EU Amends State Aid Guidelines

EU Amends State Aid Guidelines, 20 New Industries Including Battery Manufacturing Receive Indirect Carbon Cost Compensation, Energy Storage Included in Investment Options

 

The European Commission has revised the state aid guidelines within the EU Emissions Trading System, adding 20 new sectors and increasing the intensity of aid. This revision includes battery manufacturing and energy storage in the scope of industries eligible for indirect cost compensation, aiming to address carbon leakage risks and enhance the competitiveness of EU industries.

 

 

According to the new rules, newly added sectors such as battery and accumulator manufacturing will be eligible for compensation equivalent to 75% of their indirect costs starting in 2025, while the aid intensity for existing eligible sectors will be increased to 80%. Member states can also apply for compensation for sectors or sub-sectors not on the list but that can demonstrate a real risk of carbon leakage.

 

The guidelines require large beneficiary companies to invest at least 50% of the aid funds in green transition projects, including on-site renewable energy power plants, energy storage facilities, electrolyzers, and advanced energy efficiency measures. This revision will apply from December 22, 2025, and member states must amend their existing aid schemes by June 30, 2026.