The European Commission has approved state aid for German companies worth billions. In particular, companies in the transport and heating sector that pay a CO2 price will be relieved. It’s about maintaining competitiveness.
The package is worth a total of 6.5 billion euros, the Commission announced in Brussels on Thursday. The measure is intended to support energy-intensive companies that compete internationally by offsetting them for part of the higher fuel prices resulting from the German emissions trading system.
The companies must not be disadvantaged in international competition. The scheme applies to costs incurred in the period 2021 to 2030. This should reduce the risk of carbon leakage, which would involve a relocation of production capacity to countries with less ambitious climate targets.
The amount of the reimbursement is between 65 percent and 95 percent of the costs.
Habeck sees ‘important signal’
The German Minister of Economic Affairs Robert Habeck (Greens) welcomed the aid decision. “This is an important signal from Brussels for companies facing tough international competition while investing in climate protection at the same time.” The planned support was requested in 2021 for the period up to 2030 with a total amount of 6.5 billion euros. In July, Germany received approval for billions in funding to accelerate the transition to climate-neutral economic processes
Compensation payments would be made to the eligible companies in the form of a partial reimbursement of the additional costs incurred in the previous year. In return, beneficiary companies would have to provide environmental considerations, such as investments to improve energy efficiency.
Germany increases CO2 price
Only on Wednesday did the German government agree that the CO2 price in the transport and heating sectors should rise more than previously planned in the coming year. This will be increased to 40 euros per tonne on 1 January, compared to 35 euros previously. It is currently 30 euros.
The German federal cabinet has approved the concept of the business plan for the special asset climate and transformation fund, which is fed, among other things, from revenues from national CO2 pricing in the transport and heating sector. The federal government uses the fund to invest in energy-efficient renovation of buildings and decarbonisation of industry, among other things.
Source: Krone
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