Brussels, 01/07/2014 (Agence Europe) - On Tuesday 1 July, the Court of Justice of the EU ruled (case C-573/12) that the Swedish regime which supports the production of green electricity in the national territory is compatible with EU law, although it constitutes a restriction to the free movement of goods by favouring national production and hindering imports of electricity from other member states. In so doing, the Court takes the view that the objective of general interest consisting of promoting the use of renewable energy sources pursued by the Swedish regime justifies this type of restriction.
The Swedish aid regime allows electricity certificates to be granted to green electricity production plants on the national territory, which can then be sold to suppliers or to certain users, which must, on pain of penalties, hold a quota of certificates which corresponds to a proportion of the total of their electricity supplies or consumption. This sale also brings in revenue for the producers, on top of the income from selling green electricity. The excess costs linked to the production of green electricity, which is more expensive to produce than electricity from non-renewable sources, are borne by the suppliers and consumers.
The company Alands Vindkraft, which was denied green certificates by the Swedish authorities for its windfarm in Finland on the grounds that only installations located in Sweden could benefit from these certificates, appealed against this refusal on the grounds of the principle of freedom of movement. It argued that the Swedish regime has allowed producers of green electricity located in Sweden to gain 18% of the market, to the detriment of imports from other member states. The court hearing the action, the Administrative Court of Linkôping (Sweden)), asked the Court whether the Swedish regime was compatible with European law.
In its ruling, the Court concluded that it is.
According to its findings, this regime complies with the directive on the promotion of the use of green energy (2009/28/EC), which allows the member states to use aid to support the production of green electricity on their territory and does not oblige them to extend the benefit of any national aid regimes to green energy produced in other member states. However, the regime does restrict the free movement of goods as: - suppliers and users are obliged to buy certificates corresponding to the amount of electricity they import if they wish to avoid having to pay a specific duty; - the possibility afforded to local producers to sell certificates as well as the green electricity they produce gives them an advantage with their clients over importers, which do not have this option.
However, the European judges conclude that this restriction is justified by the objective of general interest pursued by the Swedish regime: that of promoting the use of renewable energy sources in order to protect the environment and fight climate change. Here, the Court recognises that, in order to achieve this objective and ensure a transition to green energy, it is justified for measures to target the production stage rather than the consumption stage and that, as European legislation currently stands, Sweden was legitimately able to limit the benefit of national aid to national production of green electricity alone, in order to promote investment in this type of energy, for example. Under these conditions, it concludes that the Swedish regime is compatible with the principle of the freedom of movement of goods.
Greens at EP welcome Court verdict
The Greens/EFA Group at the European Parliament welcomed this verdict, which they hope will send out a “warning” to the European Commission, which, they say, is trying to bully the German government into “exempting imported electricity from contributing to the support of renewable energy”.
Antoine Colombani, the spokesperson to Competition Commissioner Joaquin Almunia, observed that this ruling “has fairly important consequences”. However, he stressed that the verdict is limited to matters dealing with the free movement of goods. He added that the European Commission will examine the potential consequences of this ruling in terms of the treatment of state aid in relation to cases underway (alluding to the case referred to by the Greens). (FG)