Slovak Government Energy Aid to Revive Struggling Aluminum Smelters

Slovakia's government has approved increased financial support for energy-intensive industries, a move expected to revive two major aluminum production facilities currently operating at minimal capacity due to high energy costs. OFZ, an aluminum smelter in the Orava region of northern Slovakia, is running only one of its seven furnaces because of soaring energy prices. While the company welcomes the new government assistance, it says a return to higher production levels will be gradual and is not expected to begin in earnest until next year. The aid will also benefit Slovalco, a larger aluminum smelter in the central Slovak town of Žiar nad Hronom, which faces similar energy-related constraints. The government's decision raises the annual rebate on emissions allowance payments — a cost that heavily burdens energy-intensive manufacturers — to 140 million euros per year. This compensation mechanism, which returns a portion of the fees companies pay under the EU's carbon emissions trading system, is intended to keep Slovak heavy industry competitive. The measure is seen as significant for the broader domestic energy-intensive industrial sector, which has struggled to remain viable amid persistently high electricity and energy prices across Europe.