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EU approves €1.2bn temporary energy scheme for firms

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European Competition Commissioner Margrethe Vestager

European Competition Commissioner Margrethe Vestager

European Competition Commissioner Margrethe Vestager

The EU has cleared the Government’s €1.2bn temporary energy support scheme for firms, opening the door for December payments.

Finance Minister Pachal Donohoe had pledged to open applications for the scheme this month and have money in businesses’ accounts before Christmas.

The European Commission said in a statement that the subsidy scheme, which was announced in the budget, was “necessary, appropriate and proportionate to remedy a serious disturbance in the economy”.

The scheme can go ahead, the Commission said, provided it ends by March next year, although it said in a statement it “may be extended until 30 April 2023 at the latest”.

“This €1.22bn scheme approved today will enable Ireland to support affected sectors and companies, in particular the smaller ones, by ensuring that sufficient liquidity remains available to them,” said Commission vice-president and competition chief Margrethe Vestager.

The Commission loosened its state aid rules temporarily to allow governments to help firms facing soaring energy costs as a result of Russia’s war in Ukraine.

Firms are eligible for the scheme if they have seen a 50pc (or higher) hike in average unit costs for electricity or gas between September and December this year, compared to the same period in 2021.

However, retailers’ group RGDATA has called for the scheme to be backdated to March 2022, telling an Oireachtas Committee last week that 1,000 shops face closure, with the loss of 30,000 jobs, if costs continue to grow.

Handouts under the scheme will cover 40pc of the cost hikes, but will be capped at €10,000 per firm per month. Separate firms or premises owned by the same company can make separate claims.

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