On Tuesday 23 May, the European Commission decided that two cases of state aid, in Italy and Germany respectively, consisting of a tax reduction aiming to support co-generation, were compatible with EU state aid rules.
Germany and Italy planned to reduce tax by a maximum of 85% with the aim of supporting co-generation (Germany and Italy) and renewable energies (Italy) for energy-intensive companies faced with international competition.
Under the 2014 guidelines on state aid in favour of environmental protection and energy, some reductions can be granted, to a certain extent, to industries and companies on tax used to finance support schemes for renewable energies. This is especially a question of supporting the renewables industry, while ensuring the international competitiveness of energy-intensive companies.
While these guidelines do not apply especially to tax cuts used to finance support schemes for co-generation, the Commission noted many similarities between the aid schemes for co-generation and renewables. This was the case both on the structure and objective of the tax cut, and on the objective of the reductions. It consequently decided that this reduction could be applied to taxes aimed at supporting co-generation.
The Commission considered that the two measures helped achieve the EU climate and energy objectives, ensuring the international competitiveness of energy-intensive companies and not unduly distorting competition within the single market. It therefore concluded that these two cases of state aid were compatible with the EU rules on state aid. (Original version in French Lucas Tripoteau)