EU Extends Business Subsidies: 3-Month Extension

While France and Germany wanted an extension of the aid measures by one year until the end of 2024, the European executive decided to extend only some of them during the coming winter period.
A measure that brings a little peace of mind to businesses as winter approaches. Monday evening, the European Commission declared itself in favor of “a limited extension of three months” of certain energy subsidies, that is to say until March 31. These are emergency measures put in place in the midst of the energy crisis and which in certain cases had led to a doubling of state aid ceilings by the European executive. This decision comes in a calmer energy context than last year as evidenced by the good level of gas stocks and the low risk of shortages.

“Despite the remarkable resilience of the Union’s economy, great uncertainty remains regarding energy prices for next winter,” recalls Competition Commissioner Didier Reynders.
But not all the measures are affected by this recent decision from Brussels and some will indeed end on December 31, 2023. As Les Echos indicates, these are “measures relating to limited amounts of aid and those intended to compensate for high energy prices” which will be renewed unlike the measures “on supporting liquidity” or “those on supporting the reduction in electricity demand”. “This will allow Member States to extend their support schemes and ensure that businesses still affected by the crisis will not be deprived of the necessary support during the next winter heating period,” explains the European Commission.

Mechanisms for the deployment of renewables and decarbonization maintained until December 2025
Although this extension was desired by a majority of member states, this was not the case for Belgium, Denmark, Estonia, Finland and the Netherlands. For their part, France and Germany called for an extension of all subsidy schemes and a much longer duration, namely one year, until December 2024. As a diplomat explains European on a daily basis, “certain companies have signed three-year long contracts with high prices, and they are only half or two-thirds through” and the objective of the two countries was therefore to coincide the end of these contracts with the subsidies.

“Member States can continue to provide support by covering part of the additional energy costs only to the extent that energy prices significantly exceed pre-crisis levels,” underlines the Commission.
Finally, certain measures remain maintained until December 2025 but in another register: the deployment of renewable energies and decarbonization measures. Here too, Chancellor Olaf Scholz announced a few weeks ago his wish to see this specific aid extended until 2027.

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