The European Commission has approved a €300 million State aid scheme proposed by Ireland to provide temporary electricity price relief for energy-intensive companies. The measure is designed to help industries facing high electricity costs while supporting the European Union’s broader transition to a net-zero economy. The scheme has been approved under the Clean Industrial Deal State Aid Framework (CISAF), which was adopted by the European Commission on June 25, 2025.
The financial support aims to reduce electricity costs for companies operating in energy-intensive sectors that are particularly vulnerable to international competition. These industries face a higher risk of relocating production outside the European Union to countries with weaker environmental regulations or lower energy costs. By providing temporary financial relief, the Commission aims to help maintain the competitiveness of these businesses while encouraging investment in cleaner technologies.
Under the approved scheme, eligible companies will receive direct grants to offset part of their electricity expenses. The support will cover electricity costs for a maximum period of three years. The grants will either be paid during the year in which the eligible electricity costs are incurred or in the following year.
Only companies operating in sectors identified as having a significant risk of carbon leakage will qualify for the scheme. These sectors are listed in the European Commission’s 2022 Guidelines on State Aid for Climate, Environmental Protection and Energy. The eligibility is determined based on the electricity intensity of the sector and its exposure to international trade.
The Commission stated that the Irish scheme fully complies with the conditions laid down in the Clean Industrial Deal State Aid Framework. One of the important conditions is that the reduced electricity price available to beneficiaries must remain at or above €50 per megawatt-hour. In addition, the duration of support is limited to three years, ensuring that the measure remains temporary while the EU continues to expand clean and affordable electricity generation.
A key feature of the scheme is the requirement that companies reinvest at least 50% of the aid they receive into projects that support decarbonisation. These investments must focus on new or upgraded assets that help reduce electricity system costs and improve overall system efficiency without increasing the use of fossil fuels. This condition is intended to ensure that public funding not only provides short-term financial relief but also contributes to long-term industrial transformation and lower emissions.
The Irish State aid scheme will run from July 4, 2025, until December 31, 2029. Although the scheme remains available during this period, individual beneficiaries can receive support for eligible electricity costs for a maximum of three years.
The European Commission concluded that the measure is necessary, appropriate, and proportionate to support economic activities that are important for achieving the objectives of the Clean Industrial Deal. It also found that the scheme complies with Article 107(3)(c) of the Treaty on the Functioning of the European Union, which allows State aid to facilitate the development of certain economic activities under specific conditions.
The Clean Industrial Deal State Aid Framework, introduced in June 2025, provides Member States with greater flexibility to support investments in renewable energy, energy storage, industrial decarbonisation, clean technology manufacturing, hydrogen production, circular economy projects, and energy infrastructure. It also allows temporary electricity price relief for energy-intensive industries to help them remain competitive during the transition to a cleaner and more affordable energy system across the European Union.
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