On 22 May 2012, the European Commission published its long-awaited Communication setting out guidelines on certain state aid measures in the context of the greenhouse gas emission allowance trading scheme ("ETS") post -2012.
The Communication allows national support to companies in a number of sectors to cover rising electricity costs. As a result of a change to ETS, electricity prices are expected to rise in certain sectors as from 2013 due to a passing on of the costs linked to greenhouse gas emissions. The aid measures apply to (sub)sectors that are deemed to be exposed to a significant risk of carbon leakage, a process referred to in order to cover the risk of companies being driven out of Europe by these high costs.
The sectors eligible for state aid are electro-intensive users, such as producers of steel, aluminum, copper, fertilizers, steel, paper, cotton, chemicals and some plastics. The compensation that can be granted in these sectors is measured by a maximum "aid intensity" decreasing over time. The aid intensity will amount to 85% of the eligible costs incurred in 2013 to 2015, 80% of the eligible costs in 2016 to 2018 and 75% of the eligible costs in 2019 and 2020.
Furthermore, the Communication provides that EU Member States will be eligible for aid between 2013 and 2016, consisting of up to 15 percent of the cost of building highly efficient power plants capable of safely capturing and storing carbon emissions. Investment aid can also legally be granted for all investment costs in modernising installations when EU Member States successfully apply for a delay to full emissions-permit-auctioning requirements.
The Communication also groups Denmark with other Nordic countries for the purpose of calculating regional emissions, pushing up average emissions for that group.
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