Support for gas-intensive industries
Extraordinary measures to contain the rise in energy prices
The current geopolitical situation has led the European Union to make extraordinary decisions, considering their direct and indirect effects. In this context, we highlight Communication 2022/C 131 I/01, which has two major objectives.
- Ensure liquidity;
- Access to financing for companies, especially small and medium enterprises.
The increase in the cost of energy and food and the disruption to supply chains, which was triggered by the Covid 19 pandemic, has led the Portuguese government to launch a set of short-term initiatives to protect companies and families whilst guaranteeing social cohesion and economic growth. The initiatives are based on four basic areas, one of which, which we discuss here, is the containment of energy prices under Decree-Law no. B/2022 of April 18, which introduces the system of incentives to “Support Gas Intensive Industries”.
Main characteristics of the incentives system
1. Beneficiaries
The beneficiaries of this initiative are companies whose main economic activity is listed in the Portuguese Classification of Economic Activities Information System, irrespective of their legal status and with the exception of companies that only operate in the following sectors:
- Energy production;
- Refining of oil derivatives;
- Fisheries and aquaculture;
- Primary production of agricultural products and forests;
- Processing and trade in agricultural products listed in Annex I of the Treaty on the Functioning of the European Union and processing and trade in forest products.
2. Support
Support will be granted on a non-recoverable basis. However, it is important to note that eligible costs will be subject to a support tax rate of 30%, which will be determined by multiplying the number of natural gas units purchased by the company from external suppliers (as an end consumer in the eligible period) by the difference between the price the company pays per unit consumed in a given month and the unit price paid by the company, on average, between January 1, 2021 and December 31, 2021. Support payments cannot exceed Euros 400 thousand per company.
An eligible period is the time period indicated in a specific notice for application submissions, which must be between February 1, 2022 and December 31, 2022.
If support is granted before the eligible costs have been defined, an advance may be paid based on estimates of eligible costs. The maximum amount of this advance is Euros 200 thousand per company.
One of this conditions of this support is that companies asking for it must have positive equity up to and including December 31, 2021. It is also important to highlight the role of the certified accountant responsible for the company's accounting, who will have to:
- For the industrial manufacturing sector, submit a statement in which the company demonstrates that it is an intensive energy user, within the meaning of the first part of subparagraph a) of paragraph 1 of article 17 of Council Directive 2003/96/EC, of October 27, 2003 and, cumulatively, demonstrate that the costs of acquiring natural gas amount to at least 2% of the value of production in the reference period, i.e., between January 1, 2021 and December 31, 2021 ;
- Submit a statement verifying the average number of natural gas units purchased by the company from external suppliers as an end consumer in the period between January 1, 2021 and December 31, 2021;
- Submit a statement verifying the increase in the price paid by the company per unit of natural gas consumed (measured in EUR/MWh) as the difference between the unit price paid by the company in a given month and the 200% increase in the average unit price paid by the company in the reference period, i.e. between January 1, 2021 and December 31, 2021.
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16.6 billion euros to boost Portugal's recovery
The European Union has decided to strengthen the budget to boost Europe's economic and social recovery and growth. These funds are made available in Portugal via the RRP.
BBVA helps you to calculate the potential stimulus your company may receive.