CO2 Compensation for Energy-Intensive Industry: Aid Rises to 80% from 2026

Key data

Industries with high electricity consumption that compete in global markets can recover a larger portion of the costs that the emissions system (EU ETS) indirectly passes on to them through electricity prices. The Order PJC/678/2026, published on 7 July 2026 and effective from 1 January 2026, amends annexes I, II and III of the Royal Decree 309/2022 to adapt the mechanism for compensating indirect CO2 costs to new European guidelines.

The sustained rise in electricity prices has aggravated the risk that these industries will relocate their production outside the EU—what is known as "carbon leakage"—and this regulation responds precisely to that problem.

What does this regulation establish?

Order PJC/678/2026 introduces four specific changes to Royal Decree 309/2022:

The logic of the mechanism is straightforward: when an energy-intensive company buys electricity, it implicitly pays the cost of CO2 that the generator had to assume in the emissions market. This makes its production more expensive compared to competitors outside the EU who do not have this cost. The compensation covers part of this additional cost to level the playing field.

Economic and operational impact

The increase of 5 percentage points in maximum aid intensity—from 75% to 80%—is not symbolic. For industries with electricity consumption of tens or hundreds of gigawatt-hours annually, this differential can translate into hundreds of thousands or millions of euros in additional recoverable compensation.

Furthermore, the expansion of the list of eligible sectors opens the door to companies that were previously excluded from the mechanism. If your industrial sector was not included in RD 309/2022 but has a high electricity consumption profile and competes with non-EU producers, it is worth checking whether it has been incorporated in the new Annex I.

The update of CO2 emission factors for the periods 2021-2025 and 2026-2030 directly affects the calculation of aid: a higher emission factor implies greater compensation per MWh consumed. Companies must recalculate their aid estimates with the new factors.

Regarding energy efficiency improvement obligations, the regulation clarifies their scope, which reduces uncertainty about what investments or measures are required to maintain the right to compensation.

Point of attention for new entrants: if your company entered the EU ETS during the 2021-2025 period and received free emission allowances for indirect emissions, it is excluded from this compensation for that period. The regulation expressly closes the possibility of being paid twice for the same concept.

Who does it affect?

• Chemical sector: companies with high electricity intensity processes (electrolysis, synthesis, etc.).
• Aluminium: primary and secondary production with very high electricity consumption.
• Steel: steel plants, especially those operating with electric arc furnaces.
• Other industrial sectors included in Annex I of the modified RD 309/2022, which is now expanded with new subsectors exposed to significant carbon leakage risk.
• New EU ETS entrants 2021-2025 who received free allowances for indirect emissions: affected by the exclusion, cannot accumulate both compensations.
• CFOs and energy managers of large industrial consumers who manage compensation applications to the Ministry.

Practical example

Imagine a primary aluminium production plant that consumes 500 GWh/year of electricity and was already eligible under RD 309/2022.

Under the previous regulation, the maximum aid intensity applicable was 75% of the compensation amount calculated according to emission factors and the reference price of CO2. With Order PJC/678/2026, that intensity rises to 80%.

This increase of 5 percentage points means that if the base compensation calculation amounted to, for example, 10 million euros, the company could receive up to 8 million euros instead of the previous 7.5 million: an additional 500,000 euros for the same consumption and the same CO2 price, solely due to the improvement in aid intensity.

Additionally, if the new emission factors for 2026-2030 are higher than the previous ones, the base compensation amount would also increase, multiplying the positive effect on the final aid received.

What should companies do now?

1. Verify if your sector is in the new Annex I: the list of eligible sectors has been expanded. If your company was not requesting compensation before, check if it is now included.
2. Recalculate aid with the new emission factors: the factors for 2021-2025 and 2026-2030 have been updated. Update your compensation estimates with the current values.
3. Apply the new 80% intensity if your sector was eligible from 2020: review pending or future applications to reflect the new cap.
4. Check if the double compensation exclusion applies: if your company entered the EU ETS between 2021 and 2025 and received free allowances for indirect emissions, you cannot also request compensation for indirect costs for that period.
5. Review energy efficiency improvement obligations: the regulation clarifies their scope. Ensure that the measures you have implemented or planned comply with what is required to maintain the right to aid.
6. Coordinate with your energy or legal advisor: given that entry into force is retroactive to 1 January 2026, there may be adjustments to applications already submitted or amounts already calculated.

Official source

View complete regulation in official source (BOE-A-2026-14655)

Disclaimer: This article is for informational purposes only and does not constitute legal advice. For specific decisions, consult a qualified professional. Source: https://www.boe.es/diario_boe/txt.php?id=BOE-A-2026-14655