EU extended the state aid scheme for energy prices

The deadline for relaxing the rules expired at the end of 2023

The European Commission has extended for six months (until June 2024) the scheme that allows EU countries to provide assistance to companies affected by energy price spikes caused by Russia’s invasion of Ukraine. This is reported by Euractiv.

The anti-crisis scheme was introduced in March 2022 and expired on December 31, 2023.

This temporary measure allows member states to provide various forms of financial assistance to compensate companies affected by high gas and electricity prices.

Although energy prices have stabilized since last year, the EC noted that «energy markets remain vulnerable» as the war in Ukraine and broader geopolitical tensions continue to pose risks and remain sources of uncertainty.

«Member states can maintain their support schemes to cover the upcoming winter heating period as a safety net,» the statement said.

However, Brussels noted that EU countries can continue to provide support by covering part of the additional energy costs only as long as energy prices are significantly higher than pre-crisis levels.

Earlier, the EC stated that it would extend the easing of state aid rules until March 2024, but the institution took into account the feedback received from EU countries.

The EU usually strictly controls state aid to companies to avoid distorting competition and protect the bloc’s single market.

The changes announced earlier this week, Reuters reports, cover not only compensation for high energy prices, but also some broader aspects, such as increasing the aid ceilings for agriculture and other sectors.

The sections related to liquidity support in the form of state guarantees and subsidized loans, as well as measures aimed at reducing electricity demand, will not be extended beyond the end of this year.

«Chapters relating to the transition to a zero-emission economy, which is necessary to further decarbonise the European economy and accelerate the achievement of greater independence from fossil fuels, are not affected by the amendment and will remain in force until 31 December 2025,» the European Commission reported.

As GMK Center reported earlier, in November 2023, the German government presented a large-scale relief plan to reduce electricity prices for industry. It is designed for about five years, and in 2024 alone it can cost up to €12 billion.