ETS under pressure: Austria and Spain get the green light for compensations to energy‑intensive companies

The European Commission has approved two national state‑support programmes in Austria and Spain that are intended to compensate energy‑intensive firms for higher electricity prices caused by the carbon price in the ETS. The aim is to prevent the relocation of production to countries outside the EU with a milder climate policy (so‑called carbon leakage).

Austria – up to €900 million:

- reimbursement of up to 75 % of ETS‑based emission costs from the previous year

- target sectors: iron and steel, aluminium and other metals, paper, chemicals

A condition is that at least 80 % of the grant must be reinvested by firms into energy efficiency or decarbonisation measures.

Spain – expansion of the existing programme:

- maximum support increased from 75 % to 80 % of indirect emission costs

- extension to new sectors threatened by relocation

The European energy-intensive industry is battling high energy prices and several member states are calling for a review of the entire ETS. The von der Leyen Commission promised short‑term measures in March, and a comprehensive ETS review is scheduled for July 2026.

European climate policy faces the classic dilemma – strict regulation at home versus competitiveness. The smart condition is 80 % back into decarbonisation in the Austrian programme – it is therefore not a passive subsidy, but a redirection of ETS revenues back into the transformation. The question is how rigorously this will be enforced.

The Czech Republic is among the EU’s most energy‑intensive economies, and we also struggle with a “poor” energy mix that has one of the lowest shares of renewables. A similar compensation programme has existed in the Czech Republic since 2020 (run by the Ministry of the Environment), but it is worth watching whether its generosity or scope will increase after the ETS review in July.

Source: https://www.esgtoday.com/eu-approves-state-plans-to-compensate-companies-for-ets-carbon-pricing-costs-to-prevent-relocation/