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The Development of Energy Price Caps for Large Enterprises

The Development of Energy Price Caps for Large Enterprises

Czech Republic
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Although negotiations regarding the method of capping electricity and gas prices are still ongoing, both at the national level and in the EU, the Government of the Czech Republic has already issued the expected amendment specifying the capping of energy prices for large enterprises.

According to the current EU Temporary Framework, large enterprises are limited in terms of the amount of support they can receive within the European Economic Area. This threshold is not limited in time, it will be applied to all support issued by individual Member States in connection with the Russian aggression in Ukraine. However, the established mechanism for calculating the threshold runs into problematic verification of approved support to large enterprises by individual states. In principle, the aforementioned amendment pre-empts the likely future adjustment of the EU Temporary Framework and introduces national thresholds that will only be applied to businesses within the Czech Republic.

The lowest threshold was set by the government at EUR 2 million. However, in the case of high eligible energy supply costs, it can be several times higher.

Large enterprises are now obliged to report the amount of property benefit (i.e. the amount of support exceeding the relevant thresholds) to the Ministry of Industry and Trade every quarter.

Exceeding this threshold during the quarter is not a violation, but the company will be obliged to transfer the excess property benefit back to the state budget.

By David Nemecek, Associate, Eversheds Sutherland

Eversheds Sutherland at a Glance

Eversheds Sutherland with offices in Bratislava and Prague and as part of an international network, provides comprehensive legal advice also in foreign jurisdictions.

Our team consists of a total of more than 40 lawyers in the Czech Republic and Slovakia, most of whom have previously worked at major international and local law firms and have extensive experience in particular in the areas of corporate law, including mergers and acquisitions, capital markets, real estate, employment law, competition law, litigation and arbitration, energy, infrastructure, as well as environmental and ESG law.

Our advisory services are offered in Slovak, German, Czech and English language. Members of our team include attorneys registered with the Austrian Bar Association. On this basis, and because we are part of Eversheds Sutherland, we are also able to offer extensive legal support on various foreign legal issues.

We listen to our clients, we understand their business and we also understand what they need. So we can always find the best solution for the particular situation. We work quickly, efficiently and take responsibility for our work.

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