Aid for indirect emission costs

Some of the EU ETS allowance costs passed on in electricity prices will be compensated for a limited number of industries through the so-called aid for indirect emission costs. Rules governing the aid are laid down in the Act (138/2017) on aid for indirect emission costs due to the Emissions Trading System, which entered into force in June 2017. It is possible to grant the aid for indirect emission costs under the Emissions Trading Directive, and about 10 EU member states or EEA countries have used the aid to compensate operators for indirect emission costs.

The Finnish system for aid for indirect emission costs complies with the obligations laid down in the Commission Communication on guidelines on certain State aid measures in the context of the emissions trading system (2012/C 158/04). However, Finland has decided to grand aid for half of the maximum level allowed under the guidelines.

The amount of the aid granted will depend directly on the price of the emission allowance. It will also depend on the applicant installation's electricity consumption, which is calculated by taking into account the installation’s baseline production levels or its baseline electricity consumption levels.

The aid system is a fixed-term system tied to the current trading period. Aid can be granted based on data for 2016–2020. It is always paid retroactively the year following the relevant year. In Finland, the competent authority is the Energy Authority. It is responsible for the processing of applications, the granting of aid and other duties under the Act on aid for indirect emission costs.

Further information: juhani.tirkkonen(at)tem.fi