Green Forum • 21 November, 2024 at 8:27 AM
The European Commission has approved, under EU State aid rules, a €578 million Romanian scheme to lower an electricity levy rate for energy-intensive companies
The levy is intended to promote electricity from renewable energy sources. The scheme aims at mitigating the risk that, due to this levy, energy-intensive companies may relocate their activities to locations outside the EU with less ambitious climate policies.
In 2011, Romania introduced green certificates for promoting electricity from renewable sources, under which eligible producers of electricity from renewable energy sources receive green certificates for each megawatt hour produced and delivered to the grid. Electricity suppliers are obliged to purchase a mandatory quota of green certificates. The costs of the green certificates are ultimately passed on to consumers through a levy.
The scheme is aimed at lowering the levy rate for energy-intensive companies, thus mitigating the risk that the companies relocate their activities to locations outside the EU with less ambitious climate policies. The scheme will run until 31 December 2031 and has an estimated budget of €578 million.
The measure will benefit companies in 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, beneficiaries will have to either (i) implement certain energy audit recommendations, (ii) cover at least 30% of electricity consumption with carbon-free sources, or (iii) invest at least 50% of the aid in projects leading to substantial reductions of the installation's greenhouse gas emissions.