The Commission approves a Spanish state aid scheme to support the decarbonisation of heat used in industrial processes

The European Commission has approved, in accordance with EU state aid rules, a €50 million Spanish scheme to promote the decarbonisation of heat in industrial processes. This will be done through the ‘Auctions as a Service (AAAS)’ tool of the 2025 heat auction under the Innovation Fund. The Spanish scheme will support projects that decarbonise heat in industrial processes through innovative technologies, including heat solutions based on electricity and renewables. This is the first AAAS project outside the hydrogen sector.

Under the scheme, the aid will take the form of afixed premium per tonne of CO2 avoided, awarded through a competitive tender. The aid will cover the additional costs of switching from heat production using fossil fuels to electrified or directly renewable heat production. The scheme includes various mechanisms to reward flexible electricity consumption and will be financed from the Recovery and Resilience Fund. Aid may be granted until 31 December 2026. The aid will be linked to verified decarbonised heat production and will be paid every six months for a maximum of five years.

The Commission assessed the scheme under EU state aid rules, in particular under Article 107(3)(c) of the Treaty on the Functioning of the European Union, which allows Member States to support the development of certain economic activities under certain conditions, and the 2022 Guidelines on State Aid for Climate, Environmental Protection and Energy. In particular, the Commission considered that the scheme isnecessary and appropriateto achieve the reduction of greenhouse gas emissions and the acceleration of the green transition. Furthermore, the scheme isproportionate, as it is limited to the minimum necessary and has a limited impact on competition and trade between Member States. In view of these reasons, the Commission has approved the Spanish aid scheme in accordance with the relevant EU rules.

The non-confidential version of the Decision will be published under number SA.121923 in the State Aid Register on the Commission’s competition website, once any confidentiality issues have been resolved.

Further information: European Commission