Assistance 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 is 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 internal market insofar as is possible.

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.

Conditions

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

  • 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;
  • has a site in Wallonia;
  • provide a validation report;
  • 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;
  • 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.
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 case file, comprising:

  • the original copy of the signed 2020 application form (no copies or scans);
  • the original copy of the signed validation certificate from an auditor (no copies or scans);
  • the ‘Site data’ annex.

This file must be sent by 30 June 2021 (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 2020 name of your company.xlsm’, must be sent by 30 June 2021 to dpi@spw.wallonie.

Confirmation of receipt will follow each submission.

The supporting documents to be provided by the user are mentioned on the application form and the explanatory notes (which can be downloaded in the ‘Useful documents’ section of this procedure).

Appeal procedures 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 case file, requests for additional information and, where necessary, requests for the opinions required to assess the allowance and the available budget of the assistance scheme.

You may contact the Administration directly for help with your administrative processes.

All applications for assistance must be completed in French or German.

Forms

To download

Contacts

Services

Investment programmes department
Updated on
Process n° : 141780
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