Spanish Government Expands CO2 Compensation to New Strategic Sectors with €600 Million

en.Wedoany.com Reported - The Spanish government on Tuesday published an amendment to Royal Decree 309/2022 in the Official State Gazette (BOE), extending national aid under the CO2 emissions trading system to strategic industrial sectors such as basic organic chemicals, fertilizers, primary plastics, man-made and synthetic fibers, batteries, flat glass, and ceramic tiles, in order to enhance their capacity to address carbon leakage risks and improve international competitiveness.

This reform incorporates the manufacturing of basic organic chemicals, fertilizers and nitrogen compounds, primary plastics, man-made and synthetic fibers, batteries and accumulators, flat glass and hollow glass, as well as the production of ceramic tiles and bricks into the aid system. Additionally, activities in sectors such as textiles, wood, and metal mining will also benefit from this expansion.

For companies already included in the scheme, the maximum aid intensity has been increased from 75% to 80% of indirect CO2 costs. Newly included sectors can receive compensation of up to 75%. The Ministry of Industry is expected to publish the relevant call for applications for this year in the coming weeks.

The government has incorporated this decision into its strategy to support electricity-intensive industries. The 2025 call for applications allocates €600 million to compensate for indirect CO2 costs, double the amount of the previous round. The government stated that since 2019, nearly €2 billion in direct aid has been provided to such industries through various support instruments.

This compensation mechanism aims to mitigate the impact of CO2-related costs on electricity prices for energy-intensive industries, thereby maintaining business competitiveness, preserving industrial employment, and preventing the relocation of production to countries with lower environmental requirements. The government believes that expanding the aid system will enable more companies to address the energy transition and international competition under more favorable conditions, while promoting the transformation and decarbonization of Spain's industrial system.