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State Aid | 8 January 2021

Revision of the State Aid Guidelines for Environmental Protection and Energy and exemption rules
State Aid
Fossil fuels
European Green Deal

PDF | 568 kb

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Revision of the State Aid Guidelines for Environmental Protection and Energy and exemption rules

Making the EEAG and GBER fit for Europe’s carbon neutrality

This is ClientEarth's reply to the European Commission’s Consultation on the Revision of the State Aid Guidelines (EEAG) for Environmental Protection and Energy and exemption rules. This Annex makes general recommendations relating to making the EEAG true instruments of sustainability and environmental protection while preventing market distortions. It also addresses several questions in the consultation that require more elaborated comments.

The EEAG are perceived by many as a burden and obstacle to the deployment of effective decarbonisation measures, be it because of the dogma of technology-neutral tenders, difficulties for citizen-led projects to participate, or lack of clarity of rules on energy efficiency measures. This has made some Member States and companies to wish to extract fiscal measures from the scope of State aid rules, somthing that could be avoided by clear and enabling rules. On the other, the EEAG have so far facilitated support to clearly unsustainable sectors such as CHP, fossil fuels, small hydropower and forest biomass.

This could be prevented in future by transforming the EEAG into sustainability aid guidelines. This would entail: performing effective control of the compliance of activities with their legal obligations, especially under relevant environmental and energy laws; integrating an assessment of sustainability of those activities (including their alignment with the 2030 and 2050 targets); and thus rejecting aid measures that harm the achievement of the objectives (or more generally, environmental protection).

Finally, the EEAG are also perceived as incomplete or partly outdated as decarbonisation solutions evolve and the need to prevent and mitigate climate change is more pressing than ever. This can be remedied
by, on the one hand, including assessment rules on innovative sustainable decarbonisation technologies or environmental protection methods, as well as on climate mitigation measures; and, on the other hand, providing for clear and strong principles that would guide Member States in designing more innovative aid measures that may not be specifically mentioned in the guidelines but would be enabled nonetheless.