granted continues to be limited to the minimum necessary and will not have undue negative effects on competition and trade in the EU. On this basis, the Commission approved the amended scheme under EU State aid rules. 

The non-confidential version of the decision will be made available under the number SA.120081 in the state aid register.

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