Draft EU Clean Industry Agreement provides for incentives and state aid – Reuters

The draft European Clean Industrial Deal contains proposals for certain incentives, energy price reductions, and a revision of the CBAM before its full launch, Reuters reports.

A package of measures to help European industry remain competitive while reducing carbon emissions will be proposed by the European Commission next week.

According to the agency, the draft agreement, in particular, contains proposals to reduce energy prices. Among other things, it outlines plans to launch a European Investment Bank (EIB) scheme by the end of March that will provide guarantees to small companies to sign electricity purchase agreements to secure supplies from renewable electricity producers at predictable prices.

The EIB will also offer support to manufacturers of grid components to modernize outdated electrical infrastructure.

The EU’s legislative proposal in the fourth quarter of this year will provide for accelerated permitting of energy-intensive industries to help increase investment in green industrial projects. Brussels will also recommend that the 27 EU countries reduce electricity taxes to the minimum level set by law to help reduce bills in the short term. In addition, the EC plans to relax the current EU targets for filling gas storage facilities.

According to the EU’s planned measures, it will be easier for businesses to receive state aid and other financial incentives for projects aimed at reducing carbon emissions. In particular, it is proposed to allow the governments of the bloc countries to provide tax incentives for environmentally friendly industrial investments through measures such as accelerated depreciation.

According to the draft agreement, these changes will be made to the EU’s simplified state aid rules, which are to be published by July this year. The EU will also help countries use national support to combat energy price spikes.

Next year, the EU public procurement rules will be revised to include criteria for purchasing European products.

The draft Clean Industry Agreement also states that the bloc will continue to use anti-dumping and anti-subsidy duties to prevent cheap imports of environmentally friendly technologies, especially from China.

The planned CBAM will also be reviewed before the bloc starts levying a border carbon tax on imports covered by the mechanism in 2026. The EU plans to simplify the rules, potentially applying the levy to only 20% of the companies covered by the scheme.

In addition, according to the draft, the EC will propose a scheme to finance industrial projects to reduce CO2 emissions through revenues from the EU carbon market.

As GMK Center reported earlier, in February this year, IndustriAll Europe, the trade union federation, called on the EU to take urgent measures to prevent the deindustrialization of the region and invest in industrial jobs.