The European Commission presented a new state aid framework to accompany its flagship Clean Industrial Deal – CISAF (Clean Industrial Deal State Aid Framework), aiming to support the development of clean energy, industrial decarbonisation and clean technologies.

Subsidising industrial electricity prices in return for renewable capacity build-out is one of the new measures featured in the state aid toolbox. Italy already implemented the measure through its Energy Release; Germany and Greece could be next in line. The effect on the Guarantees of Origin (GO) and Power Purchase Agreement (PPA) markets depends on how many Member States will employ and design the new state aid instruments. Ultimately, renewable electricity consumption and the electrification of industrial processes are encouraged.

Background

Member States can devise and notify the Commission of the CISAF-styled state aid measures from 25 June 2025 onwards; the state aid framework will run until the end of 2030. Commission’s approval is intended to be granted within six weeks after application.

CISAF is deliberately broad, outlining simplified criteria that the Commission will apply when approving national subsidy schemes. The new framework complements existing state aid rules, such as the Climate, Environmental and Energy Aid Guidelines (CEEAG), to which the state aid for discounted electricity levies belongs.

CISAF targets two major beneficiary groups: energy-intensive sectors plus renewable and low-carbon fuels producers. It contains measures for the following types of aid:

accelerating the rollout of clean energy,

providing support for electricity costs for energy-intensive users,

facilitating industrial decarbonisation,

ensuring sufficient manufacturing capacity in clean technologies,

derisking private investments

Below, Veyt provides an overview of the state aid scheme that subsidises electricity costs for energy-intensive sectors.

Aid for energy-intensive sectors

For the industrials, the Commission appears to have drawn inspiration from the Italian Energy Release scheme, where beneficiaries can temporarily secure discounted power prices in exchange for building renewable energy capacities. This, in turn, encourages the industrials to consume more renewable electricity.

CISAF allows up to 50 % of a company’s annual power consumption to benefit from a lower electricity price (not below EUR 50/MWh). In Italy, beneficiaries will also get cancelled GOs free of charge for the discounted renewable electricity volumes; CISAF does not have any GO-related provisions, leaving it up to European countries to design the details of the scheme. In return, beneficiaries are required to allocate at least half of the subsidy amount for investments that make an additional contribution to reducing the costs of the electricity system, reflecting market and system needs in the specific Member State, without increasing fossil fuel consumption. It is up to each Member State to define these investments, but the Commission provides some guidance with a non-exhaustive list of examples, including investments in the development of renewable energy capacities, energy storage solutions, or electrolysers, etc.

Companies that can benefit from the new state aid rules are the same as those covered by the state aid for indirect emissions costs, which compensates for the part of the costs incurred in the European carbon market. In turn, CISAF aid can be combined with other state aid schemes.

As such, energy-intensive companies with exposure to carbon leakage (e.g. iron and steel, aluminium, cement, fertilisers, etc.) would be eligible for temporary power price relief.

Akin to the Italian Energy release, aid would last for a maximum of three years.

Market impact

CISAF has a dual purpose: to boost RES-E supply and to encourage industrial appetite for renewable electricity.

The effect of the CISAF state aid scheme for industrials on the GO market ultimately depends on how many Member States file the state aid decision for review by the Commission, the conditions that they will require of beneficiaries and whether there are overlapping State aid schemes.

For instance, if Member States design their CISAF schemes by taking the Italian Energy Release as a blueprint in a similar context, it could be bearish for the GO market in the short- to medium-term as GOs would be automatically cancelled for the consumption of renewable electricity provided by the state, making beneficiaries eligible for other State aid schemes that otherwise would promote the demand for GOs given by the State. However, in a regulatory environment with no such cumulation of State aid schemes, a scheme similar to the Italian Energy Release could have a bullish impact as it would add new demand.

For the PPA market, the CISAF scheme could provide demand-side support, if other Member States follow in the Italian footsteps by allowing to use of intermediaries to build new renewable projects. The Energy Release obliges beneficiaries to produce and return double the amount of renewable electricity they receive over 20 years. They can secure these capacity additions via third parties, such as utilities or specialised developers, by signing PPAs.

In Greece, the industry is currently pushing the government to adopt such a scheme, with the official response expected by the year’s end. The Association of Green Industries is asking theGreek state to provide 10 TWh of RES-E annually for three years at EUR 60/MWh. In return, the beneficiaries would commit to return double the amount of electricity to the government over the next 20 years.

Separately, the new German government has been promoting an industry electricity price, with plans to operate the scheme from 2026 until 2029. Domestic electricity prices rose from EUR 78/MWh in 2024 to EUR 88/MWh in 2025 (year-to-date). Veyt’s forecasting shows that power prices are set to increase from EUR 81/MWh in 2026 to EUR 90/MWh in 2028. Germany is in the final stages of negotiations with the European Commission concerning the details of the scheme. If the subsidy package resembles the Italian Energy Release, it could promote future GO and PPA demand. Earlier reporting suggests that the government could earmark about four billion euros to support up to 2,200 companies.

If and when Germany and Greece agree on the functioning of the scheme, they would need to submit it to the Commission for assessment to comply with EU law to ensure that the bloc’s single market is not compromised. Countries need the EC’s approval before they can grant such aid. Already, Italy’s scheme had been temporarily stalled pending the Commission’s probe, but was recently unblocked and allowed to proceed.

So far, there have been just a handful of CISAF state aid decisions (the Commission approved a French aid scheme for offshore wind farms and the Italian scheme to support manufacturing capacity in clean technologies); therefore, it is premature to evaluate its impact on the market. Veyt closely follows this development and will provide a separate analyst update on the topic once more information emerges.