BMWi: Revised Guideline on Compensation of Indirect CO2 Expenses

After publication on 6 August 2013 in the Federal Register (Bundesanzeiger), the revised guideline on state aid measures regarding indirect CO2 expenses has come into force. The revised guideline was approved by the European Commission.

The guideline is based on Art. 10a (6) of Directive 2003/87/EC allowing member states to grant state aid to industrial sectors in which a transfer of production is possible because of higher costs due to the emission allowance trading system (ETS). The affected sectors were fixed by the Commission and include the steel, the non-ferrous metal and the chemistry sector. Higher expenses of energy producers because of the ETS are usually passed on to the consumers, among them the energy intensive industries, through higher electricity prices. The higher costs for the industry are thus also referred to as “indirect CO2-costs”.

According to the guideline, the respective industries may be granted compensation on the basis of indirect CO2 costs incurred in the previous year. However, affected industries shall not legally be entitled to the payments, but the decision lies in the discretion of the competent authority, the German Emissions Trading Authority DEHSt at the Federal Environment Agency. Compensations are limited to 2020. Furthermore, incentives will be reduced in three steps (from granting 0.85 till 2015, to 0.8 till 2018 to 0.75 till 2020, ie 85% of the declared costs are recoverable till 2015, 80% till 2018, etc.).

The Federal Minister of Economic Affairs, Philip Rösler, welcomed the new provisions as strengthening the competitiveness of the energy intensive industry. “This is a positive signal for the energy intensive industry in Germany. It has to be avoided that important industries move to third countries with a less ambitious climate policy”, Mr. Rösler said.

Sources: press release BMWi, revised guideline

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