Europex welcomes the opportunity to comment on the draft Climate, Energy and Environmental Aid Guidelines. To ensure that the policy objectives set out in the Green Deal get delivered at least cost and that the EU’s internal market principles are upheld, State Aid rules need to find the right balance between supporting decarbonisation projects and minimising distortion of competition and trade in the Internal Energy Market.
For energy and emissions markets, all types of aid have distortive effects and should be minimised. Poorly designed aid instruments deployed at scale, including CfDs and CCfDs, risk undermining the functioning of these wholesale markets.
Furthermore, while we welcome the conditions under the negative criteria to minimise distortive effects, we find that additional provisions are needed to safeguard the functioning of energy and emissions markets, including a clear time limit for the aid, stronger justification of why operating aid is needed and ensuring the right selection and design of instruments.
We provide our feedback in the attached response, focusing on the type of aid, Contracts for Difference (CfDs) and Carbon Contracts for Difference (CCfDs), the compatibility assessment and the provisions related to aid for the reduction and removal of greenhouse gas emissions, including through support for renewable energy.