Consultation on state aid guidelines for environmental and energy projects 2014-2020 launched

​Gusty Graas

​The Committee of the Regions (CoR) has called on local and regional authorities to take part in the European Commission's consultation on guidelines for state aid environmental and energy 2014-2020. The Commission seeks to broaden the scope of potentially eligible aid whilst simplifying procedures. The Commission's draft guidelines suggest more rigorous rules for competition in the EU's energy market helping the drive towards a low-carbon economy. Member of the Municipal Council of Bettembourg and of the Luxembourg national parliament, Gusty Graas (LU/ALDE), is also currently drafting a CoR opinion on the topic which will be presented at the CoRs' ENVE Commission on 12 February before being presented for adoption at the CoR plenary on 2-3 April later this year.

Decarbonising Europe's energy supply?

The Commission hopes the guidelines will support the decarbonisation of Europe's energy supply and integrate the EU's internal energy market. With renewable energy growing and costs falling, state aid should promote a more market friendly support for renewables by offering market premiums (providing producers with a supplement on top of wholesale prices) or certificate schemes (establishing a market for tradable certificates between producers and suppliers of renewable energy).

Reducing burden on energy intensive users?

In many Member States financing renewable support measures has led to increasing electricity costs affecting competitiveness of energy intensive users and some have also claimed risks leading to carbon leakage due to the relocation of production outside the EU. The draft guidelines could moreover avoid subsidy races between Member States.

Rules for assessing infrastructure support?

A modern infrastructure is crucial for an integrated energy market and achieving the EU's climate and energy targets. For the first time the guidelines include rules for assessing infrastructure support. Infrastructure aid should be focused on projects improving cross-border energy flows and promoting infrastructure in Europe's less developed regions. While the Commission acknowledges in principle eligibility of local and regional infrastructure at the level of distribution networks, it does not seem such a high priority as cross-border infrastructure.

State Aid rules to secure generation adequacy?

The draft guidelines also include rules on state aid to secure generation adequacy. Some EU countries plan to introduce "capacity mechanisms" encouraging producers to build new generation capacity or prevent them from shutting down existing plants. Such support would be allowed only if additional energy infrastructure or alternative measures - such as more responsive demand side or electricity storage - cannot address concerns about a sufficient flexible generation capacity. However, aid should not favour national generation or particular technologies, in order to limit the risks of strong distortions of competition and environmental harm.

Simplified framework?

The new rules would also contribute to the modernisation of state aid control by providing a simpler and more consistent framework for the assessment of state aid measures.

Certain categories exempt from aid?

The Commission proposes exempting certain categories of aid from prior scrutiny under state aid rules by including them in the General Block Exemption Regulation. This would include public support to clean up or remediate contaminated sites, offer aid to promote district heating and public loans to improve the energy efficiency in buildings.

CoR rapporteur Mr Graas invites all local and regional authorities who submit comments to the consultation to share their views with him by sending one paragraph summarising your position to with 'State Aid' as the subject.

Next steps

  • 12 February: Gusty Graas (LU/ALDE) (LU/ALDE) to present draft opinion at the ENVE Commission
  • 14 February: European Commission consultation deadline
  • 2/3 April: Gusty Graas (LU/ALDE) to present his opinion at the CoRs' plenary session