Government Allocates 3.5 Billion CZK to Aid Energy-Intensive Companies

The Czech government has announced that they will allocate 3.5 billion CZK to help energy-intensive companies affected by rising energy prices in the coming year. Prime Minister Petr Fiala announced at a press conference that The aid will target companies operating at high and very high voltage levels by reducing payments for renewable energy sources by an average of two-thirds.

“We are not subsidizing across the board. Broad-based subsidies are no longer needed, but we are helping those with a problem with the increase and where there could be a threat to operation. The aid also concerns companies operating in glassmaking, ironworks, food companies, and so on,” Fiala said at the press conference.

According to the Minister of Industry and Trade, Jozef Síkela, the aid is intended for approximately 25,000 pick-up points. Government aid will reduce the contribution to payments for renewable sources for entities connected at the high voltage level by 107 CZK for consumed MWh, excluding VAT. Entities connected at very high voltage will see a reduction of 167 CZK. The aid will be subtracted according to the reserved capacity.

The government decided to lend a helping hand to energy-intensive companies after the Energy Regulatory Office agreed that the regulated part of electricity at the high voltage level would increase by 105.5% year-on-year next year and at very high voltage by 190.9%.

Industry representatives and entrepreneurs were calling for help from the state, fearing a tripling of energy costs for some companies and a weakening of the competitiveness of domestic industry. “We entered the negotiations with the understanding of the state of public budgets. Therefore, we initially assumed that the fees would return to the 2021 level. Unfortunately, that did not work, but I appreciate the decision that the government will do everything to make the burden on companies not as high as announced by the ERÚ,” added Jan Rafaj, President of the Union of Industry and Transport, at the press conference.

The government will draw the money to help companies from next year’s budget from the chapter of the Ministry of Industry and Trade (MIT) or unused cash from this year’s budget. The government will use measures to aid companies it pushed through in the consolidation package. This newly allows state aid with payments for supported energy sources at any time during the year and also allows this aid to target only certain voltage levels, for example, as in this case, companies,” Síkela described.