Facing mounting pressure from European manufacturers, the European Union is set to reverse course Wednesday on strict competition rules that prevented governments from helping energy-intensive industries with soaring electricity bills.
The about-face comes after months of lobbying from companies warning they cannot compete with US and Chinese rivals while paying premium energy costs without government support.
Just a month ago, Berlin’s proposals to subsidize power costs for heavy industry were rejected by Brussels saying it was incompatible with EU law. Now those same plans will get official European endorsement when competition chief Teresa Ribera announces the revised Clean Industrial Deal State Aid Framework.
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Under the new rules, a draft of which was seen by Politico Europe, national governments can cut wholesale electricity prices by up to half for qualifying companies, provided they make investments that “contribute to the green transition.”
The relief comes with strings attached. Companies cannot receive price cuts below 50 euros per megawatt-hour, and the discount cannot exceed half their annual power consumption. Larger aid packages exceeding 200 million euros or representing 10% of a project’s budget, meanwhile, will still require Commission approval.
The shift may be a signal that Brussels now believes Europe’s traditional ban on government subsidies is hampering industrial competitiveness.
Industry group Eurometaux recently wrote to Commission President Ursula von der Leyen warning about the metals sector’s declining competitiveness against US and Chinese rivals. A separate letter from employer organizations across 10 EU countries made similar arguments about energy-intensive industries more broadly.
Information for this story was found via Reuters, Politico Europe, and the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
