Friday

22nd Oct 2021

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

Become an expert on Europe

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

... or subscribe 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.

Kerry resets climate relations before Glasgow summit

John Kerry, the US special presidential envoy, was in Brussels to discuss how to tackle climate change with the European Commission. His appearance also marked a major shift in relations after the previous US administration under Donald Trump.

Commission: Pioneering Nordics' energy mix 'example' to EU

The Nordic electricity market is an example of successful market integration plus climate action, as the share of sustainable energy keeps growing, the European Commission said. However, the decarbonisation of the transport sector remains a challenge.

Investigation

How Energy Treaty 'shadow' courts prolong EU's fossil age

The treaty enables companies to claim billions in compensation from states in front of international arbitration tribunals, if they feel unfairly treated by the states' energy or climate policies.

Feature

Adriatic Sea 'risks turning into a water desert'

The Adriatic Sea risks turning into a water desert, experts warn. Overfishing, bottom trawling, pollution, and climate change are seriously threatening the biodiversity of the Adriatic.

News in Brief

  1. Russia's anti-vax campaign backfired, EU says
  2. China angered as MEPs call for Taiwan talks
  3. Emissions from La Palma volcano reach Brussels
  4. Body of eighth victim of Belarus border-crisis found in river
  5. Report: Syrian bank fiddling currency to evade EU sanctions
  6. Nato adopts plan to counter new Russian threats
  7. Alleged killer of British MP 'felt affiliated' to IS
  8. Coronavirus: Belgium returns to 'red' zone

EU faces long wait for full vaccine supplies

The EU is still several months away from having enough vaccines to inoculate its 450 million people, with Pfizer and BioNTech, its principle suppliers, aiming for September for delivery targets.

Stakeholders' Highlights

  1. Nordic Council of MinistersNew report reveals bad environmental habits
  2. Nordic Council of MinistersImproving the integration of young refugees
  3. Nordic Council of MinistersNATO Secretary General guest at the Session of the Nordic Council
  4. Nordic Council of MinistersCan you love whoever you want in care homes?
  5. Nordic Council of MinistersNineteen demands by Nordic young people to save biodiversity
  6. Nordic Council of MinistersSustainable public procurement is an effective way to achieve global goals

Latest News

  1. Gas price spike exposes rift at EU summit
  2. Poland vows not to give into EU 'blackmail' at summit
  3. EU vows to uphold Paris climate ambition amid scientists' fears
  4. Commissions's new migration pact still seeking 'landing zone'
  5. Europe can't ignore Chinese encroachment in Ukraine
  6. Lithuania - where 'biodiversity funding' is cutting down trees
  7. Dutch lawyers take Frontex to EU court over pushbacks
  8. Polish rule-of-law debate boils over to EU summit

Join EUobserver

Support quality EU news

Join us