Short Reads

General Court confirmed that German law on renewable energy amounts to State aid

General Court confirmed that German law on renewable energy amounts to State aid

General Court confirmed that German law on renewable energy amounts to State aid

02.06.2016

On 10 May 2016, the General Court ("GC") dismissed Germany's appeal against the decision of the European Commission concerning the German law on renewable energy, which came into effect in 2012 ("EEG 2012"). Germany disputed the Commission's finding that the EEG 2012 amounted to State aid despite the fact that the Commission largely approved the aid.

The proceedings started after the German Association of Energy Consumers lodged a complaint with the Commission about the EEG 2012. The EEG 2012 aims to increase the development of renewable energy by laying down a scheme to support undertakings that produce such energy. These undertakings receive a price from network operators for the renewable electricity which is higher than the market price ("first beneficiaries"). In order to finance this measure the suppliers of the renewable energy have to pay an "EEG surcharge" to the network operators responsible for its collection and administration. In practice, the costs of this surcharge are passed on by the suppliers to the final consumers in the form of a higher price for the transferred energy. The scheme stipulates that the amount of the EEG surcharge that may be passed on by electricity suppliers to final consumers is subject to a cap when it concerns 'electricity-intensive undertakings in the manufacturing sector' ("second beneficiaries"). The cap serves to reduce the energy costs of these undertakings so as to maintain their international competitiveness.

The Commission decided in 2014 that the aid to the first beneficiaries constituted State aid which was compatible with the internal market. However, the Commission decided that the State aid to the second beneficiaries was considered only partially compatible with the internal market. The other part of the aid therefore had to be recovered by Germany. Germany appealed this decision, arguing that the entire scheme provided for by EEG 2012 does not amount to State aid.

The GC dismissed the appeal. First of all, it held that the funds generated by the EEG surcharge qualify as State resources because the State controls the way in which the network operators collect and administer the funds. In the otherwise comparable PreussenElektra case, the funds were transferred directly from private parties to the producers of renewable energy, i.e. without the involvement of a State-controlled intermediary. In that case the measures did not qualify as State aid. Secondly, the GC rejected the argument that the second beneficiaries did not receive an advantage but were rather compensated for a competitive disadvantage due to the fact that energy charges are lower in other countries of the European Union. It pointed out that attempts to mitigate the differences in economic conditions with other Member States do not deprive a measure of its character as State aid.

In conclusion, this judgement illustrates (i) that competitive disadvantages in comparison to undertakings in other Member States do not prevent a measure from being regarded as State aid and (ii) that the way in which a scheme is shaped is important. In particular, schemes which bring funds under State control will generally be regarded as State aid.

This article was published in the Competition Law Newsletter of June 2016. Other articles in this newsletter:

  1. General Court rejects Trioplast's action for annulment of a Commission notice to pay interest
  2. Commission blocked Hutchison's proposed acquisition of Telefónica UK
  3. European Commission publishes guidance on the notion of State aid
  4. District Court of Rotterdam upheld the ACM's unconditional clearance decision in telecoms merger KPN/Reggefiber
  5. Rotterdam District Court considered "franchise agreements" in breach of competition law in launderette cartel case
  6. UK High Court held that territorial limits apply to EU cartel damages claims

Team

Related news

02.04.2020 NL law
ACM played high stakes and lost: no more fixed network access regulation

Short Reads - The ACM’s failure to meet the requisite standard of proof has led to the fixed networks of Dutch telecom providers KPN and VodafoneZiggo being free from access regulation. The Dutch Trade and Industry Appeals Tribunal ruled that the ACM had failed to demonstrate the existence of collective dominance, and that KPN and VodafoneZiggo would tacitly coordinate their behaviour absent regulation.

Read more

26.03.2020 BE law
​I am suffering significant financial losses as a result of the spread of the corona virus. Is there a possibility of State aid?

Short Reads - COVID-19 brings certain questions to centre stage regarding State aid. In this short read, Peter Wytinck, Sophie Van Besien and Michèle de Clerck discuss the possibility of State aid in case of significant financial losses as a result of the spread of the corona virus.

Read more

02.04.2020 NL law
Claims assigned to a litigation vehicle: who needs to prove what?

Short Reads - Two recent decisions from the Amsterdam Court of Appeal have confirmed that litigation vehicles cannot come empty-handed to the court, and should provide documentation regarding the assignments of claims they submit. The Dutch legal system allows companies and individuals to assign their claims to a “litigation vehicle” or “claims vehicle” that bundles those claims into a single action. In its decisions of 10 March 2020, the Court of Appeal ruled that it is up to litigation vehicles to prove that the assignments can be invoked against the debtor. 

Read more

10.03.2020 NL law
De AVG staat niet in de weg aan de verwerking van persoonsgegevens door een toezichthouder tijdens een bedrijfsbezoek

Short Reads - Bedrijven die met toezicht worden geconfronteerd, zijn gehouden op verzoek van een toezichthouder in beginsel alle informatie te verstrekken. Met de komst van de Algemene verordening gegevensbescherming (AVG) is in de praktijk de vraag opgekomen of een toezichthouder bevoegd is om persoonsgegevens die onderdeel uitmaken van de gevraagde informatie te verwerken.

Read more

02.04.2020 NL law
EU competition policy agenda: full to the brim

Short Reads - The European Commission’s competition policy agenda stretches to 2024 and contains plans for many new or revised rules and guidelines. Recent publications, such as the New Industrial Strategy for Europe, shed more light on the Commission’s initiatives and their possible impact on parties from both inside and outside the European Union (EU). These new initiatives include temporary state aid rules to address the effects of the Corona crisis, consultations on the Block Exemption Regulations, and new measures in respect of (primarily) third-country companies.

Read more

05.03.2020 NL law
CBb confirms: no cartel fine, still interest to appeal cartel decision

Short Reads - Companies can challenge a decision establishing that they committed a competition law violation, even if no fine was imposed on them. The CBb – the highest court for public enforcement of cartel cases – recently confirmed that the absence of a fine does not affect a company’s interest to appeal. Consequently, parent companies held liable for a subsidiary’s cartel infringement can still challenge a cartel decision, irrespective of whether fines were imposed on them separately.

Read more

This website uses cookies. Some of these cookies are essential for the technical functioning of our website and you cannot disable these cookies if you want to read our website. We also use functional cookies to ensure the website functions properly and analytical cookies to personalise content and to analyse our traffic. You can either accept or refuse these functional and analytical cookies.

Privacy – en cookieverklaring