EC approves state aid to offset CO2 costs

The European Commission on Tuesday gave Portugal the green light to increase the budget for a program to support companies that consume a lot of energy, as part of the costs of pollutant gas emissions, to 275 million euros.

The increase approved this Tuesday, under the state aid regime, offsets part of the electricity bill, which has become more expensive because power plants have to pay for carbon costs in the European carbon dioxide (CO2) emissions market.

Portugal notified a budget increase of 100 million euros in a scheme that had been approved on November 24, 2022, for a total of 275 million euros.

Under the scheme, compensation is granted to eligible companies through a partial reimbursement of indirect emissions costs incurred between 2021 and 2030. If compensation requests exceed the available budget, the amount is reduced proportionally for each participant.

Compensation is granted for indirect emissions costs incurred in the previous year, with the final payment to be made in 2031.

In practice, the aim is to protect industries such as chemicals, metallurgy and paper, which are highly exposed to these increases, and prevent them from being at a disadvantage compared to competitors from outside the European Union.