Commission amends EU ETS State aid Guidelines to address increased carbon leakage risks
The European Commission has adopted an amendment to its Emissions Trading Scheme (ETS) State aid Guidelines to address the increased carbon leakage risk faced by additional energy-intensive industries due to higher EU ETS costs. Key changes include: (1) extending the list of industrial sectors eligible for compensation to include 20 new sectors and two new subsectors; (2) increasing the aid intensity from 75% to 80% for sectors already eligible before the amendment to account for their higher carbon leakage risk; (3) allowing Member States to notify sectors or subsectors not on the amended list if they can demonstrate a genuine risk of carbon leakage and (4) requiring large beneficiaries to contribute to the green transition, including investing a portion of the aid in projects that reduce electricity system costs. Additionally, CO₂ emission factors and geographic areas have been updated for 2026–30. The amendment allows Member States to apply a gradual transition from 2026 to 2030, where the decrease in the applicable maximum regional CO₂ emission factor compared with 2021–25 is particularly large.