The European Commission has approved an approximately €800 million (CZK 19 billion) Czech scheme to support companies affected by increased energy costs in the context of Russia's war against Ukraine. The scheme was approved under the State aid Temporary Crisis and Transition Framework, adopted by the Commission on 9 March 2023 to support measures in sectors which are key to accelerate the green transition and reduce fuel dependencies. The new Framework amends and prolongs in part the Temporary Crisis Framework, adopted on 23 March 2022 to enable Member States to support the economy in the context of the current geopolitical crisis, already amended on 20 July 2022 and on 28 October 2022.
The Czech measure
Czechia notified to the Commission, under the Temporary Crisis and Transition Framework, an approximately €800 million (CZK 19 billion) scheme to support companies facing increased energy costs in the context of Russia's war against Ukraine.
The measure will be open to large companies in all sectors. Under the scheme, the aid will take the form of direct grants to cover the additional costs due to exceptional price increases of natural gas and electricity recorded in the eligible period, specifically from 1 January 2023 to 31 December 2023, compared to the period from 1 January 2021 to 31 December 2021.
The beneficiaries will be entitled to aid as soon as the market prices for natural gas and electricity go above the maximum prices set by the scheme (approximately €210/MWH (CZK 5,000/MWh) for natural gas and €105/MWH (CZK 2,500/MWh) for electricity). The aid amount will correspond to the difference between the maximum prices set by the scheme and the market prices during the year 2023, subject to the application of the maximum aid amounts laid down in the Temporary Crisis and Transition Framework.
The support will be channelled to eligible beneficiaries through energy suppliers, who will have to sell natural gas and electricity at the maximum price set under the scheme and will be subsequently compensated in full by Czechia.
The Commission found that the Czech scheme is in line with the conditions set out in the Temporary Crisis and Transition Framework. In particular, the overall aid per beneficiary will not exceed 50% of the eligible costs, up to a maximum of €4 million. The beneficiaries may receive further aid, not exceeding 40% of the eligible costs and up to a maximum of €100 million. Energy-intensive companies may receive aid up to 65% of the eligible costs for the maximum aid ceiling of €50 million. Furthermore, those energy-intensive companies that are active in particularly affected sectors, will be entitled to receive aid up to 80% of the eligible costs for the maximum aid ceiling of €150 million. In addition, the aid will be granted before 31 December 2023.
The Commission concluded that the Czech scheme is necessary, appropriate and proportionate to remedy a serious disturbance in the economy of a Member State, in line with Article 107(3)(b) TFEU and the conditions set out in the Temporary Crisis and Transition Framework.
On this basis, the Commission approved the aid measure under EU State aid rules.
Background
On 9 March 2023, the Commission adopted a new Temporary Crisis and Transition Framework to foster support measures in sectors which are key for the transition to a net-zero economy, in line with the Green Deal Industrial Plan. Together with the amendment to the General Block Exemption Regulation ('GBER') that the Commission endorsed on the same day, the Temporary Crisis and Transition Framework will help speeding up investment and financing for clean tech production in Europe. It will also assist Member States in delivering on specific projects under National Recovery and Resilience Plans which fall within their scope.
The new Framework amends and prolongs in part the Temporary Crisis Framework, adopted on 23 March 2022, to enable Member States to use the flexibility foreseen under State aid rules to support the economy in the context of Russia's war against Ukraine. The Temporary Crisis Framework has been amended on 20 July 2022, to complement the Safe gas for a Safe Winter Package and in line with the REPowerEU Plan objectives. The Temporary Crisis Framework has been further amended on 28 October 2022 in line with the Regulation on an emergency intervention to address high energy prices and the Regulation enhancing solidarity through better coordination of gas purchases, reliable price benchmarks and exchanges of gas across borders.
The Temporary Crisis and Transition Framework provides for the following types of aid, which can be granted by Member States:
- Limited amounts of aid, in any form, for companies affected by the current crisis or by the subsequent sanctions and countersanctions up to the increased amount of €250,000 and €300,000 in the agriculture, and fisheries and aquaculture sectors respectively, and up to €2 million in all other sectors;
- Liquidity support in form of State guarantees and subsidised loans. In exceptional cases and subject to strict safeguards, Member States may provide to energy utilities for their trading activities public guarantees exceeding 90% coverage, where they are provided as unfunded financial collateral to central counterparties or clearing members.
