The European Commission adopted new rules to ensure that national support measures are designed to preserve the EU objective of decarbonising. In particular, under the new framework Member states may compensate electro-intensive users for part of the higher electricity costs expected to result from a change to the EU Emissions Trading Scheme (ETS) as from 2013.

A new framework has been adopted by the European Commission with the aim at compensating electro-intensive users for part of the higher electricity costs expected to result from a change to the EU Emissions Trading Scheme (ETS) as from 2013. The sectors deemed eligible for compensation include producers of aluminium, copper, fertilisers, steel, paper, cotton, chemicals and some plastics. In March 2012, MEPs adopted a resolution which called to increase the CO2 emissions reduction for 2050.

The rules allow subsidies of up to 85% of the increase faced by the most efficient companies in each sector from 2013 to 2015, a cap that will gradually fall to 75% in 2019-2020. The construction of new highly efficient power plants which will implement an environmentally safe capture and geological storage of CO2 (CCS-ready) by 2020 may receive support of up to 15% of the investment costs.

According to the Commission, the new rules aim to mitigate the impact of indirect CO2 costs for the most vulnerable industries, thereby preventing carbon leakage which would undermine the effectiveness of the EU ETS. At the same time, the rules have been designed to preserve the price signals created by the EU ETS in order to promote a cost-effective decarbonisation of the economy. Moreover, the Commission stressed that they are designed to minimise competition distortions in the internal market by avoiding subsidy races within the EU at a time of economic uncertainty and budgetary discipline.