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07/12/2016

Berlin sues European Commission in dispute over renewables law

Energy

Berlin sues European Commission in dispute over renewables law

windkraft_eeg_beihilfe_verfahren_eugh.jpg

[Martin Schachermayer/Flickr]

The German government is challenging the European Commission before the European Court of Justice (ECJ) in the hopes of achieving clarity once and for all over Germany’s 2012 Renewable Energies Act (EEG), which Brussels still considers to be state aid. EurActiv Germany reports.

The ongoing conflict between Berlin and Brussels over Germany’s Renewable Energies Act (EEG) will soon move to the European Court of Justice. Berlin has issued a complaint against the European Commission, a spokeswoman for the German Economic Affairs Ministry told EurActiv.de.

The complaint is intended to clear up “the fundamental legal question” over whether the EEG should be categorised as state aid, she said.

For years, Germany and the European Commission have been at odds over precisely this question. Brussels repeatedly criticised the green energy rebate system, which largely exempts energy-intensive industries from paying the EEG’s surcharge.

The dispute was generally settled by a 25 November 2014 decision, in which the Commission approved the “majority of reductions” on the surcharge granted under the (old) 2012 EEG. But Brussels said it considered “a limited portion of the reductions exceed what is permitted under EU state aid rules”.

The German government’s complaint is specifically directed at the Commission’s decision from November. According to the ministry’s spokeswoman, however, it has nothing to do with the industry rebates. The “complaint purposely does not tackle” this issue, she commented.

The Commission decision, and thereby the complaint, deal with the “old” EEG law from 2012, the spokeswoman said, as it was applied until comprehensive reforms took effect last year (EEG 2014). The EEG 2014 was approved by the Commission.

European Commission stands by EEG criticism

Even after the complaint was submitted, Brussels held on to its appraisal. “The Commission will defend its state aid decision on the EEG 2012 in court,” said a spokesman on Tuesday (17 February) in Brussels.

“In the decision, we came to the conclusion that the EEG 2012 is connected to state aid,” he continued.

Germany introduced a surcharge within the framework of the EEG, “to promote the generation of energy from renewable energy sources with these state resources”, the spokesman indicated. Furthermore, state agencies are involved in the monitoring the system, he said.

>>Read: Brussels, Berlin bury hatchet over green energy rebates

Subsidies are generally prohibited in the EU. EU law is meant to prevent such measures creating unfair advantages opposite competing sectors in other EU countries. State aid harms competition and leads to distortions in trade, the Commission indicated.

Exceptions are possible, if they benefit the EU. But if this is not the case, it would allow Brussels to give the German government guidelines regarding the law.

From a German perspective, this would mean much legal insecurity. The German government also fundamentally contradicts the European Commission’s argumentation.

In Berlin’s view, EEG cannot be a case of state aid because the funding does not pass through the federal budget. And more importantly, German citizens themselves are calling for expansion of renewable energies via extra fees on their energy bill, the government points out.

The German Economic Affairs Ministry expects resolving the EEG’s state aid issues by the ECJ could take up to four years.

Background

In May 2013, the powerful employers’ group BusinessEurope called on European Commission President José Manuel Barroso to radically shift the EU's energy policy away from climate change mitigation towards cost-competitiveness and security of supply.

But an May 2-13 EU summit on energy, with the objective of lowering prices and boosting the Union’s industrial competitiveness, ended up without major decisions. 

As most renewable energies are still more expensive than fossil fuels, a variety of support schemes have been put in place to accelerate their uptake and meet the EU's goal of sourcing 20% of its energy from renewable sources by 2020.

Further Reading