Guidelines on State aid for environmental protection and energy 2014-2020

Literature
Author Title (in English) Publisher Year Country
European Commission  Guidelines on State aid for environmental protection and energy 2014-2020 European Commission 2014 EU

Title (orig.): Guidelines on State aid for environmental protection and energy 2014-2020

Language: English

Summary:

These European Commission guidelines are new rules on public support for environmental protection and energy to help renewable sources of energy enter the marketplace. Their aim is to support EU countries in reaching their 2020 climate targets while addressing the market distortions that may result from subsidies granted to renewable energy sources.

Art 3.2.5.1.For measures supporting integrated projects such as integrated energy-efficiency measures, or biogas projects, the counterfactual scenario can be difficult to establish. Where a counterfactual scenario cannot credibly

be established, the Commission is amenable to consider the total costs of a project as an alternative, which may imply lower aid intensities to reflect the different eligible cost calculation. Art 3.3.2.3. A i d f o r e x i s t i n g b i o m a s s pl a n t s a f t e r p l a n t d e p r e c i a t i o n (132) Unlike most other renewable sources of energy, biomass requires relatively low investment costs but higher operating costs. Higher operating costs may prevent a biomass    *(2) plant from operating even after depre ciation of the installation as the operating costs can be higher than the revenues (the market price). On the other hand, an existing biomass plant may operate by using fossil fuel instead of biomass as an input source if the use of fossil fuel as an input is more economically advantageous than the use of biomass. To preserve the use of biomass in both cases, the Commission may find operating aid to be compatible with the internal market even after plant depreciation.

(133) The Commission will consider operating aid for biomass after plant depreciation compatible with the internal market if a Member State demonstrates that the operating costs borne by the beneficiary after plant depreciation are still higher than the market price of the energy concerned and provided that the following cumulative conditions are met:

(a) the aid is only granted on the basis of the energy produced from renewable sources;

(b) the measure is designed such that it compensates the difference in operating costs borne by the beneficiary and the market price; and

(c) a monitoring mechanism is in place to verify whether the operating costs borne are still higher than the market price of energy. The monitoring mechanism needs to be based on updated production cost information and take place at least on an annual basis.

(134) The Commission will consider operating aid for biomass after plant depreciation compatible with the internal market if a Member State demonstrates that, independent from the market price of the energy concerned, the use of fossil fuels as an input is more economically advantageous than the use of biomass and provided that the following cumulative conditions are met:

(a) the aid is only granted on the basis of the energy produced from renewable sources;

(b) the measure is designed such that it compensates the difference in operating costs borne by the beneficiary from biomass compared to the alternative fossil fuel input;

(c) credible evidence is provided that without the aid a switch from the use of biomass to fossil fuels would take place within the same plant; and

(d) a monitoring mechanism is in place to verify that the use of fossil fuels is more beneficial than the use of biomass. The monitoring mechanism needs to be based on updated cost information and take place at least on an annual basis   Annex 2 Typical State Intervention Biogas production which is upgraded to a level of natural gas: If the aid is limited to the upgrading of biogas, the counterfactual

constitutes the alternative use of these biogas (including burning). Biofuels and biogas used for transport:  In principle the extra investment cost compared to that of a normal

refinery should be chosen, but the Commission can accept alternative counterfactuals if duly justified.

Targets are:

— greenhouse gas emissions 20 % (or even 30 %, if the conditions are right) lower than 1990 levels;

— 20 % of energy from renewables; and

— 20 % increase in energy efficiency.

Link:

Guidelines on State aid for environmental protection and energy 2014-2020

Contact

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FNR - The Agency for Renewable Resources
www.fnr.de
Christiane Volkmann
c.volkmann@fnr.de

CZ Biom - Czech Biomass Association
www.czbiom.cz
Jan Doležal
dolezal@biom.cz

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