European Commission 21 September 2020, COMMISSION STAFF WORKING DOCUMENT IMPACT ASSESSMENT Accompanying the document COMMUNICATION FROM THE COMMISSION on Guidelines on certain State aid measures in the context of the system for greenhouse gas emission allowance trading post 2021

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This Staff Working Document constitutes an impact assessment accompanying the revision of the EU Guidelines on State aid for indirect costs under the Greenhouse Gas Emission Trading System (EU ETS) for Phase IV (2021–2030), grounded in Article 107(3)(c) TFEU and Article 10a(6) of Directive 2003/87/EC as amended by Directive (EU) 2018/410. The document evaluates policy options across four dimensions—sector eligibility, estimation of indirect ETS costs (CO₂ emission factors and output data), maximum aid intensity, and conditionality—assessing their impacts on carbon leakage risk, competition distortions, and decarbonisation incentives. The preferred option combines eligibility Option A4 (sectors with an Indirect Carbon Leakage Indicator above 0.2 meeting minimum trade and emission intensity thresholds, plus subsectors with high fuel-to-electricity substitutability), an updated approach using revised regional CO₂ factors and actual output data, a flexible aid package of 75% intensity with a GVA cap and mid-term benchmark update, and intermediate conditionality requiring implementation of energy audit recommendations.AI