Energy State Aid

This important new work offers a comprehensive and compelling account of State aid law and policy and its application to the energy sector. Clearly structured and offering meticulous detail and robust analysis, it is required reading for all practitioners in the field. The volume explores general questions from the definition of State aid to its application in Member States by national courts. It also examines questions of procedure, questions of compatibility, and State aid and the EEA. It is an invaluable tool for lawyers, policymakers and tax professionals specialising in State aid law and energy law, written by a team of leading practitioners and academics in the field.

Introduction - The Law and Economics of EU State Aid Control /Vincent Verouden and Philipp Werner --Advantage /Giuseppe Conte and James Kavanagh --State Measure /Rein Wesseling and Marieke Bredenoord-Spoek --Selectivity /Michael Honoré --Distortion of Competition and Effect on Trade /Jacques Derenne and Vincent Verouden --Compatibility of Aid - General Introduction /Leigh Hancher and Phedon Nicolaides --General Block Exemption Regulation /Koert van Buiren and Alexander Rose --Ex Post Evaluation of Aid /Xavier Boutin and Inkalotta Nuotio-Osazee --Research, Development and Innovation Aid /Pascal Belmin and Hans Zenger --Regional Aid /Hans W. Friederiszick and Massimo Merola --Risk Finance Aid /Isabel Taylor and Albert Bravo-Biosca --Rescue and Restructuring Aid /Ulrich Soltész and Bruce Lyons --Services of General Economic Interest /Philipp Werner and Vincent Verouden --Infrastructure Aid /Penelope Papandropoulos and Elisabetta Righini --State Aid in the Broadband Sector /Hein Hobbelen and Oliver Stehmann --State Aid in the Postal Services Sector /Alessandra Fratini and Khaled Diaw --Transport Aid /Udo Woll and Andrew Meaney --Energy and Environmental Aid /Kai Struckmann and Geza Sapi --Aid to Broadcasting, Culture and Sport /Christine Gerlach and Dimitrios Pikios --Aid in the Banking Sector /Stan Maes and Stephen Mavroghenis --State Aid and Privatisation /Andreas von Bonin and Elisabeth Häringer.

Europe’s energy State aid guidelines no longer reflect the market reality and need to be carefully revised. This study looks at the existing rules and provides recommendations for the revised guidelines to effectively contribute to accelerating the decarbonisation of Europe’s economy. It calls on the European Commission to pursue a combined approach that looks at reinforcing both common objectives and specific State aid measures. Since the approval of the latest Guidelines for State Aid for Energy and Environmental Protection (EEAG) in 2014, the EU institutions have agreed to accelerate the decarbonisation process to reach a climate-neutral economy by 2050. This strong impetus heavily influences the energy market where we see new economic models and types of actors emerging, and where there has been significant technological progress over the past years. The energy and environmental protection State aid guidelines no longer reflect the market’s reality and need to be revised carefully. As Brussels is about to kick off the revision of the EEAG, this report provides recommendations for new rules that effectively contribute to fast-tracking the transition towards low carbon energy systems in a cost-efficient way. Above all, Brussels should align the new rules with its 2030 climate and energy transition targets. “The EEAG reform should combine approaches that look both at common objectives and specific aid measures. This requires a significant evolution of the current regime whilst ensuring smooth continuity. Defining clear criteria to assess the contribution of a specific State aid measure to the ‘common interest’ is of utmost importance. The revised EEAG should strengthen these assessment criteria, including for specific aid measures. They must promote technology neutrality and consider the energy system’s resilience. Among the assessment criteria, the application of the proportionality test should be improved.” - Catherine Banet, author of the report The Guidelines are part of a bigger ecosystem of rules. The EEAG work in close interaction with the general block exemption Regulation (GBER) which allows the Commission to exempt prior State aid notification – and approval – in specific cases. This has proven to be efficient and should be maintained. If, during the review, a different approach is chosen, it may impact the entire architecture of the hard and soft law ecosystem of the EU state aid regime. The Clean Energy Package for All Europeans is a driver of the reflection behind the revision of the Guidelines. The scope of application of the EEAG should reflect and build upon the provisions laid down in this package. At the same time, the new Guidelines have the challenging task of anticipating the impacts of moving climate targets from the European Green Deal and the upcoming rules to achieve them, such as the revised renewable energy directive, the revised alternative fuels infrastructure directive, the implementation of the sector integration strategy and the Hydrogen strategy. Finally, enforcing the rules is just as important as setting the right rules. The report notes that, on several occasions in its recent case law, the Court of Justice of the EU has reversed some of the European Commission’s approval decisions, with major impacts on markets. The revised Guidelines should be set and applied so as to eliminate the risk of reversals of the Commission’s decisions as much as possible. “The COVID-19 crisis is just one example of the deep uncertainties and changes our society is going through. Europe should be prepared for more disruption. We need to build a more resilient energy system that can cope with such unexpected external shocks. The energy state aid Guidelines should be an integral part of a long term sustainable recovery roadmap.” - Catherine Banet, author of the report.

