Greek Prime Minister Kyriakos Mitsotakis has announced a 95 million euro energy subsidy package to help domestic industrial manufacturers offset rising electricity costs.
The emergency intervention is estimated to deliver relief of 20 to 25 euros per megawatt-hour for Greek industrial plants following marathon government negotiations. Mitsotakis announced the measures on Monday evening during an address to the annual general assembly of SEV, the Hellenic Federation of Enterprises.
Government and industry sources noted that final financial relief for individual beneficiaries will depend on specific implementation rules, which officials may release as early as Tuesday. Mitsotakis told the business assembly that the government package would lift 95 million euros in energy burdens from Greek industry, warning that the coming winter could prove significantly harsher than initially anticipated.
The subsidy framework targets two distinct groups of industrial electricity consumers. It covers companies outside the existing carbon emissions cost compensation mechanism, as well as energy-intensive manufacturers already inside the scheme who will receive additional support due to worsening global energy market conditions. Mitsotakis specifically highlighted energy-intensive sectors including cement, food processing, paper products, and plastics manufacturing.
Budget breakdown and eligible sectors
Initial approximate calculations from competent sources indicate that roughly two-thirds of the total funding, amounting to about 63 million euros, will go to industrial facilities currently participating in the carbon compensation mechanism. The remaining one-third of the allocation, totaling around 32 million euros, is earmarked for industrial consumers operating outside that scheme. Officials emphasized that these figures represent preliminary estimates rather than finalized category allocations.
Major industrial branches with heavy electricity requirements, such as cement manufacturing, are currently excluded from the standard carbon compensation mechanism but will receive funding under the new measure. Indirect carbon emission compensation reimburses eligible energy-intensive industries for a portion of the carbon allowance costs that electricity generators pass on through wholesale power prices. State compensation aims to preserve industrial competitiveness within Europe and prevent carbon leakage, where high compliance costs force manufacturers to relocate production outside the European Union.
Different retroactivity rules for factories
The structure of the package establishes different retroactive coverage periods based on how factories are categorized. For eligible businesses outside the carbon compensation scheme, which consume between 1 and 1.5 terawatt-hours of electricity annually and represent the majority of industrial sites with roughly 600 power supply meters according to industry figures, relief will apply retroactively for the entire year of 2026.
In contrast, for the 70 industrial meters operating within the compensation mechanism, which collectively consume 6.5 to 7 terawatt-hours per year, the additional assistance will cover power usage starting from August 2026 onwards. Because final payout amounts depend on both eligible consumption volume and the number of covered months, actual savings will vary by firm, making the estimate of 20 to 25 euros per megawatt-hour an average expected benefit rather than a uniform flat rate.
Price floor and budget limitations
The subsidy mechanism incorporates structural limits to control overall government spending. Sources familiar with the plan stated that a price floor has been set at 50 euros per megawatt-hour. This floor represents the minimum price level below which electricity costs cannot fall after applying state aid to eligible consumption, rather than a guaranteed power rate across a company's total electricity consumption.
To ensure total expenditure does not exceed available resources, the scheme includes a strict budget cap. Government officials confirmed that the 95 million euro figure represents a firm fiscal ceiling. Even if regional energy markets experience renewed volatility or increased demand, the plan does not contain any mechanism for automatic budget expansion.
European state aid frameworks
Greece will implement the subsidy by utilizing two European Union state aid mechanisms designed to support industrial competitiveness, known as CISAF and METSAF. CISAF, the Clean Industrial State Aid Framework, allows EU member states to grant targeted energy cost relief to energy-intensive businesses through 2030. Under CISAF rules, national aid can reduce up to 50 percent of the average annual wholesale electricity price for up to 50 percent of a factory's total annual energy consumption.
The second tool, METSAF, was established as a temporary emergency framework in response to economic disruptions from the Middle East crisis. METSAF permits member states to increase maximum subsidy rates from 50 percent to 70 percent of average wholesale prices for eligible consumption. Although METSAF is currently scheduled to expire at the end of 2026, the European Commission announced on Monday that it proposes to extend the mechanism. Neither European tool provides direct EU funding, meaning member states must finance the measures from national budgets. Market experts noted that because formal approval from Brussels is required, actual cash payouts to Greek factories are expected to take place in 2027 for energy consumed throughout 2026.
Approval process in Brussels
Greek officials have already initiated informal talks with European Commission competition authorities to secure approval for the scheme. Officials from the Ministry of Environment and Energy confirmed that technical discussions with Brussels are underway, noting that the initiative does not start from scratch. However, ministry representatives did not confirm whether formal pre-notification has been submitted or when an official filing will occur. The Greek plan is modeled on similar industrial support mechanisms already approved for four other EU member states, with main variations involving spending caps and methods for calculating reference electricity prices.
Industrial group welcomes state support
EVIKEN, the Association of Industrial Energy Consumers representing 27 major domestic companies in sectors including cement, steel, non-ferrous metals, paper, and fertilizers, welcomed the government announcement as a positive step. EVIKEN stated that the prime minister's commitment confirms that maintaining industrial competitiveness has become a central priority for both Greek and European leadership.
The industrial association highlighted recent statements from European Commission leadership regarding the extension of state aid tools as evidence that Brussels recognizes the ongoing burden of elevated energy prices on manufacturing. EVIKEN noted that Greece is taking appropriate action by adopting frameworks already utilized by other EU member states. The organization added that it will evaluate the detailed implementation rules once published to verify accessibility for all eligible industrial energy users, stressing that lower power costs and a level playing field across Europe remain vital to preserving manufacturing output, investment, and jobs in Greece.
