BRUSSELS (Reuters) -The European Commission on Monday said it would extend a loosening of state aid rules by three more months than initially planned, to end June 2024, to allow EU countries to compensate companies for high energy prices resulting from Russia’s invasion of Ukraine and tensions in the Middle East.

The EU executive relaxed its state aid rules in March last year after thousands of companies were hit by the war in Ukraine, saying the easier regime would end in December this year.

Earlier this month, the Commission had indicated it would extend this loosening until March 2024, but it said in a statement it had taken in account “feedback received from Member States”.

“(This) will allow Member States, where needed, to extend their support schemes and ensure that companies still affected by the crisis will not be cut off from necessary support in the upcoming winter heating period,” the Commission said in a statement.

The changes announced this Monday cover compensation for high energy prices but also some broader aspects, with aid ceilings increased for agriculture, fisheries and other sectors.

The extended rules will not apply to liquidity support such as state guarantees and subsidised loans, and measures aimed at supporting electricity demand reduction.

“The sections (…) covering the transition towards a net-zero economy, required to further decarbonise the European economy and accelerate becoming more independent from fossil fuels, are not affected by today’s amendment and will remain available until 31 December 2025,” the Commission said.

(Reporting by Philip Blenkinsop and Benoit Van Overstraeten; Editing by Toby Chopra and Alex Richardson)

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