Energy-intensive industries to get electrification aid

The government on Friday issued a decree on the electrification aid for energy-intensive industries, said the Ministry of Economic Affairs and Employment in a press release.

The decree complements the act that entered into force on 1 July 2022.

Electrification aid can be granted to energy-intensive industries, i.e. industries that use a large amount of energy, in 2022–2026.

The practices related to the electrification aid are defined in the government decree. Companies operating in the sectors entitled to the aid must apply for the 2022 aid by the end of September.

The aid will compensate certain energy-intensive industries for indirect costs caused by emissions trading that affect the price of electricity.

The objective is to safeguard the cost competitiveness of industry and prevent the risk of carbon leakage.

The aid targets costs that non-EU competitors of companies operating in the international market do not have.

It is estimated that there are just over 30 companies and about 70 plants entitled to the electrification aid in Finland.

The decree now issued defines the way the companies can apply for the aid, how the amount of aid is calculated and how its use is monitored.

The decree also lays down the terms of development measures to promote carbon neutrality. The decree will enter into force on 11 July.

In the supplementary budget for 2022, a total of EUR 87 million was granted for the electrification aid. An annual amount of EUR 150 million has been reserved for 2023–2026.

The European Commission must approve Finland’s notification of the aid scheme in accordance with the law and decree on electrification aid before the aid scheme can be implemented.

The companies must submit to the Energy Authority a plan on using the aid and information about development measures promoting carbon neutrality by the end of the year following the year of granting the aid.

Acceptable costs of the development measures include, for example, investments, research and development measures, and the procurement of renewable energy. The company must provide a breakdown of the costs of development measures for accounting purposes in order to enable monitoring of the aid.