The book analyses how State aid law and the law of the free movement of goods apply to renewable energy support schemes, how they have impacted on the design and implementation of national support schemes, and how they have been instrumentalised to affect national renewable energy support policies. Legal theory and practice have not given a methodical answer to the following questions: when do renewable energy support schemes constitute State aid? When are they compatible with the internal market? When do they pose fiscal or non-fiscal trade barriers? And are such trade barriers justifiable? This book answers such questions from a theoretical and a practice-oriented point of view, and aspires to elucidate how EU primary law should apply to support schemes. It critically analyses case law, and it interprets and examines the practical application of primary EU law, secondary State aid legislation, as well as soft law State aid Guidelines. This book will be of interest to practitioners, judges, academics, and students and policy makers that are interested in scrutinising the legality of renewable energy support schemes within the EU legal order.

The objectives of deepening the single energy market, respecting member-state competence over the energy mix and protecting the climate can conflict. Where they do, European institutions should give priority to decarbonisation. Member-states and EU institutions should concentrate on implementing the Commission's new state aid guidelines for energy and the environment, rather than trying to improve them further. Regulatory stability would facilitate the investment needed to decarbonise Europe's energy system. The Commission should stop trying to force member-states to subsidise renewable energy projects outside their borders, and member-states should accept the Commission's decision to approve the UK's state aid application for nuclear power.

"The book analyses how State aid law and the law of the free movement of goods apply to renewable energy support schemes, how they have impacted on the design and implementation of national support schemes, and how they have been instrumentalised to affect national renewable energy support policies. Legal theory and practice have not given a methodical answer to the following questions: when do renewable energy support schemes constitute State aid? When are they compatible with the internal market? When do they pose fiscal or non-fiscal trade barriers? And are such trade barriers justifiable? This book answers such questions from a theoretical and a practice-oriented point of view, and aspires to elucidate how EU primary law should apply to support schemes. It critically analyses case law, and it interprets and examines the practical application of primary EU law, secondary State aid legislation, as well as soft law State aid Guidelines. This book will be of interest to practitioners, judges, academics, and students and policy makers that are interested in scrutinising the legality of renewable energy support schemes within the EU legal order"--

Investments in energy infrastructure are one of the key energy policy priorities of the European Union. However, due to inherent high costs, these investments cannot be made without the Member States' support, notably in the form of State aid. This implies notifying the State aid to the European Commission for a prior assessment. Yet, the approach of the European Commission to such State aid has significantly changed over the past years: the introduction of a more refined economic approach to State aid analysis and the gradual withdrawal of State from infrastructure funding have modified the traditional approach that virtually ignored the question of State aid to infrastructure. Moreover, the assessment of energy infrastructural projects depends greatly on how Member States use State aid to balance different energy policy objectives, such as competitiveness, environmental protection, and security of supply. This paper endeavors to elucidate the interplay between these energy policy objectives involved in State funding of energy infrastructure, and in particular how they influence the final decision making.

This book provides a comprehensive practitioner guide to the EU law of State aid, covering all relevant legislation, case law, and the dominant themes shaping EU State aid policy. It discusses the concept of State aid and its development in the European Union, as well as practical aspects such as procedures for notification to the European Commission, and enforcement in the European Court and national courts. It offers extensive coverage of specific sectors, including transport and shipbuilding, media and communications, energy and environmental protection, culture and heritage, and agriculture. The third edition is fully updated to cover the extensive legislative changes in this area, including the new General Block Exemption Regulation and De Minimis Regulation, horizontal aid guidelines, and sectoral guidelines for aviation, cinemas, agriculture, and fisheries; as well as State aid cases in the national courts, particularly the UK, and recent European Court jurisprudence. Accessible to competition lawyers and non-specialists, the book's clarity and concision make it an invaluable reference to this area of law.