methods to help companies that consume the most gas and electricity

Since the announcement of the measure during the presentation of the resilience plan by the government on March 16, the European Commission has published the rules governing aid to cover the energy costs of companies that consume large amounts of gas and electricity. A framework that leaves the field open to French aid that is ultimately more generous and broader than expected. Among the novelties: compliance with the eligibility criteria is checked quarterly (there is no need to wait for the results to close) and the maximum aid ceiling can reach €50 million (instead of the €25 million announced) for the most exposed sectors to international competition.

According to Bercy, market prices for gas and electricity reached respectively €224.6/MWh and €540/MWh on March 7, 2022 due to the war in Ukraine. Gas and electricity prices stood at €46/MWh and €109/MWh respectively in 2021.

Three possible situations

The companies eligible for this aid are those that:

  • have gas and electricity purchases that reach at least 3% of its turnover in 2021;
  • suffer operational losses since the beginning of the war in Ukraine (since 1er February 2022 according to the European framework);
  • experience a doubling of their unit cost of purchasing electricity or gas (in €/MWh).

The aid offsets part of the additional costs of gas or electricity expenses in relation to 2021. Its amount differs depending on the reduction in EBITDA observed compared to 2021. Three possible situations:

  • one aid equivalent to 30% of eligible costs up to a limit of €2 millionfor companies with a 30% drop in gross operating surplus (EBITDA) compared to 2021;
  • one aid equivalent to 50% of eligible costs up to €25 millionfor companies whose EBITDA is negative and whose amount of losses is, at most, equal to twice the eligible costs (aid is limited to 80% of the amount of losses);
  • one aid equivalent to 70% of eligible costs up to €50 millionfor companies whose EBITDA is negative and whose amount of losses is at most equal to twice the eligible costs (aid is limited to 80% of the amount of losses) operating in one of the sectors most exposed to international competition (see list at the end of the article).

“Compliance with the eligibility criteria relating to electricity and gas expenses, EBITDA and eligible costs will be verified and calculated quarterly by a trusted third party (accountant or auditor)”, says the government in its press release.

It should be noted that the amount of aid ceilings will be assessed at group level for companies that are part of a group.

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Eligible costs

The temporary European framework specifies the nature of the costs eligible for aid. “Eligible cost is the product of the number of units of natural gas and electricity purchased by the company from external suppliers as the final consumer during a period between 1 February 2022 and 31 December 2022 at the latest […] and a certain increase in the price paid by the company per unit consumed (measured, for example, in EUR/MWh)”, indicates the European Commission.

“This price margin is calculated as the difference between the unit price paid by the company during a given month during the qualification period and twice (200%) the unit price paid by the company on average for the reference period between 1 January , 2021 and December 31, 2021, it continues. The company is eligible if it incurs operating losses characterized by an increase in the eligible cost that corresponds to at least 50% of the operating losses”.

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Way to go

Eligible companies will be able to apply for the aid by the professional space of the tax website in mid-June for the March-April-May quarter. “An application for the second eligible period June-July-August will be opened at a later date”, indicates the government.

According to the European Temporary Framework, aid can be granted until 31 December 2022.

Sectors most exposed to international competition

The European Commission has listed sectors eligible for aid equal to 70% of eligible costs capped at €50 million in its temporary crisis framework for state aid measures aimed at supporting the economy after the crisis. aggression against Ukraine published March 23:

  • Aluminum production;
  • Manufacture of other basic inorganic chemicals;
  • Lead, zinc or tin metallurgy;
  • Manufacture of paper pulp;
  • Mining of other non-ferrous metal ores;
  • Manufacture of paper and cardboard;
  • steel industry;
  • Manufacture of synthetic rubber;
  • Cast iron casting;
  • Manufacture of artificial or synthetic fibers;
  • Manufacture of refined petroleum products;
  • Copper production;
  • Manufacture of basic plastic materials;
  • Preparation of textile fibers and spinning;
  • Metallurgy of other non-ferrous metals;
  • Manufacture of ceramic tiles;
  • Manufacture of non-woven fabrics, except clothing;
  • Fiberglass manufacturing;
  • Manufacture of nitrogen products and fertilizers;
  • Manufacture of veneers and wood panels;
  • Flat glass manufacturing;
  • Manufacture of hollow glass;
  • Certain subsectors of the industrial gases sector (Hydrogen, Oxygenated inorganic compounds of non-metallic elements);
  • Certain subsectors within the other basic organic chemicals manufacturing sector (Cyclohexane, Benzene, Toluene, o-xylene, p-xylene, M-xylene and mixed isomers of xylene, styrene, ethylbenzene, cumene, other cyclic hydrocarbons, ethylene glycol (ethanediol ), 2,2-oxydiethanol (diethylene glycol – digol), Oxiranne (ethylene oxide), Benzols (benzene), toluols (toluene) and xylenes (xylenes), Naphthalene and other mixtures of aromatic hydrocarbons excluding benzene, toluene and xylenes);
  • Slag, slag, rocks and similar wool, whether or not mixed together, in masses, sheets or rolls.

Also read Transport companies: implementation of fixed aids per vehicle

Matthew Barry

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