Background information

On 10 November 2022, the Procedure for granting and administering subsidies to undertakings operating in sectors severely affected by increases in energy prices, approved by Government Resolution No. 1084 came into effect that foresaw the support for the most energy-intensive undertakings in Lithuania. The measure aims at mitigating the negative effects of energy price increases in highly energy-intensive sectors in Lithuania.

Content of measure

According to the Procedure, energy-intensive undertakings are defined as undertakings where energy consumption accounted for 10% or more of their total costs in 2021 and 2022. Business sectors that are eligible for the measure include undertakings engaged in the following economic activities: mining of metal ores; manufacture of textiles; manufacture of wearing apparel; manufacture of wood and of products of wood and cork, except furniture; manufacture of articles of straw and plaiting materials; manufacture of paper and paper products; manufacture of coke and refined petroleum products; manufacture of chemicals and chemical products; manufacture of other non-metallic mineral products; manufacture of basic metals.

The subsidy is only available to undertakings that have received invitation from the State Tax Inspectorate (STI) and meet all the criteria set out in the Procedure. The amount of the subsidy is linked to the taxes paid by the undertaking (personal income tax and corporate income tax). The maximum aid accounts for 30% of the declared personal income and corporate income taxes. The maximum amount of the subsidy is €500,000 and the minimum is €500. The subsidy funds will be transferred to the undertakings by 28 December 2022.

Use of measure

At the beginning of November 2022, the STI selected 2,200 undertakings severely affected by energy prices and sent them personal invitations to apply for a non-refundable subsidy by 22 November 2022. The budget for the measure is €30 million.

Target groups

Workers	Businesses	Citizens
Does not apply to workers	Sector specific set of companies	Does not apply to citizens

Actors and funding

Actors	Funding
National government Employers' organisations	National funds

Social partners

Social partners' role in designing the measure and form of involvement:

	Trade unions	Employers' organisations
Role	No involvement	Consulted
Form	Not applicable	Any other form of consultation, institutionalised (as stable working groups or committees) or informal

Social partners' role in the implementation, monitoring and assessment phase:

• No involvement
• Main level of involvement: Peak or cross-sectoral level

Involvement

Employers organisations were partially involved in the design of the measure. E.g., on 8 September 2022, representatives of the country’s largest industrial companies attended a meeting of the Committee on Budget and Finance of the Seimas (Parliament) of the Republic of Lithuania, where they presented the current business situation and stressed the need for state aid. Subsidies were one of the measures, the necessity of which was emphasised by the majority of representatives of the employers' organisations

Views and reactions

In general, the measure was welcomed by representatives of major employers’ organisations in Lithuania. However, there has also been some criticism from the employers. Some businesses argued that the Government has not chosen the right criteria for identifying energy-intensive undertakings. According to the representatives of furniture manufacturing and textile companies, despite the significant increase in energy costs, some manufacturing companies will not be identified as energy-intensive undertakings, as increased costs of raw materials account for a larger share of their costs. According to them, prices of raw material should be eliminated when calculating compensation for energy-intensive undertakings.

Sectors and occupations

This case is not occupation-specific.

Sources

• 17 October 2022: It is not clear to the businesses how the support promised by the state will be distributed (Verslui neaišku, kaip bus dalijama valstybės žadama parama (kauno.diena.lt)
• 28 October 2022: Resolution No 1084 of the Government of the Republic of Lithuani (www.e-tar.lt)