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European Commission Approves €2.5 Billion Scheme to Help Czech Companies Decarbonize and Increase Energy Efficiency

Strategic Insights

— 1 min read

The European Commission has approved a €2.5 billion (€60 billion CZK) scheme to support companies in the Czech Republic in decarbonizing their production processes and improving energy efficiency. The scheme, which is fully funded through the EU Modernisation Fund, aims to help companies reduce greenhouse gas emissions by at least 40% and energy consumption by at least 20% compared to today. The scheme is open to companies in energy-intensive industries, including refineries and those producing heavy metals, construction materials, and chemical products.

Key Takeaways:

  • The scheme will provide direct grants to companies active in sectors subject to the EU ETS, with a maximum aid amount of €200 million or 10% of the total budget of the scheme, except for projects concerning refining activities and manufacturing of basic metals.
  • Companies will need to either electrify their production processes or switch from fossil fuels to renewable hydrogen or renewable hydrogen-derived fuels to be eligible for the scheme.
  • The scheme has strict safeguards to limit undue distortions of competition, including a claw-back mechanism for projects generating extra net revenues or reducing costs.
  • Beneficiaries will not be able to increase their production capacity beyond 2%.
  • The Commission found that the scheme is necessary, appropriate, and proportionate to accelerate the green transition and facilitate the development of certain economic activities.
  • The scheme is one of the first measures to be approved under the Temporary Crisis and Transition Framework, which aims to support measures in industrial sectors key to the acceleration of the green transition and reduction of fossil fuel dependencies.

Statistics:

  • €2.5 billion (€60 billion CZK) scheme to support companies in the Czech Republic
  • 40% reduction in greenhouse gas emissions
  • 20% reduction in energy consumption
  • 10% maximum aid amount per beneficiary

Sources:

  • European Commission press release IP/23/4788
  • European Commission decision SA.109055 in the State aid register
  • Temporary Crisis and Transition Framework
  • REPowerEU Plan
  • Green Deal Industrial Plan
  • European Commission press release on Temporary Crisis and Transition Framework (IP/23/4753)

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