The European Commission decisions on German support schemes in favour of energy-intensive industries

18-7-2013 — /europawire.eu/ — The European Commission has adopted two separate decisions on German support schemes in favour of energy-intensive industries. Firstly, the Commission has concluded that a scheme compensating energy-intensive users for CO2 costs in their electricity price as of January 2013 is in line with EU state aid rules, in particular because it maintains incentives for the beneficiaries to further reduce their CO2 emissions. In contrast, the Commission found that a 2009 scheme supporting non-ferrous metal producers was incompatible with the internal market, in particular because it would have entailed serious distortions of competition to the detriment of producers in other Member States.

Since the beginning of 2013, the EU has a common framework on how to relieve energy-intensive industries of CO2 costs in their electricity price (the “ETS guidelines”, see IP/12/498). It can help them to compete in the world market and prevent carbon leakage while avoiding unilateral actions by individual Member States distorting competition.

2013 ETS scheme
In 2013, Germany notified a scheme aimed at compensating energy-intensive users for additional CO2 costs deriving from changes to the EU Emissions Trading Scheme (ETS) (case SA.36103). The Commission’s investigation found that the scheme, in applying the harmonised methodology of the ETS guidelines, would effectively prevent carbon leakage while keeping competition distortions to a minimum. Since the aid will progressively be reduced, the scheme ensures that the beneficiaries have an incentive to further reduce emissions.

2009 non-ferrous metals scheme
In 2009, Germany had notified a €40 million scheme aimed at compensating non-ferrous metal producers (aluminium, copper and zinc) for alleged ETS-related costs (case SA.30068). After an in-depth investigation  (see IP/10/1520), the Commission has concluded that the scheme would favour very selectively only eleven German beneficiaries to the detriment of competitors in the internal market. Moreover, Germany did not demonstrate that at the time there was indeed a risk of carbon leakage. The scheme is therefore incompatible with the internal market and cannot be implemented.

Background

In May 2012, the Commission adopted guidelines on how Member States can support industry in the context of the Emissions Trading Scheme (ETS) (the “ETS guidelines”, see IP/12/498). The guidelines allow to compensate certain industries for the higher electricity costs that are expected to result from changes to the ETS as of 2013 in order to prevent carbon leakage. Carbon leakage is the shift of CO2 emissions if European industries relocate their production to countries outside the EU where environmental regulation is less strict.

The non-confidential version of the decisions will be made available under the case numbers SA.36103 (2013 scheme) and SA.30068 (2009 scheme)in the State Aid Register on the DG Competition website once any confidentiality issues have been resolved. New publications of state aid decisions on the internet and in the Official Journal are listed in the State Aid Weekly e-News.

Contacts :
Antoine Colombani (+32 2 297 45 13 – Twitter: @ECspokesAntoine )
Marisa Gonzalez Iglesias (+32 2 295 19 25)