Briefing on the CEEAG

Briefing: The new State aid guidelines for climate, environmental protection and energy 2022

The new State aid Guidelines for climate, environmental protection and energy 2022 (the “CEEAG”) were released on 21 December 2021.1 They will apply as from January 2022 and as long as the EU Commission finds them adequate. They may be re-evaluated as from 2028.

The CEEAG aim at supporting the Green Deal objectives. They do so to a large extent by streamlining the rules for public financial support to renewables, energy communities, clean vehicles, decarbonisation technologies, nature protection and restoration and coal phase out.

However, not everything is green. The long-standing pledge to phase out fossil fuel subsidies, reiterated recently in the political agreement on the 8th Environmental Action Programme, is still not fully implemented. Notably, the CEEAG leave room to finance fossil gas2 projects, either directly for the construction of gas infrastructure or capacity contracts aiming at increasing gas back-up capacity, or indirectly through the production of low-carbon hydrogen or investments in CCUS equipment on gas plants. Energy intensive users can also keep benefiting from enlarged exemptions to pay renewables and social policies levies. One can therefore validly question whether the CEEAG are really supporting a just transition.

More than the text, its application by the Member States and the Commission will be key. The interpretation of some conditions, in particular whether gas projects will contribute to the 2030 and 2050 climate targets or “avoid lock in”, should become clearer as cases develop.