ClientEarth's response to the consultation on the draft ETS State aid guidelines

The European Commission is revising the ETS State aid guidelines for the fourth trading period 2021-2030. These guidelines frame how Member States can compensate electro-intensive industries from indirect emission costs i.e. the increase of their electricity prices due to the passing on of ETS costs by electricity suppliers. They also provide guidance for the assessment of free allocations under Article 10(c) of the ETS Directive. While the limitation of sectors eligible for compensation for indirect costs and the new conditionality clause, which obliges them to invest in energy efficiency and renewables are welcome, the guidelines are based on the assumption that there is a risk of carbon leakage that is still not strongly evidenced.