Ljubljana - Responding the government's recent decision to subsidise large companies due to rising energy prices, environmental NGOs Umanotera and Focus said on Monday that subsidies for large industrial consumers of energy are socially inequitable and "make a mockery of climate efforts".

After recently approving financial aid for vulnerable individuals affected by the energy price hikes, the government is also working on a measure that would provide millions of euros in subsidies for selected companies to buy electricity every year until 2030, says a press release by the NGOs.

These same companies already enjoy a number of discounts and refunds on energy purchases amounting to tens of millions of euros a year, the NGOs noted.

"Part of the industry and the Chamber of Commerce and Industry (GZS) have been lobbying for such regulations for a long time," said Andrej Gnezda from Umanotera, a foundation for sustainable development.

"Now, at a time of energy price hikes and in mockery of all those living in poverty, the government plans to quietly subsidise the industrial giants," he added.

The NGOs argue that "the solution lies not in unjustified subsidies for industrial gluttons and fossil resources, but in a transition to self-supply and renewable energy sources".

They also said that the government plans to distribute more than EUR 28 million in subsidies to 12 selected industrial companies for the 2020-2023 period, for which funds have already been earmarked in Slovenia's climate fund.

Meanwhile, new pending legislation foresees that a quarter of the entire Climate Fund could be used for this purpose. At the current inflow, this would mean around EUR 30 million in subsidies per year for the selected companies until 2030.

"Covering indirect costs for companies bound to the EU Emissions Trading System will reduce their motivation to implement emission reduction measures," warned Barbara Kvac from Focus.

"They will consequently emit more greenhouse gases, and the resulting environmental damage will become a burden carried by taxpayers and future generations," she added.

Compared to other EU member states, Slovenia's economy is largely made up of energy-intensive industry - an indicator that puts Slovenia at the top of the EU, the NGOs warned.

"The high material and energy intensity of our industry is a problem for the competitiveness of our economy," they warned, adding that this problem is only getting worse and bodes ill for the future.