Financial support to compensate companies for indirect emissions costs (indirect carbon leakage)

Summary

The Walloon Government has decided to support the competitiveness of the supply for the industrial installations that use the most electricity. For this purpose, the “compensation for indirect costs” provision was included in the AGW of 7 June 2018, granting assistance to compensate companies for indirect emissions costs. This provision will be used to compensate for a portion of the cost of the Community carbon-quota system, which is incorporated into the price of electricity. The provision has three objectives:

- to reduce the risk of carbon leakage, through the outsourcing of industrial activities outside the European Union;

- to uphold the objective of the European carbon-quota exchange programme, in order to encourage decarbonisation by ensuring a satisfactory cost-effectiveness ratio;

- to limit disruptions to competition in the domestic market.

2019 figures

Twenty-nine companies have benefited from the provision for costs borne in 2018 and paid in 2019.

The Walloon Government has voluntarily limited the total annual aid to €7,500,000. Compensation is subject to weighting.

The following coefficients have been used to calculate the compensation amount:

- EUA future prices: €5.88/t CO2

- Aid amount: 0.8

- National CO2 emissions factor: 0.76 tCO2/MWh

The table below summarises the compensation by sector and sub-sector:

NACE rev 1.1

Sectors

Compensation

Overall total

 

€ 7.500.000,00

2112

Production of paper and cardboard

€ 584.689,74

2413

Production of other inorganic chemical products

€ 1.238.981,85

2414

Production of other basic organic chemical products

€ 537.771,54

2415

Production of nitrogen products and fertilisers

€ 391.665,05

2470

Production of artificial or synthetic fibres

€ 182.765,54

2710

Steel industry

€ 3.728.019,85

24161050

Production of high-density polyethylene (HDPE)

€ 138.802,01

24163010

Production of polyvinyl chloride (PVC)

€ 152.880,37

24165130

Production of polypropylene (PP)

€ 544.424,04

Key points

Assistance for indirect emissions costs may only be granted to a beneficiary for an installation if this beneficiary operates in one of the sectors or sub-sectors mentioned in annex II of communication 2012/C 158/04, that is, if it produces products that correspond to a PRODCOM code and have a prefix of one of the NACE Rev 1.1 (2003) codes, which are listed in annex II. (see the NACE Rev.1 and PRODCOM tabs on the application form).

In detail

Target audience – details

Any company with a production site in the Walloon region in one of the targeted sectors or sub-sectors.

Benefits

The maximum amount of assistance that is payable per installation, where the installation produces products that correspond to the sectors and sub-sectors listed in annex II of communication 2012/C 158/04, must be calculated using the following formula:

A) when the efficiency benchmarks for electricity consumption listed in annex III apply to products that are produced by the beneficiary, the maximum assistance that is payable per installation for the costs borne during year t is: Aidet = Ait x Ct x Pt-1 x E x BO
In this formula, Ait is the amount of assistance for year t, expressed as a fraction (e.g. 0.75); Ct is the applicable CO2 emissions factor (tCO2/MWh) for year t; Pt-1 is the EUA future price for year t-1 (EUR/tCO2); E is the specific efficiency benchmark for electricity consumption for the applicable product, as established in annex III; BO is the benchmark production;

b) when the efficiency benchmarks for electricity consumption listed in annex III do not apply to products that are produced by the beneficiary, the maximum assistance that is payable per installation for the costs borne during year t is: Aidet = Ait x Ct x Pt-1 x EF x BEC
In this formula, Ait is the amount of assistance for year t, expressed as a fraction (e.g. 0.75); Ct is the applicable CO2 emissions factor (tCO2/MWh) for year t; Pt-1 is the EUA future price for year t-1 (EUR/tCO2); EF is the fall-back efficiency benchmark for electricity consumption; BEC is the benchmark for electricity production.

The assistance only covers the portion of the costs related to electricity-supply contracts, which explicitly state that the costs include CO2 costs. To this end, the maximum amount is multiplied by an r factor, which, for industrial sites, is calculated as the ratio between the electricity consumption that is subject to the quota costs from the European emissions-quota exchange system and the total electricity consumption of the industrial site. The total amount of assistance per company is weighted annually by the Minister of the Economy, based on the total amount of eligible applications and the budget allocated for this aid.

Procedure

Two submissions are required, as follows:

1. A paper copy of the complete file, comprising:

  • the original copy of the signed 2019 application form (no copies or scans);
  • the original copy of the signed validation certificate from an auditor (no copies or scans);
  • “site data” annex This file must be sent by 31 March 2020 (the postmark shall attest to this) to: Service public de Wallonie Economie Direction des Programmes d'Investissement Place de la Wallonie, 1, bâtiment II 5100 JAMBES

2. An electronic copy (not signed or scanned) of the application form in Excel format, titled “CLI – FORM SPW 2019 name of your company.xlsm”, must be sent by 31 March 2020 to dpi@spw.wallonie.be. Confirmation of receipt will follow each submission. If the auditor confirms that, due to other priorities, they cannot validate the Indirect Carbon Leakage file by 31 March 2020, the applicant may submit their non-validated application electronically by 31 March and send the version validated by the auditor (electronic and paper version) by 30 April 2020.

The supporting documents that must be provided by the user are detailed in the application form and the explanatory notes.

Appeal procedures and details for the Ombudsman are always provided if the assistance is refused.

There are no costs associated with applying for the assistance.

Every effort is made to process applications within a reasonable period, which may vary depending on the potential complexity of the file and the opinions required to assess the allowance and the available budget of the assistance scheme.

If no response is received from the competent authority, you can contact the administration directly.

All applications for assistance must be completed in French.

Conditions

To receive this assistance, you must satisfy all the following criteria as a minimum:

1- confirm, by means of a sworn declaration, that the company complies with the legal provisions governing its activity and the fiscal, social and environmental regulations and legislation, or undertakes to do so by the deadlines established by the competent administration;

2- operate a site in the Walloon region;

3- provide a validation report;

4- not be subject to a recovery order, following a decision from the European Commission that declared assistance received by the company as illegal and incompatible with the internal market;

5- commit to an energy-efficiency approach, either by signing up to a sector agreement or by proving your commitment to this approach with appropriate documentation.

Forms

To download

Contacts

Updated on
Process n° : 141780
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