The Czech Republic has decided to fully compensate indirect carbon costs for 2024 for a number of energy-intensive industrial enterprises. The government's goal is to maintain the competitiveness of its industry amid high electricity tariffs.
According to GMK Center, this practice has long been in place in other European Union countries.
The EU Emissions Trading System (EU ETS) guarantees industrialists the legal right to receive state compensation. However, last month, the Czech Republic considered a possible reduction in the amount of support, as there was no certainty that the Ministry of Industry would find sufficient budget funds.
Such rumors caused discontent among business associations. The Czech Chamber of Commerce, the Review Union, and the Confederation of Industry opposed the cuts in compensation.
Carbon pressure
The high cost of carbon quotas has led to an increase in electricity tariffs in Europe. For energy-intensive industries, this could become an insurmountable obstacle. Without the support of their governments, they cannot compete in the global market, which is only intensifying due to cheaper imports from countries outside the European Union.
"The steel industry is going through an extremely difficult period, and any reduction in compensation will further worsen the economic situation of the entire industry and weaken its competitiveness," said Roman Haide, CEO of Třinecké železárny.
According to the government's decision, the total amount of compensation for the industry will exceed CZK 2 billion. Thirty-two companies will be eligible for compensation. It is hoped that these funds will at least partially reduce the burden on the industry due to energy tariffs.
It should be noted that the adoption of the joint EU ETS faced resistance from a number of countries that see Europe's ambitious climate goals as a risk to their own economies. This was reported by EcoPolitic.
