The European Commission has approved changes to Italy’s State aid scheme that compensates energy-intensive companies for higher electricity prices linked to carbon costs under the EU Emissions Trading System.
The scheme covers so-called “indirect emission costs” — extra electricity costs passed on to firms because power producers factor in the price of carbon allowances required under the EU ETS, the Commission informed on Monday.
Italy’s scheme was first approved in July 2021, with compensation paid as a partial refund of indirect emission costs incurred in the previous year and final payments due in 2031.
Under the amended plan, eligibility will be extended to companies in additional sectors considered at risk of relocating outside the EU, based on a list in the annex of the updated ETS State aid Guidelines.
Italy has also notified a rise in the maximum aid intensity from 75% to 80% of indirect emission costs, but only for sectors already covered by the scheme.
The total estimated budget will rise from €1.5 billion to €3.6 billion, while the maximum annual budget will increase from €140 million to €600 million.
How the Commission assessed the changes
The Commission said it assessed the amendment under EU State aid rules, particularly the ETS State aid Guidelines.
It concluded the updated scheme meets the requirements set out in those guidelines and approved it under EU State aid rules.
A non-confidential version of the decision will be published in the Commission’s State aid register under case number SA.122463 once confidentiality issues have been resolved.
