The European Commission will allow the most energy-intensive industries to receive compensation to offset the costs of complying with EU emissions rules, it announced on Tuesday, in a bid to prevent companies from moving their operations outside the bloc.
Under pressure from industrial sectors and certain Member States, the European Union has, more broadly, reduced the weight of legislation aimed at combating climate change, with the aim of guaranteeing the competitiveness of European businesses.
The changes announced on Tuesday ease state aid rules, which allow countries in the bloc to compensate industries for higher energy bills due to the extra cost of generating electricity associated with carbon prices.
According to the Commission, the new guidelines should prevent so-called “carbon leakage”, a phenomenon that occurs when companies relocate production to countries outside the EU where environmental restrictions are looser or when European products are replaced by more emissions-intensive imports.
The list of sectors eligible for compensation under the European Emissions Trading System has been expanded to 20 new segments, including the manufacturing of organic chemicals and certain activities in the ceramics, glass and batteries sectors.
The Commission said the expansion was necessary because emissions costs have risen significantly in recent years, putting more sectors at risk of leaving the bloc than in the past.
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