BRUSSELS (Reuters) - Poland secured EU approval on Friday to launch a 417 million euro ($465 million) scheme to compensate energy-intensive companies hurt by higher electricity prices.
The European Commission said the project, which will run until the end of next year, complies with EU state aid rules, which seek to ensure that EU governments do not grant unfair support to companies.
When it announced the plan in June, the Polish government said that around 300 companies would be entitled to receive compensation.
The EU has criticized Poland for its heavy use of polluting coal for electricity. However, the Polish government has said the scheme would encourage companies to stay in Poland and not move production elsewhere.
"The scheme will avoid an increase in global greenhouse gas emissions due to companies relocating to countries outside the EU with less stringent environmental regulation," the EU competition enforcer said in a statement.
Wholesale power prices in Poland soared last year as carbon emission costs and coal prices surged because the country generates most of its electricity from coal.
Companies eligible for the compensation scheme must submit appropriate documents to the energy regulator by end of March every year.