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Green Deal

21.9.2020 – In line with the European Green Deal and the EU’s objective to become the first climate neutral economy by 2050, the Commission adopted today revised EU Emission Trading System State aid Guidelines in the context of the system for greenhouse gas emission allowance trading post-2021 (the “ETS Guidelines”). They will enter into force on 1 January 2021 with the start of the new ETS trading period, and replace the previous Guidelines adopted in 2012. EU State aid control has an important role to play in enabling Europe to fulfil its Green Deal objectives. In order to reap the full benefits of limited public funds, it is crucial that State aid rules continue to do their part. This means ensuring that public money does not crowd out private spending and maintaining a level playing field in the Single Market, while minimising costs for taxpayers.

The ETS Guidelines aim at reducing the risk of “carbon leakage”, where companies move production to countries outside the EU with less ambitious climate policies, leading to less economic activity in the EU and no reduction in greenhouse gas emissions globally. In particular, they enable Member States to compensate companies in at-risk sectors for part of the higher electricity prices resulting from the carbon price signals created by the EU ETS (so-called “indirect emission costs”). At the same time, overcompensation of companies would risk running counter to the price signals created by the EU ETS to promote a cost-effective decarbonisation of the economy and create undue distortions of competition in the Single Market. More: here

Source: EC Press

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