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Reuters
25-06-2025
- Business
- Reuters
EU eases state aid rules to boost green projects, cut carbon footprint
BRUSSELS, June 25 (Reuters) - Businesses will find it easier to get state aid for projects aimed at cutting their carbon emissions and to switch to green projects while heavy industries will benefit from temporary power price relief under looser rules announced by the European Commission on Wednesday. The new state aid rules, valid until December 2030, are part of the Commission's goal to revitalise Europe's industries with its Clean Industrial Deal to help them better compete with U.S. and Chinese rivals and also encourage them to stay put in Europe. The new rules will make it easier for pension funds, insurers and other private investors to co-invest in green projects. However, industry association Eurometaux said more needs to be done to help European businesses and the new legislation did little to simplify the current regulatory landscape. Under the new rules, state support can be direct grants, tax advantages including tax credits and accelerated depreciation, subsidised interest rates on new loans or guarantees on new loans. The amount of state aid can be up to 200 million euros ($232 million) or based on the funding gap or as a result of a competitive bidding process. Beneficiaries are projects to roll out renewable energy and low carbon fuels, investment aid schemes, direct price support schemes and capacity mechanisms. Heavy industries such as chemicals or cement makers applying for temporary electricity price relief will have to invest in decarbonisation. "The new framework simplifies and speeds up support for decarbonisation, but it goes further: it recognises the state as a strategic investor in our future," Commission Vice-President Teresa Ribera said in a statement. "It's a tool to drive climate ambition, strengthen Europe's resilience, and ensure our industry remains globally competitive," she said. Eurometaux Director General James Watson said, "the Clean Industrial Deal State Aid Framework fails to live up to the Commission's political promises of 'prosperity and competitiveness'." "While we welcome the investment support for critical raw material production, it is crucial to ensure that all enabling conditions are in place to support a strong and sustainable metals sector in Europe," he added. ($1 = 0.8624 euros)
Reuters
06-06-2025
- Business
- Reuters
Metal industry group says new EU state aid rules fail to help
BRUSSELS, June 6 (Reuters) - European Commission plans to revamp state aid rules overlook heavy industry, critical to processing energy transition metals, as they fail to mitigate high energy costs while green rules could penalise them, a metals industry group said in a letter on Friday. The Commission is due to announce new state aid rules on June 26 after a public consultation on its February proposal. "While we are committed to industrial decarbonisation, a framework that is over-focused on this objective and fails to concurrently and robustly address the competitiveness of energy-intensive industries would be a critical error," industry group Eurometaux said in the letter. The group sent the letter this week to Commission President Ursula von der Leyen and the commissioners in charge of climate, industry, energy and competition. The new rules are part of the Commission's goal to revitalise Europe's flailing industries with its Clean Industrial Deal. The spike in energy costs over the last few years due to the loss of Russian natural gas has hit European industry hard. The share of energy has risen to 60% of total operational costs for some smelters versus 40% prior to the 2021-2022 energy crisis. The high costs make the sector increasingly uncompetitive at a time when the EU wants to reduce its over-dependence on third countries, namely China, for strategic materials key to clean tech and power grid infrastructure. U.S. rivals benefit from cheap gas and Chinese firms from massive state aid across the supply chain. "Measures substantially addressing our sectors' competitiveness are absent from the proposed framework. The adopted Clean Industry State Aid Framework must go beyond for immediate support to energy intensives, to cope with very high energy prices," the letter states. "There are currently no mechanisms helping electricity consumers switch to consuming low-carbon electricity sources." Heavy industry cannot fully take advantage of the bloc's rising renewable energy output due to location and daily variability, forcing them to rely on expensive fossil fuels. The draft rules could exclude companies from state benefits owing to their indirect electricity emissions. Further, the letter calls for the Commission to support the return of idled capacity such as Slovalco's aluminium smelter in Slovakia. "Failure to act will inevitably lead to a further loss of our industrial capacity," the group said in its letter.
