The European Commission has approved a €405 million Greek state aid scheme aimed at reducing electricity levies for energy-intensive industries, saying the measure would help prevent companies from relocating production outside the European Union.

The scheme, approved under EU state aid rules, is intended to support companies in sectors that consume large amounts of electricity and face strong international competition, the Commission said.

EU officials said the measure seeks to reduce the risk of carbon leakage, where companies move operations to countries with less stringent climate policies, potentially leading to higher global greenhouse gas emissions.

The new program replaces a similar Greek scheme that the Commission approved in December 2018.

Under the plan, eligible companies will receive reductions of between 75 and 85% on electricity levies, depending on their exposure to international competition and energy costs. However, the levy paid by beneficiaries cannot fall below 50 cents per megawatt hour.

Companies receiving aid will also be required to meet environmental conditions. Beneficiaries must either implement recommendations from energy audits, invest at least half of the aid received in projects that significantly reduce greenhouse gas emissions, or ensure that at least 30% of their electricity consumption comes from carbon-free energy sources.

The Commission said it concluded the scheme was “necessary and appropriate” to avoid industrial relocation while remaining in line with EU climate and competition rules.

Source: Ekathimerini.com