Brussels (Brussels Morning Newspaper) – EU Commission approved a €578 million Romanian scheme to reduce electricity levies for energy-intensive firms.
The European Commission has authorised a €578 million Romanian scheme to lower an electricity levy rate for energy-intensive firms. The levy is planned to boost electricity from renewable energy sources. The scheme strives to mitigate the risk that, due to this levy, energy-intensive companies may relocate their moves to locations outside the EU with less driving climate approaches.
What is the role of green certificates in this scheme?
According to the EU Commission, in 2011 Romania raised green certificates for boosting electricity from renewable sources, under which qualified producers of electricity from renewable energy sources welcome green certificates for each megawatt hour made and supplied to the grid. Electricity suppliers are obliged to buy a mandatory quota of green certificates. The expenses of the green certificates are ultimately handed on to consumers through a levy.
The scheme is desired to lower the levy rate for energy-intensive firms, thus mitigating the risk that the businesses relocate their activities to areas outside the EU with less ambitious climate procedures.
Why did the eu commission approve this €578 million aid?
According to the Commission, it evaluated the scheme under EU State aid regulations, in particular of the Treaty on the Functioning of the European Union (‘TFEU’), which allows Member States to fund the development of certain economic actions subject to certain conditions, as well as under the CEEAG, which permit Member States to grant aid in the form of declines from electricity levies for energy-intensive users.
As a result, the Commission figured that the scheme promotes the development of certain economic activities depending heavily on electricity and is particularly exposed to international competition. The action is necessary and appropriate to assist in fulfilling the European Green Deal objectives.
Moreover, the measure is proportional, as (i) the individual aid amounts do not surpass the maximum aid amount permitted under the CEEAG and (ii) it is determined to sectors listed in the CEEAG. The positive outcomes of the scheme outweigh any possible negative impacts on competition and trade in the EU. On these grounds, the EU Commission endorsed the Romanian scheme under EU State aid rules.
