METSAF, the new European support mechanism in the context of the Middle East crisis

The European Commission approved yesterday the METSAF mechanism, a temporary framework for state aid to support the affected sectors, in the context of the Middle East crisis, designed to mitigate the impact on agriculture, fisheries, transport and energy-intensive industries. This framework is temporary, to be applied until 31 December 2026, during which time its content, scope and duration will be reviewed depending on developments in the region and the general economic situation.

While the transition to a clean economy remains the long-term solution to protect European companies from global energy shocks, METSAF allows Member States to intervene immediately to prevent irreversible damage to the growth of exposed companies. Support can take various forms for companies in agriculture, fisheries and transport, including aid based on actual consumption to cover part of the price increases for fuel or fertilisers, as well as a simplified approach for small amounts.

Specifically, for agriculture, fisheries, land transport (road, rail and inland waterways) and short sea shipping within the EU, Member States can compensate up to 70% of the additional costs generated by the increase in fuel and fertiliser prices caused by the crisis. The price increase will be determined by each Member State by comparing the relevant market price with a historical reference price, and the total additional costs will be calculated on the basis of current or pre-crisis consumption.

A simplified option is also foreseen for these sectors, allowing aid to be granted without providing detailed evidence of actual consumption, with Member States being able to calibrate the support according to the size and type of the beneficiaries' activities, general estimates of fuel consumption or other relevant indicators. In this case, each beneficiary can receive up to euro50,000.

In parallel, the framework introduces a temporary adjustment of the Clean Industry Mechanism, allowing for increased flexibility and higher aid intensities to respond to electricity price increases. For eligible energy-intensive industries, the aid intensity can increase from 50% to up to 70% of the electricity cost of eligible consumption, covering up to 50% of the beneficiary's total consumption. No additional requirements are imposed on decarbonisation efforts and the aid can be cumulated with that granted under the ETS schemes, up to half of the amount of aid granted under the existing mechanism.

The measures provided for by METSAF must be notified to the Commission, but the framework allows for a fast approval process. The institution is ready to assess, on a case-by-case basis and subject to certain conditions, temporary measures that may include fuel subsidies for gas-fired electricity generation, with the aim of reducing overall energy costs.

The adoption of this framework comes after the European Council called, in its conclusions of 19 March 2026, for temporary and targeted measures to respond to recent increases in imported fossil fuel prices, as well as actions to reduce electricity prices and excessive short-term volatility.