Following an in-depth investigation the European Commission has concluded that aid granted for the production of energy from renewable energy sources under the German Renewable Energy Act of 2012 (Erneuerbare-Energien-Gesetz – "EEG") was in line with EU state aid rules. The Commission has also approved the majority of reductions granted to energy-intensive companies on a surcharge to finance the support for renewables. This surcharge was imposed on electricity suppliers and passed on to end consumers (EEG-surcharge). However, a limited portion of the reductions exceeded what is permitted under EU state aid rules. The beneficiaries now have to pay this excess back to remedy the distortion of competition. The recovery only concerns 2013 and 2014.
Commissioner Margrethe Vestager, in charge of competition policy, said: "I want to strike a balance between several needs: to promote renewable energy and ensure its stable financing. At the same time we need to make sure that contribution by SMEs and consumers is fair, and that we protect the competitiveness of European industry. Today's decision achieves this."
Following complaints from consumers, the Commission opened an in-depth investigation in December 2013 to examine whether the support for renewable energy and the surcharge reductions granted to energy-intensive companies in 2013 and 2014 gave those companies an undue economic advantage over their competitors, in breach of EU state aid rules. Germany had not notified the EEG-Act 2012 to the Commission for prior state aid scrutiny because it considered that it did not involve state aid.
Today's decision reached the following main conclusions:
- The EEG 2012 involves state aid. Germany has introduced a specific state resource, the EEG-surcharge, to support electricity production from renewable sources. It has set the rules under which private operators collect and administer the surcharge. By granting reductions to energy-intensive companies, the State has also decided who should pay that surcharge and, in particular, which consumers should pay less than others. Finally, public authorities are involved in the monitoring of the system and in the approval of the surcharge reductions.
- The Commission confirmed that the support to renewable energy production under the EEG 2012 was in line with the Commission's 2008 environmental aid guidelines, notably because it was limited to compensating the extra costs of renewable energy production that exceeded the market price for electricity. The support consisted in particular of feed-in tariffs and premia for renewable electricity producers.
- The surcharge reductions for energy-intensive companies under the EEG 2012 were for the major part compatible with the new Environmental and Energy Aid Guidelines, which are applicable since 1 July 2014. The guidelines provide a framework to grant energy-intensive companies reductions from the funding of support for renewable energy. Under the guidelines, Member States can apply such reductions to EU energy intensive sectors particularly exposed to international competition.
The 2014 guidelines also apply to non-notified reductions granted before the 1 July 2014. In order to ensure a smooth transition for the companies concerned, Member States are required to submit an adjustment plan to progressively bring non-notified reductions in line with the criteria of the 2014 guidelines. The Commission has assessed and approved the adjustment plan proposed by Germany for the reductions on the EEG-surcharge applied in 2013 and 2014 on the basis of the 2014 guidelines. However, the actual reductions granted to some energy-intensive users exceeded the levels set under the adjustment plan. This additional reduction gave the beneficiary companies an undue advantage over their competitorsin breach of EU state aid rules and now has to be paid back.
- Finally, Germany has committed to invest €50 million in interconnectors and European energy projects, in order to remedy any risk that the measure discriminated against imported electricity, which is also subject to the surcharge. Articles 30 and 110 of the Treaty on the Functioning of the European Union (TFEU) prevent Member States from imposing charges or taxes that discriminate against imports. On the basis of Germany’s commitment, the Commission concluded that this would remedy any discrimination which importers may have suffered in the past from the EEG 2012.
The German EEG 2012 provided for support to electricity production from renewable energy sources and mine gas. It applied between 1 January 2012 and 31 July 2014. The support was financed by a surcharge paid by electricity suppliers and passed on to end consumers through their electricity bill. Energy-intensive industries were granted reductions on the EEG-surcharge they had to pay to the suppliers.
Today's decision concludes an in-depth investigation into the EEG-Act 2012 launched on 18 December 2013. The decision does not concern the reductions of the EEG-surcharge granted through the EEG 2014 for 2015. These were already approved by the Commission in July 2014.
The EEG 2014 provides support for the production of electricity from renewable energy sources and from mine gas and is applicable as of 1 August 2014. It also reduces the financial burden on energy-intensive users and certain auto-generators by reducing their EEG-surcharge. The Commission today also approved the EEG 2014 for the railway sector.
The non-confidential version of today's decision will be made available under case number SA.33995 in the State Aid Register on the competition website once any confidentiality issues have been resolved. The electronic newsletter State Aid Weekly e-News lists the most recent decisions on state aid published in the Official Journal and on the website.