Greens slam 'disappointing and cowardly' EU state aid rules for energy

Parliament's Greens/EFA group has condemned the commission's proposals to review EU state aid rules in the energy sector as a move to allow energy-intensive industries "off the hook".

10 Apr 2014

According to competition commissioner Joaquin Almunia, "The new rules - one of the most important pieces of the state aid modernisation strategy - will support member states in their efforts to achieve the EU's ambitious energy and climate objectives in 2020 and to ensure a high level of environmental protection."

However, Greens/EFA co-president Rebecca Harms disagreed, saying, "EU energy policy is being driven by those who want to preserve fossil fuels and nuclear power at the expense of the badly-needed transition to a sustainable energy system."

She criticised the commission for giving in to "pressure from Germany", saying, that it had "further weakened its plans to ensure that energy-intensive industries will continue to be let off the hook from contributing to the expansion of renewable energy."

"This disappointing and cowardly plan will mean that private consumers and smaller businesses will be left carrying the can for this energy transition in the short run, from which energy-intensive firms will profit in the future through lower energy market prices," the German deputy argued.

 "EU energy policy is being driven by those who want to preserve fossil fuels and nuclear power at the expense of the badly-needed transition to a sustainable energy system" Rebecca Harms MEP

"At the same time, the commission's plans would hit smaller-scale renewable energy projects by scaling-back support schemes.

"This will undermine the public support for renewable energy, which has been facilitated by decentralised renewable projects in which local communities benefit directly," she explained.

Greens group energy policy spokesman Claude Turmes also had some strong words to share on the matter, saying "This is a black day for the European commission's competition directorate.

"This review should have contributed to stopping unfair dumping practices for big, polluting industries under a German government scheme but it has ended in a decision to exonerate the entire European energy-intensive industry from the substantial costs of retasking the EU's creaking power system over the next two decades.

"Despite consuming up to 35 per cent of electricity, these sectors will get a free ride, with private consumers and small businesses left to foot the bill of the energy transition," the Luxembourgish policymaker complained.

"Together with their allies from the German, French and UK governments, commissioners Barroso, Oettinger and Almunia are totally turning the commission's competition competence on its head by allowing aid to energy-intensive industries without any contribution in return."

"Instead of ensuring 'polluters pay', this new approach will ensure those that pollute the most are rewarded," he added.

Further criticism came from environmental NGO's, with Climate action Europe's Daniel Fraile, saying, "One of the main concerns of citizens and NGOs is that support for renewable energy producers will now be allocated through a tendering procedure, which creates unfair conditions for smaller producers that are unable to engage in long administrative processes with high investment uncertainty."

"This lopsided new regime does not create the right conditions for the EU to support small business enterprises and private investors in Europe or, importantly, exploit the EU's vast potential as a world leader in renewable energy," concluded the energy policy officer.

Meanwhile, the response from industry wasn't overly positive either, as Alexandre Roesch, of the European photovoltaic industry association also criticised the proposed tendering scheme, saying that it "inevitably comes along with risks and transaction costs.

"Cooperatives and community projects, for instance, will now be forced to place their bids in a scheme much more suited to the largest energy players."

"We appreciate the aim of the guidelines that the energy intensive industry, such as steel industry should be protected from artificial increase in electricity prices due to support offered to preferred energy generation technologies" Eurofer director general Gordon Moffat

"To drive a better market integration of renewables forward, the commission should rather focus on removing existing barriers on the market, instead of forcing renewables into a market which is simply not fit for them," suggested Roesch.

Eurofer director general Gordon Moffat also waded in, saying "We appreciate the aim of the guidelines that the energy intensive industry, such as steel industry should be protected from artificial increase in electricity prices due to support offered to preferred energy generation technologies.

However, he explained, "The 15 per cent minimum contribution to national renewables subsidies will still lead to a further substantial increase in energy costs for many energy intensive companies in the EU, costs which competitors do not have to bear".

"The problem is not the exemptions for industry but the subsidies themselves. Industrial electricity prices are already today higher than in most other countries on the globe and twice as high as in the US.

"We cannot operate an industry that is producing globally traded products such as steel where you have differentials in cost that are so horrendous," he argued.

"Green policies have had the greatest impact on energy prices, especially subsidies for renewables, which have completely de-stabilised the energy markets in Europe," criticised Moffat.

"We welcome the positive attitude from the commission towards lowering the cap of the minimum payment to finance renewable energy sources" Eurometaux president Oliver Bell

But Oliver Bell, president of Eurometaux, said, "We welcome the positive attitude from the commission towards lowering the cap of the minimum payment to finance renewable energy sources.

While the organisation's director general, Guy Thiran, continued, "Our industry continues to support ambitious climate and energy policies provided that they are accompanied by effective and long-term compensation measures for related electricity and CO2 cost increases, also post 2020, in the absence of a global-level playing field.

"This is a precondition for new investments in our industry, delivering innovative low carbon products and solutions, contributing towards the transitions to modern society," he said.

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