Economy minister Franz Fayot, here between Marcello Bergamo, director of Ampacet Europe, and Stéphane Vermeulen, technical director, visited the European unit of the American group in December. (Photo: SIP)

Economy minister Franz Fayot, here between Marcello Bergamo, director of Ampacet Europe, and Stéphane Vermeulen, technical director, visited the European unit of the American group in December.  (Photo: SIP)

Likely no more than nine companies in Luxembourg will be eligible to benefit form the €500m in state aid approved by the European Commission on 12 April.

Narrowing down the companies who can benefit from the EU state aid does not seem simple at first glance. While Luxembourg’s energy regulator, the Institut de Régulation (ILR), refuses to provide any information because it considers it to be strategic company data, one of its annual reports indicates that 195 companies consume more than 2GWh per year. The subject is far from anecdotal: these companies represent 58% of the electricity consumed in Luxembourg. Together with the 61,811 professional customers who consume less than 2GWh, this represents 85% of the national consumption.

René Winkin, a connoisseur of energy matters at Fedil, managed to provide a list of the biggest electricity consumers in Luxembourg  on the fly, but with no guarantees. There is only one true way to find them: compare the Nace codes in the annexes of and the latest available company directory.

Circuit Foil, nearly €13m in aid since 2020

The are essentially only nine candidates left: in alphabetical order, Alcuilix Desox (aluminium), Ampacet Luxembourg (plastics), ArcelorMittal (steel), Avery Dennison (paper and cardboard), Circuit Foil (copper), Eurofoil Luxembourg (aluminium), Exa Industries (plastics), Hydro Aluminium (aluminium) and Vossloh Cogifer Kihn (steel). However, DuPont, Goodyear, CFL, Cimalux, Kronospan, Carlex, Liberty Steel, Guardian, Luxconnect, EBRC, Tarkett, Accumalux or United Caps all miss out.

Of the nine companies, five have already received state aid since the start of the covid-19 pandemic: ArcelorMittal received €6.29m in five instalments, Circuit Foil €12.76m in two, Eurofoil €511,000, Hydro Aluminium €420,000 and Vosslog €671,000.

For the time being, it is difficult to know which companies will be able to apply for a sum of the €500m aid between now and 2030 as a number of criteria must be met: they must be subject to a sharp rise in the price of electricity and/or gas, it must be impossible to pass on this increase in the sale price of their products, and they must be able to prove that at least 50% of their operating losses can be explained by this rise in the price of energy products.

An audit or expected behavioural changes

The amount of aid will be a maximum of 75% of this additional cost. The European ambition is that, within the framework of the implementation of an efficient carbon market, companies should not relocate their production units from the EU--and therefore from Luxembourg--to third countries in order to avoid the additional costs linked to the rise in energy prices.

Does this really make sense in Luxembourg? Yes, with companies like ArcelorMittal, whose global footprint is well known… even if it retains special links with Luxembourg. Or Ampacet, which has 2,200 employees at 26 sites in 19 countries, including 211 in Luxembourg and 526 in total in Europe. Or Avery Dennison, which has 180 production units and 509 employees in Luxembourg. Or Vossloh Cogifer Kihn, which has 3,612 employees at 24 production sites in 20 countries.

“We continue to invest in Luxembourg thanks to the mutual trust established over time with the Luxembourg authorities,” said Luxembourg site manager Marcello Bergamo during a visit by economy minister Franz Fayot (LSAP) last December. “Luxembourg supports our growing presence in Europe and in nearby emerging economies such as Russia and the Middle East. Geographically, we are well positioned, with both a production site and a distribution centre strategically located to serve our European customers. We appreciate the support we have received from the ministry of economy and are confident that our mutually beneficial relationship will continue for many years.”

It’s the amount that is appealing, but in realty it’s capped per year. If energy prices continue to rise and companies no longer have enough “slack” with which to invest in significantly greening their production, they will have to be helped to become greener without thinking about leaving. This future aid will not be free: companies will have to pay at least one consideration. They will have to carry out an environmental audit, and follow up on the results within three years; or consume at least 30% decarbonised electricity; or invest at least 50% of the amount of the aid in projects that lead to a substantial reduction in the installation’s greenhouse gas emissions.

This article in French in Paperjam. It has been translated and edited for Delano.