Germany Update: Application deadline for grants from the Energy Cost Containment Program (EKDP) has started!

Since 15 July 2022, companies from particularly energy-intensive industries have been able to apply to the Federal Office of Economics and Export Control (BAFA) for a subsidy for their natural gas and electricity costs. The subsidies are not insignificant and are capped at 50 million euros per (affiliated) company. With the Energy Cost Containment Program (EKDP), the Federal Ministry of Economics (BMWK) wants to support companies that are particularly affected by the rise in energy prices as a result of the Russian war of aggression in Ukraine. The aim is to cushion special hardships in a targeted manner and to avert situations that threaten the existence of affected companies.

The application deadline is 31 August 2022 (material cut-off period)

Companies that are active in particularly energy-intensive sectors of the economy are eligible to apply. Further information on the eligibility for applications with a list of the eligible industries can be found in the leaflet on the energy cost containment programme published by the BAFA.

In order to be eligible, depending on the level of support, a company must belong to energy- and trade-intensive economic sector according to Annex I of the Guidelines for State Climate, Environmental Protection and Energy Aid 2022 (KUEBLL – see Annex A of the LINKED LEAFLET of the BAFA) or to a particularly energy- and trade-intensive economic sector according to the Annex to the EU Crisis Framework (Annex B of the linked leaflet of the BAFA) and at the same time “energy-intensive operation” within the meaning of the so-called Energy Taxation Directive. For this purpose, the energy procurement costs of the company concerned must have amounted to at least 3 % of the production value in the last financial year closed.

The benefits from the EKDP are made – initially subject to the final examination and a possible reclaim – by means of a non-repayable subsidy. Eligible are shares of the energy procurement costs for natural gas and electricity in the funding period from February to September 2022. Whether the funding period will be extended beyond that is an open question. The grants are paid out in three stages for the eligibility period, which differs, inter alia, depending on the company’s industry, the grant rate, the maximum amounts, and any operating loss. The application must be submitted by the end of 31 August 2022 at the latest.

Application only online via ELAN-K2 online portal of the BAFA

The necessary information for the application, which is only possible paperless via the ELAN-K2 online portal of the BAFA, can be found on the BAFA website.

A prerequisite for the submission of the application is, among other things, that all members of the Executive Board declare at the time of the application that they will completely waive an increase in their remuneration and the variable part of their remuneration for the financial year current at the time of signature.

The specific legal basis for the subsidies is the “Directive on the Granting of Equitable Benefits for the Temporary Cost Containment of Natural Gas and Electricity Price Increases (Energy Cost Containment Programme)” published by the BMWK of 12 July 2022. State aid law basis for the Directive on the Energy Cost Containment Programme is the European Commission’s Temporary Crisis Framework for State Aid to Support the Economy as a result of Russia’s aggression against the Ukraine (so-called EU crisis framework of 24 March 2022).

Be sure to check eligibility!

Whether and to what extent increased energy costs of a gas customer, e.g., a manufacturing company can be passed on to customers in the supply chain regularly depends on the specific contractual situation and is usually fraught with considerable legal uncertainties. 

By MELCHERS, Germany, a Transatlantic Law International Affiliated Firm.  

For further information or for any assistance please contact germany@transatlanticlaw.com

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