ClientEarth's response to European Commission’s consultation CISAF

ClientEarth’s response to the European Commission’s consultation on the draft Clean Industrial State Aid Framework (CISAF).

The Commission’s draft CISAF aims to support the Clean Industrial deal by simplifying how Member States can obtain approval from the Commission for State aid schemes supporting renewable energy, decarbonisation and clean technologies. The goal of this simplification is to enable quicker implementation of these aid schemes.

In its response ClientEarth notes that:

• Simplification of State aid approval by the European Commission should take place only if there are sufficient safeguards against environmentally harmful aid. Unfortunately, the CISAF falls short in this aspect. It does not make the necessary improvements to the existing State aid rules and in some areas there is even a clear regression.
  • The CISAF does not effectively include environmental concerns as it fails to apply the 'do no significant harm' (DNSH) principle across all areas. The DNSH principle should apply to all CISAF aid categories and not only to renewable energy.
  • The CISAF does not require a public consultation of new aid schemes, whereas this is required in the CEEAG for (i) large renewable energy and decarbonization schemes as well as for fossil gas investments and (ii) security of electricity supply.
• The CISAF creates inconsistencies within the State aid rulebook. It will overlap with existing State aid frameworks, notably the CEEAG and the Regional Aid Guidelines. This creates confusion which is counterproductive to the simplification objective. It is also legally inconsistent because identical aid falls in the material scope of several frameworks that provide different conditions and methodologies.
• The CISAF wrongly supports fossil gas as an industrial decarbonisation technology. We strongly oppose this because such aid has lock-in effects by (i) displacing public funds from fossil-free alternatives, whereby electrification should be prioritised and renewable gases should be used for hard-to-abate sectors only, (ii) limiting the industry’s ability to switch to cleaner alternatives at a reasonable cost, (iii) increasing the likelihood of stranded assets and (iv) going contrary the EU’s emission reduction targets.  The proposed safe-harbour is particularly concerning since it relies on the flawed concept of hydrogen-readiness.