Monday

30th Mar 2020

EU commissioner clashes with Germany on energy subsidies

  • Steel factories in Germany are likely to get preferential treatment (Photo: LarsAC)

Germany is on collision course with the European Commission over subsidies to energy-intensive industries which Brussels says run counter to EU goals on promoting greener sources by 2020.

In a rare move, competition commissioner Joaquin Almunia held a press conference in Berlin on Monday (17 February) after meeting German vice-chancellor and energy minister Sigmar Gabriel.

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or join as a group

He said time was pressing, as the commission on 9 April will adopt new guidelines on how it will deal with state aid in the field of energy and environment.

The rules are set to enter into force on 1 July. They will outline the criteria on which competition cases will be opened, possibly leading to fines for governments if they are found in breach of EU state aid law.

The German government, for its part, is currently seeking to update a law on renewable energy which will spell out what subsidies solar and wind energy providers will get and which industries will be exempt from having to contribute to this support.

Exemption from contributing could be considered state aid and likely be scrutinised by Brussels.

The funding of the "Energiewende" - turning to greener energy sources - is a major task for the new coalition government in Germany.

Gabriel is under pressure from the industry not to increase its costs, as well as from consumers who see their energy bills go up.

"We have a lot of things to discuss with Germany, as Germany has the strongest industries in the EU and wants to promote renewables," Almunia said.

He added that, in principle, some industries can be exempt from having to contribute to the funding of renewable energies, but stressed that it should be "a minority of industrial sectors, not the whole economy."

Energy-intensive industries have applied for exemptions to the tune of €5.1 billion for this year, with Gabriel saying it will be hard to negotiate even €1 billion less.

External factors should also play a role in allowing these exemptions, Almunia said, for instance the fact that in the US energy prices have dropped, meaning that their equivalent industries have lower production costs.

Almunia mentioned steel, aluminium and zinc industries as examples of industries which could be allowed to have this preferential treatment under EU state aid rules.

"If member states ask us for a very long list of industry sectors to be exempt, the intensity of benefits will decrease. If the list is shorter, the intensity will increase," Almunia said.

EU leaders at a summit in March are expected to discuss how to fund renewable energies without hampering their industries' competitiveness, but still offering enough incentives for consumers and factories to turn "green."

The summit was initially scheduled for February, but was postponed due to lack of agreement among member states.

EU proposes 'affordable' climate targets

The EU commission has put out new greenhouse gas targets designed not to damage its economy, while upholding its status as a world leader on climate change.

Germany gets its way on EU car emissions

EU environment ministers have caved in to German pressure and agreed to reopen a deal on capping car emissions, to the disappointment of climate change campaigners.

Warning of agricultural 'digital arms race' in EU

Europe is on the verge of allowing centralisation and concentration of farming data at an unprecedented scale, with the absence of any regulation, NGO Friends of the Earth have warned.

What will Brexit mean for climate action in EU and UK?

The UK is leaving the EU after playing a key role in climate action - just as COP26 comes to Glasgow. With so many policy negotiations ahead, a split between London and Brussels post-Brexit could undermine the 2050 emissions-neutrality goal.

Timmermans: EU climate law will 'discipline' rogue states

The first EU-wide climate law will be a "disciplining" exercise to implement the Green Deal - although the Polish climate minister Michal Kurtyka warned the EU Commission about the social cost of delivering the green transition.

What will Brexit mean for climate action in EU and UK?

The UK is leaving the EU after playing a key role in climate action - just as COP26 comes to Glasgow. With so many policy negotiations ahead, a split between London and Brussels post-Brexit could undermine the 2050 emissions-neutrality goal.

Timmermans: EU climate law will 'discipline' rogue states

The first EU-wide climate law will be a "disciplining" exercise to implement the Green Deal - although the Polish climate minister Michal Kurtyka warned the EU Commission about the social cost of delivering the green transition.

Stakeholders' Highlights

  1. UNESDAMaking Europe’s Economy Circular – the time is now
  2. Nordic Council of MinistersScottish parliament seeks closer collaboration with the Nordic Council
  3. UNESDAFrom Linear to Circular – check out UNESDA's new blog
  4. Nordic Council of Ministers40 years of experience have proven its point: Sustainable financing actually works
  5. Nordic Council of MinistersNordic and Baltic ministers paving the way for 5G in the region
  6. Nordic Council of MinistersEarmarked paternity leave – an effective way to change norms

Latest News

  1. EU struggles to remain united This WEEK
  2. How Europe coped with pandemic 100 years ago
  3. Coronavirus crisis deepens, but solidarity booms
  4. Romania: Inside the EU's worst healthcare system, as virus hits
  5. Pandemic is time to recognise gig economy workers' rights
  6. EU doctors: bring refugees on Greek islands to safety
  7. Russia's top coronavirus 'fake news' stories
  8. WHO warning on lockdown mental health

Join EUobserver

Support quality EU news

Join us