The European Commission has approved the €1.2 billion Temporary Business Energy Support Scheme (TBESS).

Under the TBESS, which was announced in the Budget, businesses who have seen their energy bills rocket as a result of soaring wholesale prices caused by the war in Ukraine will receive aid in the form of direct grants.

Businesses that qualify will get up to 40% of the additional costs they are facing.

To qualify they must demonstrate that their average monthly unit price for either electricity or gas has increased by at least 50%, compared to the average unit price for the same month in the previous year.

The scheme will run initially until 28 February, but may be extended until 30 April at the latest.

It will be open to companies of all sizes active in all sectors that are affected by the current crisis, the only exception being credit and financial institutions.

"This €1.22 billion scheme approved today will enable Ireland to support affected sectors and companies, in particular the smaller ones, by ensuring that sufficient liquidity remains available to them," said Margrethe Vestager, Executive Vice-President in charge of competition policy.

The scheme was approved under the EU's Temporary Crisis Framework.

"The Commission concluded that the Irish scheme is necessary, appropriate and proportionate to remedy a serious disturbance in the economy of a Member State, in line with Article 107(3)(b) TFEU and the conditions set out in the Temporary Crisis Framework," it said.

To qualify under the framework, the scheme had to not exceed €250,000 per company active in the primary production of agricultural products, €300,000 per company active in the fishery and aquaculture sectors and €2 per company active in all other sectors.