EU Court rules insolvent companies cannot access energy aid
Companies classified as "in difficulty" under European State aid rules cannot receive the energy subsidies available to high-consumption industries. The Court of Justice of the European Union issued this ruling on 24 September 2026 in cases concerning Acciaierie d'Italia, the steelmaker formerly known as Ilva.
The decision confirms that Italian authorities acted correctly when they rejected the company's applications for energy subsidies for 2025. The Rome-based steelmaker had sought inclusion in the lists of qualifying firms that receive contributions to offset electricity and gas costs.
What the ruling means
A company under insolvency proceedings qualifies as "in difficulty", the Luxembourg judges stated. This classification makes it ineligible for energy aid, which is designed to support competitive industries through the transition to cleaner energy.
The Court clarified that energy subsidies serve a different purpose than rescue aid and cannot be treated as equivalent instruments. Bypassing these rules would violate EU general principles, including equal treatment and legitimate expectation.
European guidelines on rescue and restructuring aid deliberately set boundaries. The Court noted that the European Commission had voluntarily limited its own discretion when adopting these frameworks. Member States cannot override them, even when national insolvency procedures aim to return a firm to profitability.
The Italian government had already aligned its domestic legislation on energy incentives with the European framework on climate, environment and energy aid. That framework explicitly excludes companies deemed "in difficulty".
Practical consequences for Acciaierie d'Italia
The former Ilva complex in Taranto will not recover the financial relief that energy aid would have provided. The company itself had argued that losing these benefits would worsen its financial position.
For a business that consumes vast amounts of energy in steel production, the ruling means higher operating costs compared with competitors that qualify for subsidies. The decision removes one potential avenue for relief at a time when the plant remains under extraordinary administration.
The final determination now returns to the Italian administrative judge, who must apply the Court's interpretation to the specific facts of the case.
Separate government funding continues
Even as the Court closed the door on energy aid, the Italian Senate approved a new decree on 24 September 2026 authorising up to €100.5M in bridge financing for 2026. The loan is intended to keep the steelworks operating while the sale process continues.
This brings total authorised financing to €349.5M, against a European-approved ceiling of €390.8M. The funds must be repaid within six months of the lease contract expiring on 31 December 2030, or upon sale of the business assets.
Separately, the government is evaluating a further €400M investment for a pre-reduction plant in Taranto, intended to feed a future electric furnace. This would supplement approximately €800M already earmarked for decarbonisation. The new operator, once selected, will be required to close coal-fed hot areas and build up to three electric furnaces.
Industry groups including Federacciai and Confindustria have previously warned that high energy costs threaten competitiveness across the sector, though no direct responses to this specific ruling have yet been made public.
