State aid: Commission approves €396 million Spanish scheme to support energy-intensive companies

The European Commission has approved, under EU State aid rules, the reintroduction of a €396 million Spanish scheme to reduce electricity consumption levies imposed on energy-intensive companies. The original scheme was approved by the Commission in January 2021 (SA.54558) and expired in December 2022. The scheme aims at mitigating the risk that, due to these levies, energy-intensive companies may relocate their activities to locations outside the EU with less ambitious climate policies.

The measure will benefit companies active in 114 sectors listed in Annex 1 of the 2022 Guidelines on State aid for climate, environmental protection and energy  (‘CEEAG'). Those sectors rely heavily on electricity and are particularly exposed to international trade. Beneficiaries will receive a levy reduction between 75 and 85%, depending on their risk exposure. The applicable reduction must not result in a levy below 0.5 EUR/MWh.

Under the scheme, which will run until 31 December 2028, beneficiaries will have to either: (i) perform certain energy efficiency investments, (ii) invest at least 50% of the aid in greenhouse gas emission reduction projects, or (iii) cover at least 30% of electricity consumption with renewable sources (‘RES'). Moreover, beneficiaries of a levy reduction of 75% can receive higher aid if they cover at least (i) 50% of electricity consumption with RES and (ii) 10% of consumption through a RES Power Purchasing Agreement or 5% through on-site RES generation.

The Commission assessed the measure under EU State aid rules, in particular Article 107(3)(c) of the Treaty on the Functioning of the EU, which enables Member States to support economic activities under certain conditions, and the CEEAG. The Commission found that the scheme facilitates the development of economic activities relying heavily on electricity and particularly exposed to international competition. In addition, the measure is necessary and appropriate to contribute to achieving the European Green Deal objectives. Moreover, the measure is proportionate, as (i) the individual aid amounts comply with the CEEAG conditions and (ii) it is limited to sectors listed in the CEEAG. Therefore, the positive effects of the scheme outweigh any possible negative effects on competition and trade in the EU. On this basis, the Commission approved the Spanish scheme under EU State aid rules.

The non-confidential version of the decision will be made available under the number SA.102006 in the State aid register on the Commission's competition website once any confidentiality issues have been resolved.