Sunday

14th Apr 2024

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

Get the EU news that really matters

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.

Resist backlash on deforestation law, green groups tell EU

European environmental groups have urged the EU Commission to stand firm on implementing the bloc's landmark anti-deforestation legislation — despite a backlash from governments in South America, Africa and some EU ministers.

Opinion

This 'deregulation' lobbying now threatens EU economy

Next week's EU summit (17-18 April) will discuss the strategic agenda for the next five years. The current "competitiveness agenda" is to a large extent driven by a big lobbying campaign — so far, not well covered by the media.

Latest News

  1. UK-EU deal on Gibraltar only 'weeks away'
  2. Belgium declares war on MEPs who took Russian 'cash'
  3. Brussels Dispatches: Foreign interference in the spotlight
  4. Calling time on Amazon's monopolism and exploitation
  5. Resist backlash on deforestation law, green groups tell EU
  6. China's high-quality development brings opportunities to the world
  7. Ukraine tops aid list again, but EU spending slumps
  8. Who did Russia pay? MEPs urge spies to give names

Stakeholders' Highlights

  1. Nordic Council of MinistersJoin the Nordic Food Systems Takeover at COP28
  2. Nordic Council of MinistersHow women and men are affected differently by climate policy
  3. Nordic Council of MinistersArtist Jessie Kleemann at Nordic pavilion during UN climate summit COP28
  4. Nordic Council of MinistersCOP28: Gathering Nordic and global experts to put food and health on the agenda
  5. Friedrich Naumann FoundationPoems of Liberty – Call for Submission “Human Rights in Inhume War”: 250€ honorary fee for selected poems
  6. World BankWorld Bank report: How to create a future where the rewards of technology benefit all levels of society?

Join EUobserver

EU news that matters

Join us