A British plan to compensate certain energy-intensive industries for higher energy costs resulting from its carbon price floor is in line with EU state aid rules, the European Commission said.

The UK's carbon price floor, which was raised to £9.55/t of carbon dioxide in April, is effectively a tax on companies' use of fossil fuels and is aimed at reducing greenhouse gas emissions.

In a statement, the Commission said the measure "would further EU energy objectives without unduly distorting competition" in the market.