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State Aid

State Aid: Aid for Hydro Aluminium's demonstration plant on Karmøy approved



Today, the EFTA Surveillance Authority approved a grant of up to NOK 1 486 million (approx. EUR 165 million) to Hydro Aluminium AS for the construction of a demonstration plant in the municipality of Karmøy, Norway.

The purpose of the aid is to enable the construction of a demonstration plant for the verification of Hydro Aluminium's new smelting cell technology. Based on the research so far, this new technology is expected to lead to an important reduction in both the electricity consumption and the direct greenhouse gas emissions of aluminium smelters. Due to the technological risks involved in the design of the new cells and the high investment costs of an aluminium smelter, a verification of the technology at industrial scale is required before it can be put to commercial use.

”Today's decision authorises Enova to support the market diffusion of an innovative, energy-efficient smelting technology from the Energy Fund. Once successfully verified, the technology has the potential to contribute to a substantial reduction in energy consumption and greenhouse gas emissions throughout the aluminium industry”, Ms Oda Helen Sletnes, president of the EFTA Surveillance Authority, said.

The aid will be granted by Enova under the new technology programme, which forms part of the Energy Fund scheme as approved by the Authority in July 2011. The grant had to be individually notified to the Authority and be the object of a detailed assessment as the proposed aid amount exceeded the threshold of EUR 7.5 million set out in that decision.

In its assessment, the Authority concluded that the project suffers from a funding gap and would not be pursued absent the aid measure. Furthermore, the level of public funding is below the maximum aid intensity of 50% under the Energy Fund scheme. There are also mechanisms to prevent overcompensation in case the investment costs or the market outlook are subject to changes. Finally, the new technology will be available to third parties on commercial terms for investments in the EEA once it has been successfully verified in the demonstration plant.

The Authority thus raised no objections to the proposed measure under the EEA state aid rules.

A non-confidential version of the decision will be published in the register of state aid decisions on the Authority's website, normally within a month.

For further information, please contact:

Mr. Andreas Kjeldsberg Pihl
Press & Information Officer
tel. (+32)(0)2 286 18 66
mob. (+32)(0)492 900 187

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