EU / Bulgaria — CISAF Electricity Price Relief Scheme SA.120414: EUR 334 million subsidy for energy-intensive industries 2025–2028

Mechanism

The European Commission approved Bulgaria's scheme on 15 April 2026 under Article 107(3)(c) TFEU as compatible with the internal market, relying on the Clean Industrial Deal State Aid Framework (CISAF) adopted 25 June 2025. CISAF allows Member States to grant temporary electricity price relief to energy-intensive industries until 31 December 2030 to protect EU industrial competitiveness against higher European electricity prices while binding decarbonisation conditionality to the aid.

Aid delivery: Bulgaria will pay the subsidy through electricity suppliers — qualifying beneficiaries receive a reduction directly on their monthly electricity bill. The reduced price cannot fall below €50/MWh (the CISAF-mandated floor, preventing beneficiaries from receiving electricity below marginal-cost).

Eligible beneficiaries: Companies in sectors listed as facing significant electro-intensity carbon-leakage risk under the 2022 Guidelines on State Aid for Climate, Environmental Protection and Energy (CEEAG). These correspond substantially to ETS Free Allocation high-leakage sectors and CBAM Annex I goods producers: steel, glass, chemicals (soda ash, fertilisers), aluminium, copper, cement.

Funding envelope: €334 million over three years (2025–2028), financed through the Bulgarian state budget with potential EU Modernisation Fund channelling pathways.

Binding conditionality: Beneficiaries must reinvest at least 50% of the aid received in new or modernised assets designed to reduce electricity system costs (energy-efficiency retrofits, electrification of industrial heat, on-site renewable generation, waste-heat recovery) and the investment cannot increase fossil fuel use — a hard no-fossil-expansion clause.

Scheme period: Retroactive from 1 July 2025 (pre-approval retroactivity is permitted under CISAF to cover the scheme's implementation period), running to 30 June 2028.

CISAF precedent significance

This is the first EU member-state scheme approved under the CISAF framework — Germany (SA.120416) and Slovenia were approved in the same decision batch. The approval establishes:

1. The precedential template for subsequent CISAF approvals in the EU pipeline (German energy-intensive industry scheme, French Élec-IIE, Italian Decreto Energivori, Spanish Compensación CO₂ indirectos, Polish Energy-Intensive Industry Support are all expected to apply). 2. The operative conditionality architecture — €50/MWh floor + 50% reinvestment + no-fossil-expansion — as the standardised CISAF template. 3. Bulgaria's position in the EU member-state convergence on energy-intensive-industry subsidy architecture alongside the existing DE/FR/IT/ES electricity-cost-compensation schemes.

Downstream implications

• FDI-location competition: The €334m subsidy materially improves Bulgaria's relative industrial-electricity-cost position vs Romania, Greece, Türkiye, and Serbia — relevant for energy-intensive FDI-location decisions in steel, glass, chemicals, and cement new builds.
• Competitive peers in pipeline: Germany (SA.120416) and Slovenia approved in the same batch; once Germany's much larger scheme flows through (likely several billion EUR), the relative BG advantage narrows but the decarbonisation-conditionality architecture becomes EU-wide.
• Aurubis Bulgaria (Pirdop copper smelter): One of Europe's largest copper smelters (~300 kt/y refined copper), direct beneficiary; reduces Aurubis AG's BG operating-cost exposure.
• CBAM and ETS linkage: Eligible beneficiaries are predominantly CBAM Annex I goods producers — CBAM's import-adjustment charge on their non-EU competitors partially offsets the competitive distortion created by this subsidy, which is the Commission's legal rationale for treating the scheme as compatible.

Open questions

• Exact CELEX reference for the CISAF Framework Communication (25 June 2025) — cited as 52025XC03726 in queue research but not independently verified; EUR-Lex should be consulted for the canonical CELEX.
• Whether Germany (SA.120416) and Slovenia scheme details warrant separate register entries — structurally identical instrument-class, different national envelopes.
• KEVR (Bulgarian Commission for Energy and Water Regulation) reporting cadence and first annual KPI verification timeline.