Consultation on the revised State aid General Block Exemption Regulation (GBER)

This is ClientEarth’s reply to the European Commission’s Consultation on the revised State aid General Block Exemption Regulation (GBER).

The GBER sets out the conditions under which State aid can be paid by the Member States without having to be notified for prior authorisation to the European Commission. As Member States are alone to assess whether their public funding to economic activities complies with the GBER, the rules therein must be clear and straightforward.

The Commissions is reviewing part of the GBER to align it with the European Green Deal and the EU Climate Law objectives. For environmental protection and energy, the rules laid down in the GBER are complementary to the State Aid Guidelines for Climate, Environment and Energy (CEEAG): they thus need to be consistent and future-proof.

ClientEarth gave feedback on the Commission’s draft in relation to aid for climate, environmental protection and energy. That includes notably renewable energy sources, decarbonisation measures, gas, hydrogen, tax reductions for energy intensive industries, clean mobility, biodiversity, energy infrastructure as well as district heating and cooling.

Whereas the draft GBER is a good step towards the recognition of renewable energy communities and support to biodiversity protection, it remains, in our opinion, weak on several points. In particular:

• Member States can give aid to gas projects at the condition that the projects are “compliant with the 2030 and 2050 climate targets” - that is a vague and hardly operational notion that is not defined anywhere and that Member States currently interpret very differently;
• Although the GBER supports the deployment of renewable hydrogen, it also quietly supports low-carbon hydrogen, which is a mistake given the climate impact of the energy sources for its production. At the very least, it should set very stringent eligibility requirements, amongst others on proper greenhouse gas accounting and future conversion to renewable hydrogen.
• To help achieve the EU’s and national energy efficiency targets, the Commission should further clarify and simplify the method to calculate the eligible costs for aid for energy efficiency, as well as extend its scope. The GBER should also include the Energy Efficiency First legal principle.
• The Commission persists in maintaining the permissive exemptions from taxes for energy intensive businesses, without demonstrated risk of carbon leakage.