27. Government grants
The amount accrued under this item resulted primarily from grants for investments in environmental protection and for general investment support.
Investment grants are reported as liabilities and recognized in profit or loss on a straight-line basis over the useful life of the subsidized investments as “Income from the reversal of investment grants”.
Government grants for cost reimbursements are recognized as other income in the period in which the related costs are incurred, unless the receipt of the grant is contingent on conditions that are not yet sufficiently likely to occur. Receivables from funding commitments are reported in the consolidated statement of financial position under other assets.
Government grants of EUR 16,556 thousand were recognized in profit or loss in the reporting period (2024: EUR 15,067 thousand), resulting predominantly from promotion of research activities and energy topics. Any conditions attached to the grants were fulfilled and repayment, in full or in part, is therefore considered unlikely.
Government grants also included EUR 63,254 thousand of emission certificates as at December 31, 2025 (December 31, 2024: EUR 82,069 thousand). In accordance with Directive 2003/87/EC of the European Parliament and the European Council on a system for trading greenhouse gas emission certificates, a total of 366,189 EU-emission certificates and 25,517 UK-emission certificates were allocated free of charge to the relevant companies in the Lenzing Group for 2025 through national allocation plans (2024: 367,108 EU-emission certificates and 23,167 UK-emission certificates).
Emission certificates are capitalized at fair value at the time of allocation and reported under other current non-financial assets (see note 25). The difference between the fair value and the purchase price paid by the company for the emission certificates is recognized under government grants. At the end of each reporting period, a provision is recognized for the certificates used up to that date. The amount of the provision is based on the recognized asset value of the certificates if they are covered by certificates held by the company at this reporting date. If the certificates used exceed the certificates held, the provision is based on the fair value of the certificates (to be purchased subsequently) as at the relevant reporting date. Future laws and commitments on emissions, especially in the countries of the Lenzing Group’s production sites, could lead to further precautionary measures in the future.
In the 2025 financial year, 600,000 EU emission certificates were sold (2024: 0 EU emission certificates), which had been allocated to the Lenzing Group free of charge. The income from the sale in the 2025 financial year amounted to EUR 45,147 thousand and is included in other operating income (see note 7).
In the 2025 financial year expenses for emission certificates amounted to EUR 24,193 thousand (2024: EUR 2,037 thousand).