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State aid: Commission approves Romanian green certificate reduction for energy-intensive users
The European Commission has found that the Romanian green certificate reduction scheme, reducing the contributions of certain energy-intensive users to the financing of renewable energy, is in line with EU state aid rules, and in particular with the Commission's new Energy and Environmental Aid Guidelines. The Commission has concluded that the partial compensation for the cost of financing renewable energy support is necessary to ensure the competitiveness of energy-intensive industries without unduly distorting competition in the Single Market.
Commission Vice President in charge of competition policy Joaquín Almunia said: "The Romanian scheme enables companies that are both electro-intensive and exposed to international trade to remain competitive without unduly distorting competition in the Single Market. It will support Romania in reaching its 2020 climate targets whilst at the same time appropriately addressing the risk of carbon leakage."
In July 2014 Romania notified plans to reduce the contribution to the financing of renewable energy for certain companies active in sectors with particularly high electro-intensity and trade exposure. The beneficiaries will pay 85%, 60% or 40% less RES support if they demonstrate an electro-intensity of more than 20%, between 10% and 20%, or between 5% and 10%, respectively. The beneficiaries would also need to show that they (1) do not record debts to the general consolidated budget of the state; (2) carry out energy audits and implement measures to improve their energy efficiency; (3) do not lay off more than 25% of the employees and maintain activities in the European Economic Area; and (4) conclude partnerships with educational institutions in order to narrow the theory-practice gap, increase professional level and attract skilled personnel.
The Commission assessed the compatibility of the measure under the provisions of its new Energy and Environmental Aid Guidelines adopted in April 2014. The investigation found that reductions are limited to companies active in sectors recognised by the guidelines as being both energy-intensive and exposed to international trade. The additional conditions to select eligible beneficiaries are objective, transparent and do not discriminate between companies that are in a similar factual situation. The green certificate reductionscheme will enter into force on 1 December 2014 and will expire on 31 December 2024. The yearly budget is estimated at around € 75 million with approximately 300 beneficiaries.
Background
In July 2011, the Commission approved the Romanian green certificate support system for promoting electricity from renewable energy sources. Producers of electricity from RES receive a specific number of green certificates, depending on the technology used, for each MWh produced and delivered to the grid. Electricity suppliers need to purchase a mandatory quota of green certificates and fully pass on the costs of the green certificates to the final consumers.