EU Justice Court Rules German Feed-In Tariffs Not State Aid

The European Court of Justice has annulled the Commission's decision that feed-in tariffs, as provided by the German 2012 renewables law EEG, constitute state aid.

The World Wind Energy Association explains that the European Commission pressured Germany and other governments to wrongly notify feed-in legislation as state aid, which caused feed-in legislation to be substituted with a system of auctions.

The decision by the court thus reveals that there has been no legal basis for such a switch which puts the successful transition towards a renewable energy based economy at risk, WWEA said.

“According to the Court of Justice, the General Court was wrong to find that the funds generated by the EEG surcharge constituted State resources," the court said.

"It follows that a factor required in order to classify as ‘aid’ advantages resulting from the mechanisms established by the EEG 2012 is lacking.”

The EEG surcharge cannot be assimilated to a levy since the EEG 2012 does not require suppliers to final customers to pass on the amounts paid in respect of the surcharge to customers, the court stated, adding that the fact that in practice the financial burden resulting from the EEG surcharge was passed on to the final customers is not sufficient.

According to the court, the General Court, on the other hand, failed to establish that the state held a power of disposal over the funds generated by the EEG surcharge or even that it exercised public control over the transmission system operators responsible for managing the funds.

The Court of Justice also finds in particular that the fact that the funds from the EEG surcharge are allocated exclusively to the financing of the support and compensation schemes tends rather to show that the state was specifically not entitled to dispose of those funds, that it is said to decide on a different allocation.

Although the factors accepted by the General Court permit the conclusion that the public authorities monitor the proper implementation of the EEG 2012, they cannot permit the conclusion that there is public control over the funds generated by the surcharge, the court writes.

“Legislation related to renewable energy should be based on the successful principles which are well known, including feed-in tariffs which allow for a broad, non-discriminatory participation of all potential investors," said Stefan Gsänger, WWEA Secretary General.

"Considering the huge amount of investment that is required to shift the world’s energy supply away from fossil and nuclear resources towards a full renewable energy supply, it is of utmost importance that investment is in the hands of as many citizens as possible. New regulatory frameworks which aim at supporting integrated approaches should also take broad participation and broad distribution of benefits as a basis."

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