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Detail – Energy Country Profile

€1.4 billion for Czech Republic

The European Commission approved a €1.4 billion scheme to partially compensate energy-intensive companies for higher electricity prices.

The European Commission has approved a Czech scheme under EU state aid rules to partially compensate energy-intensive companies for higher electricity prices caused by indirect emission costs under the EU Emissions Trading Scheme (ETS).

The scheme notified by the Czech Republic, with an estimated total budget of €1.4 billion, will cover part of the higher electricity prices resulting from the impact of carbon prices on electricity generation costs (so-called "indirect emission costs") that will be incurred between 2021 and 2030. The support measure aims to reduce the risk of "carbon leakage," where companies relocate their production to countries outside the EU with less ambitious climate policies, resulting in less economic activity in the EU and no reduction in greenhouse gas emissions globally.

Compensation will be granted to eligible companies in partial reimbursement of indirect emission costs incurred in the previous year, with the final payment in 2031. The amount of aid is calculated based on electricity consumption efficiency benchmarks, ensuring that beneficiaries are encouraged to save energy. The maximum aid amount is 75% of the indirect emission costs incurred.

The Commission assessed the measure under EU state aid rules and the ETS State Aid Guidelines.

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