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State Aid

ESA: Arbitration award between Landsvirkjun and Elkem Iceland not state aid




Today, ESA has concluded that the power price, set by an arbitration tribunal, that Elkem Iceland pays to the state-owned power producer Landsvirkjun does not constitute state aid.

In July, Iceland notified the arbitration award to ESA for legal certainty. According to state aid rules, state resources may not distort competition by giving advantages to certain companies.

ESA has now concluded that the award decided by the arbitration tribunal did not give Elkem advantage. The power price was determined by an independent tribunal of experts based on clear and objective parameters that reflect market terms.

Background Information:

  • In 1975, Landsvirkjun and Elkem entered into a long-term power contract.
  • In 2007, the parties agreed to have any future disagreement about the power price subject to arbitration.
  • In 2017, the arbitration clause was triggered by Elkem.
  • On 16 May 2019, the Arbitration Tribunal rendered its Final Award setting the price for the power to be sold by Landsvirkjun to Elkem. The new power price entered into force April 1st 2019.

Once it has been cleared of any confidential information, today's decision will be published in ESA's state aid register, normally within a month.

For further information, please contact:

Gunnar Hörður Garðarsson
Communications Officer
mob. +32 490 57 63 38

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