EU State aid: Guidelines on State aid for environmental protection and energy 2014-2020 - “making of” - NHO Seminar Oslo, 5 November 2014 Guido Lobrano, Senior Legal Adviser
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EU State aid: Guidelines on State aid for environmental
protection and energy 2014-2020
- “making of” -
NHO Seminar
Oslo, 5 November 2014
Guido Lobrano, Senior Legal Adviser
2
• What is BUSINESSEUROPE?
• State aid policy
• Energy and Environment aid Guidelines (EEAG)
• Conclusions
Summary
3
BUSINESSEUROPE: 41 members in 35 countries
Serbia
Belgium Cyprus Czech
Republic
Denmark
Finland France Germany Germany Greece
Iceland Ireland Italy Luxembourg Malta
Norway Poland Portugal Portugal
Spain Sweden Switzerland Switzerland The
Netherlands Turkey
Estonia Hungary
Lithuania
Rep.
San Marino Romania
Croatia
Slovenia
Slovakia
Turkey
Latvia
Austria Bulgaria Denmark
United Kigdom
Iceland
Montenegro
Members and structure
4
Advisory and Support Group (ASG)
5
6
What issues does BUSINESSEUROPE deal with?
INDUSTRIAL
AFFAIRS ECONOMICS
SOCIAL
AFFAIRS
INTERNAL
MARKET
ENTREPRENEURSHIP
& SMEs
LEGAL
AFFAIRS
INTERNATIONAL
AFFAIRS
EU State aid policy
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State aid overview
State aid = an advantage in any form whatsoever
conferred on a selective basis to undertakings by
national public authorities
(subsidies granted to individuals or general policy measures open to all enterprises are not covered by Art. 107 EC they are not State aid )
GENERAL PROHIBITION of STATE AID
Exceptions = aid is/can be considered compatible, if instrumental for achieving a specific policy objective
9
State aid control – overview
Policy objectives
Allowing MS to fund certain economic activities
Correcting imbalances and market failures where needed
Monitor, assess and fairly grant
State aid
Effect (potential)
on competition and trade
Transfer of State
resources (incl. local authorities,
SOEs)
Economic advantage (otherwise
not receivable)
Selectivity (no general measure, discretion)
Features of State aid
Different forms (effect of measure!)
What makes a measure compatible?
• aimed at an objective of common interest;
• aid can bring about an improvement that market cannot deliver itself (e.g.
remedying a market failure or addressing equity or cohesion concern);
• appropriate instrument to address objective of common interest;
• must incentivise the business to engage in additional activity that it would
not carry out without aid, or would carry out in different manner or location;
• amount must be limited to the minimum needed to induce the additional
investment or activity;
• negative effects on competition and trade sufficiently limited;
• relevant acts and pertinent information about aid awards must be
transparent (public).
NO state aid granted without Commission agreement
General Block Exemption Regulation (GBER)
Notification
Guidelines
EEAG
State aid enforcement
The Environment and Energy Aid
Guidelines
(EEAG)
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Renewable energy (RES)
Energy infrastructure
Generation adequacy
Exemptions from taxes and levies
Main issues covered by EEAG
Main industry concerns
National CO2 reduction programmes
• Costs for Eur. Business
• Competition distortions
Cumulative impact of EU and national
measures
Legal uncertainty – e.g. links with
tax rules
Key business demands
• clarify State aid rules for energy
• ensure European global competitiveness
• minimise competition distortions within Europe
• offset CO2-reduction cost for energy intensive sectors
• increase efficiency in renewables promotion
• coordination of national schemes
Main changes compared to 2008 guidelines
more market friendly support for energy from renewable sources (RES)
energy infrastructure (cross border + less developed regions)
criteria to assess generation adequacy measures
Allow reductions in charges for financing RES support measures for energy intensive users
Specific critical aspects
Tax reductions – inconsistency
Aid intensities – cumulative impact
Market exposure – deployed vs. less deployed technology
Capacity mechanisms
Renewable Energy Source (RES) charges
charges on energy suppliers
pass on costs to energy
consumers
burden on energy-intensive
sectors
Non-competitive EU
industries!
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RES - Market fragmentation
Support to electricity from RES in Europe in € mn and per unit of energy consumed
RES support criteria
1) electro-intensity:
How much costs are
affected by increase
in electricity prices
2) trade intensity:
Total trade with third
countries relative to
size of EU market
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Reductions in RES charges to certain sectors
Combined criteria:
RES - eligible beneficiaries
68
sectors
having:
Trade intensity above
4%
10%
80%
Electro-intensity above
20%
10%
7%
Transitional rules for existing schemes
Entry into force 1 July
2014
Adjustment plan by 1 July 2016
Alignment with EEAG by
1 January 2019
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