Brussels, 09/04/2014 (Agence Europe) - On Wednesday 9 April, EU Competition Commissioner Joaquin Almunia defended the final version of the European Commission's new guidelines for state aid for energy and the environment, which have been slammed by environmentalists, who accuse the Commission of making consumers, rather than industry, pay the price of subsidising renewable energy (see EUROPE 11056).
The Commissioner said, referring to the European Commission: “We think that the new guidelines are a good compromise for the European industry, and they also support the further market integration of renewables and the Europeanisation of renewable energy policy”. He said they were the best balance politically possible between the EU's priority objectives, which are not always consistent with each other. He said it had taken two years of work to fine-tune the guidelines with the help of more than 5,000 contributions from various stakeholders
Incorporating renewables into the market. The guidelines have been adjusted to take account of changes in the energy market. Almunia said that heavy subsidies for renewables had helped them make important progress, but were now setting up an uneven playing field because they account for a bigger share of the market. The new guidelines will ensure a smooth transition, he said, to public aid that is granted on a competitive basis. In 2015 and 2016, countries will be able to test out aid through the use of calls for tender for some of the planned energy capacity and then, from 2017 onwards, aid will gradually be granted through a bidding process for all new sites. Almunia said the rules were flexible and member states have the option of deciding to move away from the recommended measures to support technology that is still at an early stage.
Protecting European industry's competitiveness. Countries will be able to grant partial exemptions for the financing of renewables for high energy-using companies or those highly exposed to global competition in 68 sectors, such as paper production, chemicals and ceramics. A number of conditions are set for eligibility, based on energy consumption or exposure to international trade.
MEP Claude Turmes (Greens/EFA, Luxembourg) criticised the decision: “Instead of ensuring 'polluters pay', this new approach will ensure those that pollute the most are rewarded”. The Greens point out that the “Commission's own legal services advised in July last year explicitly against the introduction of operating aid in form of exemptions to energy intensive users. Without asking anything in return from beneficiaries this would distort competition and be incompatible with internal market rules as shown by previous court cases at the EU Court of Justice. Under the ETS, the carbon leakage list does allow for exemption schemes, however only in return of improvements in terms of energy performance through benchmarks etc.” The Commission privately recognises that some of the costs of energy transition may end up being borne by the consumer, but this was not a “rule” and the member states are, at the end of the day, responsible for the exemptions they decide to grant.
The exemptions will apply retroactively for the past three years so current investigations will be carried out in line with the new rules. This will apply to Germany, which is planning exemptions not covered by the current rules (the new rules come into force on 1 July 2014). Almunia said the new guidelines' criteria would be used for deciding whether the German exemptions are valid and German companies will have to pay back any share of profits generated that is not compatible with the new guidelines. He said the criticism that the guidelines had been made to measure to suit Germany were “completely wrong”.
Nuclear energy not covered by new rules. The Commission has given upon the plan to include nuclear energy in the guidelines, as it had initially suggested in July (see EUROPE 10892). This has been welcomed by Greenpeace as a “serious blow” to the United Kingdom, which it said put pressure on the Commission to have nuclear power included in the guidelines.
Commissioners divided over new guidelines. Almunia said that three European commissioners had abstained or voted against the new guidelines, but he refused to name names. Internal Market Commissioner Michel Barnier refuses to say whether he voted for or against. Energy Commissioner Günther Oettinger's circles say it is a good compromise for European industry and the guidelines support integration of renewables in the market and Europeanisation of the renewable energy policy. On Wednesday, EU ProSun, an umbrella group of European solar energy companies, criticised the EU green energy restrictions in the new guidelines. (EL)