The European Union (EU) on Monday approved a Danish support scheme for the country's energy intensive users with a maximum annual budget of some 27.8 million U.S. dollars.

The European Commission, the EU's executive body, said in a statement that the plan aims to partially compensate energy intensive users for payment of a tariff that finances renewable energy support. As a result, up to 85 percent of relevant payments will be awarded compensation.

In return, Denmark requires that beneficiaries of the scheme enter into energy efficiency agreements.

The Commission concluded that the Danish measure would "maintain competitiveness of energy intensive industries without unduly distorting competition in the single market."