EU plans ditching carbon cost refund for seven industrial sectors

(EurActiv, 16 Jan 2020) The European Commission has proposed removing mining activities and fertiliser manufacturing from a list of heavy industries eligible for state aid, arguing EU climate policies no longer put them at risk of relocating production outside Europe.

While attention on Tuesday (14 January) focused on the EU’s proposed €1 trillion financial plan to mobilise green investments over the coming decade, many industry lobbyists were looking elsewhere.

In a proposed tweak to EU state aid rules, the Commission suggested reducing the number of industries eligible to receive compensation for the costs incurred from their inclusion in the EU’s carbon market, the Emissions Trading Scheme (EU ETS).

This includes compensation for the direct costs of buying allowances on the EU carbon market and the indirect costs of buying electricity “since electricity producers pass on the carbon price” to industrial consumers, the Commission explained.

The draft revised ETS state aid guidelines aim to “shorten the number of sectors eligible for compensation from 14 to 8” in order to focus on those which are most at risk of relocating, the Commission said in a statement.

Brussels also seeks to lower the compensation rate from 85% to 75%, “exclude compensation for non-efficient technologies” and make reparations “conditional upon decarbonisation efforts by the companies concerned”.

The draft is still subject to change and interested parties have until 10 March to provide comments.

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EurActiv, 16 Jan 2020: EU plans ditching carbon cost refund for seven industrial sectors