The European Commission (Commission) has given conditional approval to a project by the Danish Government to grant aid in the form of carbon dioxide (CO2) energy tax relief. Danish companies that are covered by the EU Emissions Trading Scheme (EUTS) will now be exempt from paying CO2 tax on fuel consumption for industrial activities. The Commission found that the Danish Government’s original proposal of a full tax exemption would distort competition. The Energy Tax Directive (2003/96/EC) sets minimum energy tax rates and under the initial proposal EUTS compliant companies would pay less than this threshold. Following discussions with the Danish Government over changes to the scheme, the Commission has approved it on the condition that all affected companies pay an energy tax which is at least the minimum as set by the EC Energy Tax Directive.