Brussels: The European Commission has adopted new amendments to compensation schemes for energy-intensive industries, aiming to ease the burden of complying with European Union emissions rules. This move is intended to encourage companies to maintain their investments within the bloc.
According to Kuwait News Agency, the new amendments relax the rules on "State aid," which allows member states to compensate industries for part of the increase in electricity bills that result from higher power generation costs driven by carbon prices. The European Commission emphasized that the updated guidelines will help prevent "carbon leakage," a scenario where companies relocate production to countries outside the European Union with weaker emissions constraints, or when European products are replaced by imports with higher carbon intensity.
The Commission noted that the list of industrial sectors eligible for compensation under the EU Emissions Trading System has been expanded to include 20 additional sectors. These include the manufacture of organic chemicals and certain activities in the ceramics, glass, and battery sectors, reflecting the significant rise in emissions costs in recent years.
Furthermore, the Commission explained that this expansion is necessary as it exposes a larger number of sectors to the risk of carbon leakage compared to the past. They affirmed that the inclusion of additional sectors will enhance the competitiveness of European industry while continuing to incentivize a progression towards emissions reduction and decarbonisation.