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

I think that the very broad scope of our debate today also shows that these are guidelines that will address a number of different issues. They will also mirror the input that we have gotten from many stakeholders: that of the Member States, that of industry, that of NGOs – as said, more than 700 contributions. For us the important thing, of course, is that the guidelines work. But where they should work is where the market cannot deliver. What we have ahead of us is enormous, and we need to crowd in private investment so that where there is a business case for green, it is a business case that is being pursued. That goes, for instance, for energy efficiency in buildings. Here, of course, support can be given, but that would be if the payback time is more than five years, because within five years, actually there is a very good business case for private investment in energy efficiency in buildings. I want to address a few of the specific comments. There has been a debate about how to support industry. This is not about small, medium—sized or large businesses. This is about energy intensity, because there are challenges when it comes to decarbonisation. For some businesses they are deep. This is why we suggest the contracts for difference. This is why we support decarbonisation. This is why we want hydrogen to become a real thing, and that transition does not come for free. Here we need to help out, because the risk for the individual business is too big.  I fully acknowledge the need for reductions when the levies are high – the levies on top of the very cost of producing energy, but also very high levies to support and finance the green transition. Here reductions I think must be seen in the light of the risk of relocation due to very high levels of electro intensity, but also trade intensity. Where those indicators are low, so not very electricity intensive, not very trade intensive, well then there is the high risk of distortion if aid is given compared to others.  On the other hand, if there is a very high electro intensity, a very high trade intensity, obviously there is a risk of distortion between inside and outside of the Union.  Levy reductions are usually financed by other consumers. Very often, they are financed by household consumers. So there is a balance to be kept here. Of course, now it’s very difficult to think about such a situation when we have very high energy prices. But in a situation where prices are more normal, of course, it is important to maintain that there is a price signal for energy efficiency investments to be profitable.  I have taken good note of the many inputs on support for industry, and here we need to find a good balance. On the many comments on how to move away from fossil fuels, obviously, I have taken very good note of that as well because we have very strong targets for 2030 and for 2050 and obviously the Commission fully subscribes to this. This is why we propose only to support gas on a transitional basis and only insofar as compatible with 2030 and 2050 goals, which means no lock—in effect or stranded assets.  On the debate about nuclear, you will know, of course, that we do not address nuclear energy in these guidelines. Nuclear support is, if approved, approved directly on the Treaty. You will see that in the Hinckley Point decision and also on the more recent decisions. Here we rely on regulation and lean on regulation.  I think it is very important that here state aid only has a supporting role. What is the real role in our transition is, of course, the targets that have been set up for 2030 and 2050, the work that you have done already.  I was very taken by the comments of the Member of this House, Mr Băsescu, because equal treatment of Member States is an essential principle here. Without that, the level playing field would disappear. The single market would be completely fragmented. This is also why, when we work on these guidelines, we need to take into consideration that aid should be only proportional, necessary. It should be limited to achieving what we want to achieve so that richer Member States cannot outplay not so rich Member States when it comes to this support. It is important to help each other to get this right.  On closure aids for coal: we have a new chapter on closure aids and that allows for support, in particular for social and environmental measures linked to closure, so the exceptional cost. Of course, now it should happen when we also have the just transition funds, while we have the funding available to enable the regions actually to do the transition.  Actually, I think on balance there’s food for thought from us, but there’s also I think, a lot of support in this House for state aid rules to be there. Indeed, to allow for new technologies to get the necessary support to get started, to get the cost curve down, but also in recognising how the previous guidelines have helped us for renewable energies to stand on their own feet.  Now we have renewables being built without state support when it is tried and tested, and there is a market. That market created by the targets that you have set up. That is the balance that we are trying to get to here, to push to be market—creating, for private investment to take its full effect, but for state aid to be available where it’s necessary and where it makes a lot of good sense.  One of the things that we will also continue considering is, of course, how to make sure that there is ownership, how to make sure that energy communities, that smaller providers can see themselves in an energy system that consist of micro, regional and big players alike to help us preserve our energy security.  I would like to thank you very much because I think that what we have achieved tonight is, of course, food for thought for us, but just as much, I think, a very strong support for the many actors who needs to invest right now in order for us to achieve our Green Deal objectives. So on that note, I will thank you very much for taking part today and for allowing this debate to happen.