According to the press release published on October 10, 2022 the European Commission has approved, under EU State aid rules, two Slovak schemes with a total budget of over €1.1 billion to help companies subject to the EU Emission Trading System (‘ETS') decarbonise their production processes and improve their energy efficiency. The schemes will be made available in part through the Recovery and Resilience Facility ('RRF') and in part through the EU Modernisation Fund. The measure contributes to the achievement of the European Green Deal targets, while helping reduce dependence on imported Russian fossil fuels and fast-forward the green transition, in line with the REPowerEU Plan.
Executive Vice-President Margrethe Vestager, in charge of competition policy, said: “These €1.1 billion schemes will help Slovak industries to decarbonise their industrial processes and achieve greater energy efficiency. The measures will also help Slovakia reduce its dependence on imported fossil fuels, in line with the REPowerEU Plan, while ensuring that any potential competition distortions are kept to the minimum.”
The two schemes notified by Slovakia, with a total budget of over €1.1 billion, will be partially funded through the RRF, following the Commission's positive assessment of the Slovak Recovery and Resilience Plan and its adoption by the Council. In particular, the €357.4 million relating to the first measure will be financed by the RRF and the €750 million relating to the second measure will be covered by the EU Modernisation Fund.
The schemes aim to help certain industries to reduce carbon dioxide (CO2) emissions in their production processes as well as to implement energy efficiency measures in industrial installations. The measures supported under the schemes range from electrification projects to the installation of industrial waste heat recovery technologies.
The beneficiaries of the measures will be companies active in sectors subject to the EU ETS, which include, among others, energy-intensive industries (i.e. refineries, steel works, and companies active in the production of heavy metals, construction and chemical products).
The projects that will benefit from the aid will be selected based through an open competitive bidding process and will be ranked on the basis of two criteria:
- the lowest amount of aid requested per ton of CO2 emissions avoided, and
- the highest contribution to the achievement of the overall CO2 emission reduction objective of the schemes.
Under the measures, the aid will take the form of grants based on the bids (i.e. the aid requested per CO2 emission abated) and limited to the project's total investment costs. Projects will be selected following five tenders in total, the first of which is scheduled for 2022 and the last of which is planned for 2028.
The schemes are expected to avoid the release of 5.233 million tons of CO2 annually. This represents more than 12% of Slovakia's 2030 target (i.e. 40 million tons of CO2 equivalent reduction compared to 1990).
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