Debate: Climate, Energy and Environmental State aid guidelines
Date: TUESDAY, 19 OCTOBER 2021
Speaker: Margrethe Vestager
Language: EN

Now, I hope we can enable knowledge about the opportunities that the new guidelines will provide. From the simple fact that the Green Deal is our top priority, we need to fight climate change and we need to get the necessary resources to do so. The targets have been set. Proposals have been tabled, in front of you. And the Green Deal is also our growth strategy. So that we can transform Europe into a fair and prosperous society with a modern, resource-efficient and competitive economy.  We want the transition to be just and to equip our industries with the tools to play their part in the transition. The recent spike in energy prices has demonstrated the urgency of this transition and the need to move away from fossil fuel dependency.  Reaching our ambitious targets involves nothing less than a transformation of the way that we power our lives. We have to make huge investments in infrastructure, in wind, in solar plants, in energy-efficient buildings, in networks that secure green mobility and in decarbonising industry. The magnitude of this investment challenge, requires mobilising both private and public funds in a way that ensures best value for money and crowds in private investment.  The revision of our existing guidelines for energy and environment protection State aid will play a key role in helping Member States provide adequate support to reach Green Deal objectives, where the markets cannot deliver alone.  The new set of guidelines will provide a flexible, and we also hope, future—proof enabling framework to accompany the Green Deal. To that end, a number of examples as to what we do. We are proposing to broaden the scope of the guideline to facilitate support in new areas important for the green transition. This includes clean mobility, circularity, biodiversity and energy efficiency in buildings. Our new guidelines would cover all technologies that can deliver the Green Deal, such as those for production of renewable and low-carbon hydrogen. Renewable energy remains as important as ever in achieving our targets. Member States continue to set up separate renewable schemes as they do today under a new, cross-cutting section on decarbonising measures. The flexibility also extends to the type of aid instruments and to the amount of aid. The draft guidelines accommodate calls by the industry to allow contracts for difference and also foresees that support may cover up to a 100% of the extra costs of greener investment – what we call the funding gap, where aid awards are based on competitive bidding.  As a counterbalance to the increased flexibility, obviously we need safeguards to ensure that the aid is effectively directed to where it’s necessary to improve climate and environmental protection and is limited to what is necessary to achieve the environmental goals. Those safeguards include public consultation above certain thresholds and open tenders being the general rule in most areas to ensure best value for taxpayers’ money.  Energy communities, they play an important role in ensuring citizen participation and, of course, also public acceptance. In line with the current case practice, it remains possible for Member States to introduce specific features in their auctions to facilitate the participation of such communities in tenders, also where the thresholds for no tendering are exceeded.  Last but not least, we want our guidelines to work seamlessly together with and support relevant European legislation and policies in the environmental and energy field, and that also requires a coherent approach to ending subsidies for fossil fuels and particularly those which are most polluting. For those fossil fuels, the draft guidelines foresee that a positive assessment under State aid rules is unlikely in the light of the negative effects on the environment. In the same vein, we also need to avoid that support for gas in a transitional period creates lock-in effects, not compatible with the 2030 and 2050 climate targets.  I would like to conclude with a few words on the process ahead of us. As you are most certainly aware, we launched a public consultation on the perpetuation of the guidelines that ended on 2 August. We received an impressive amount of contribution, more than 700, which also demonstrates the importance stakeholders and authorities attach to these guidelines. I want to say thank you for the valuable inputs and contributions also received from Members of this Parliament.  In addition, meeting with Member States took place in mid-July to collect feedback, to answer questions on the draft guidelines. In order to ensure legal certainty, our plan is still to adapt the revised guidelines by the end of the year. As you can hear, this debate is very, very well timed.  In parallel, we are also undertaking a targeted revision of the General Block Exemption Regulation. That regulation covers a wide range of State aid measures, which can be implemented without notification to the Commission. We want that simplification to also be extended to investment in new technologies, such as renewable and low-carbon hydrogen and carbon capture and storage or use, and to areas that are key to achieve the objectives of the Green Deal; could be zero pollution, resource efficiency, biodiversity. Ley provisions on clean mobility and energy performance of buildings were already introduced in July this year.  In addition, the rules will be made more flexible with regard to the definition of eligible costs and aid intensities. A public consultation on the targeted revision of the Block Exemption Regulation was launched at the beginning of this month and will run until 8 September.  I am really happy that we can have this debate. As you can hear, it is really well timed and I’ll be looking forward to hearing your views.