According to a press release by the Commission, the European Commission (EC) has approved a scheme worth €800 million ($937 million) to support Czech Republic businesses facing increased energy costs due to the Russian-Ukrainian conflict. Large companies across all sectors will be eligible for direct grants to cover additional costs caused by the extraordinary rise in natural gas and electricity prices from January 1, 2023, to December 31, 2023, compared to the same period in 2021.
The commission concluded that the Czech support scheme is “necessary, appropriate and proportionate” to remedy the economic disturbance of the member state. The support will be provided until December 31, 2023.
Recipients will be entitled to support as soon as market prices for natural gas and electricity exceed the maximum prices set in the scheme, approximately €210/MWh ($9.71/MMBtu) for natural gas and €105/MWh ($48.70/MWh) for electricity. The level of support will correspond to the difference between the capped prices set in the scheme and market prices in 2023.
Eligible recipients will receive support through energy suppliers, who will have to sell natural gas and electricity at the maximum price set in the scheme. However, the government will fully compensate them for this.
Importance of Supporting Businesses with Higher Energy Costs
Supporting businesses with higher energy costs is critical to ensure they can continue operating and driving economic growth in the Czech Republic. As energy prices continue to rise due to geopolitical tensions and other factors, businesses face a significant financial burden that can disrupt their operations and put them at a competitive disadvantage.
The EU’s support of €800 million will help alleviate this burden and enable businesses to continue to operate and invest in their growth. This scheme’s direct grants will help companies cover the additional energy costs and remain competitive in a challenging economic environment.
This support is critical in the current Russian-Ukrainian conflict, which has led to a significant increase in energy costs across Europe. By providing this support, the EU demonstrates its commitment to supporting businesses and promoting economic growth in the Czech Republic and across the continent.