Key data
| Regulation | Decision of the EFTA Surveillance Authority of 4 March 2026 amending the Guidelines on State aid in the context of the greenhouse gas emissions trading scheme after 2021 |
|---|---|
| Reference | OJ:L_202601374 [2026/1374] |
| Publication | 18 June 2026 |
| Entry into force | 4 March 2026 |
| Affected parties | Energy-intensive industries with operations in the European Economic Area (EEA): Norway, Iceland and Liechtenstein |
| Category | European Regulation |
| Year | 2026 |
Energy-intensive industries operating in Norway, Iceland or Liechtenstein—or with exposure to the EEA market—face a change in the rules for accessing indirect CO2 cost compensation. The Decision of the EFTA Surveillance Authority of 4 March 2026 (reference OJ:L_202601374) amends the Guidelines on State aid linked to the emissions trading scheme (ETS) in force since 2021.
The change is significant: it directly affects which companies can receive aid, how much they can receive and how it is calculated. And although the decision is formally applicable to the three EEA States not belonging to the EU, it establishes a framework parallel to the European one with implications for any business group with a presence in those territories.
What does this regulation establish?
The emissions trading scheme (ETS) imposes a cost on CO2 emissions. For industries that consume large quantities of electricity, this cost is passed on indirectly through the price of energy: electricity generators pass on the CO2 price in the tariff. This puts European energy-intensive industries at a competitive disadvantage compared to competitors from countries without equivalent climate restrictions.
To prevent carbon leakage—the relocation of production to third countries with less stringent environmental requirements—EEA States may grant compensation to these industries. The EFTA Guidelines establish the conditions under which such compensation is compatible with State aid rules.
The amendment approved in March 2026 updates three key elements of those Guidelines:
| Element modified | Description of change |
|---|---|
| Eligibility criteria | The conditions that a company or installation must meet to access indirect CO2 cost compensation are adjusted |
| Beneficiary sectors | The list of sectors that can receive aid is reviewed, determining which industries are considered at risk of carbon leakage |
| Calculation methods | The formulas and parameters for determining the maximum amount of aid allowed per installation or company are updated |
This decision closely follows the framework that the European Union applies to its own Member States, ensuring regulatory consistency across the EEA.
Economic and operational impact
Compensation for indirect CO2 costs can represent a significant part of the bottom line of an energy-intensive industry. Sectors such as aluminium production, steel, chlorine, paper or basic chemicals depend on these aid to maintain their competitiveness against producers outside the EEA.
Changes in eligibility criteria mean that some companies currently receiving compensation could cease to meet the requirements. Conversely, other installations that were previously excluded could now access aid if the new criteria expand the scope of beneficiary sectors.
The operational impact is concentrated in three areas:
- Eligibility review: companies must verify whether their sector and installation remain within the scope of permitted aid.
- Recalculation of amounts: the new calculation methods may increase or decrease the compensation amount to which each company is entitled.
- Adaptation of application procedures: the States (Norway, Iceland, Liechtenstein) must adapt their national aid schemes to the new Guidelines, which may affect timelines and documentary requirements for companies.
Who does it affect?
- Energy-intensive industries with installations in Norway, Iceland or Liechtenstein that currently receive or apply for indirect CO2 cost compensation under the ETS.
- European business groups with subsidiaries or production plants in the three EEA States, especially in sectors such as metallurgy, chemicals, paper, glass or industrial gas production.
- Compliance and sustainability departments of companies with exposure to the EEA market, which must align their State aid analyses with the new framework.
- Advisors and consultants specializing in State aid, energy regulation or climate policy working with clients in the EEA area.
- National administrations of Norway, Iceland and Liechtenstein, which must review and adapt their national compensation schemes to the new Guidelines.
Practical example
An aluminium production company with installations in Norway currently receives annual compensation for indirect CO2 costs included in its electricity bill. This compensation is calculated based on electricity consumption, the emission factor of the electricity market and the CO2 price in the ETS.
With the amendment to the Guidelines, the company must check three things before submitting its next compensation application:
- Whether the aluminium production sector continues to appear on the revised list of beneficiary sectors.
- Whether the new calculation methods modify the amount to which it is entitled, either due to changes in reference parameters or applicable correction factors.
- Whether the Norwegian national compensation scheme has already been adapted to the new EFTA Guidelines, or whether there is a transitional period during which the previous rules apply.
Failing to act in time could mean receiving lower compensation than entitled to—or, in the worst case, having received aid that no longer meets the new criteria and being exposed to a recovery claim.
What should companies do now?
- Review sector eligibility: verify whether the sector of activity of the installation continues to be included in the revised list of beneficiary sectors of the new EFTA Guidelines.
- Recalculate compensation amounts: apply the new calculation methods to estimate the amount to which the company would be entitled under the new framework and compare it with what has been received so far.
- Contact the competent national authority: consult with the responsible body in Norway, Iceland or Liechtenstein to learn about the status of adaptation of the national scheme to the new Guidelines and applicable timelines.
- Review pending applications: if there are compensation applications submitted or in preparation, verify that they comply with the new criteria and not the previous ones.
- Document the eligibility analysis: maintain an updated record of the analysis performed, especially if the company operates in multiple EEA territories, to facilitate future audits or reviews.
- Alert the sustainability and finance team: changes in compensation amounts may affect financial planning and decarbonization commitments, so both departments must be aligned.
Frequently asked questions
What is indirect CO2 cost compensation and who can request it?
These are State aid that EEA countries (Norway, Iceland, Liechtenstein) can grant to energy-intensive industries to compensate for the additional electricity cost resulting from the ETS scheme. CO2 increases electricity generation costs, and that cost is passed on to industrial tariffs. The EFTA Guidelines determine which sectors and companies can receive it and how the maximum permitted amount is calculated.
When do the new EFTA criteria apply?
The Decision entered into force on 4 March 2026, the date it was adopted by the EFTA Surveillance Authority. It was published in the Official Journal on 18 June 2026. Companies must verify with the competent national authority whether there is a transitional period to adapt national compensation schemes.
Does this regulation affect Spanish or EU companies?
Directly, no: the EFTA Decision is applicable to Norway, Iceland and Liechtenstein, not to EU Member States. However, it establishes a framework parallel to the European one relevant to business groups with subsidiaries or installations in those three EEA territories. Companies with a presence in the EEA must review their situation.
What happens if a company already received compensation that does not meet the new criteria?
If a company received aid under the previous framework and that aid is not compatible with the new Guidelines, it may be exposed to a recovery order from the national authority. It is essential to review past and current applications in light of the new eligibility criteria and calculation methods.
What three specific elements does this EFTA Decision modify?
The Decision modifies: (1) the eligibility criteria that a company must meet to access compensation; (2) the beneficiary sectors, reviewing which industries are considered at risk of carbon leakage; and (3) the calculation methods for permitted aid, updating the formulas and parameters to determine the maximum amount per installation.
Official source
Consult full regulation in official source
Disclaimer: This article is for informational purposes only and does not constitute legal advice. For specific decisions, consult a qualified professional. Source: https://eur-lex.europa.eu/./legal-content/AUTO/?uri=OJ:L_202601374