Towards green EU State aid law? The Guidelines on State aid for Climate, Environmental protection and Energy 2022 in light of the European energy transition

Sammanfattning: The European energy transition entails opportunities to mitigate two of the EU’s most pressing current challenges: climate change and the energy crisis due to the dependency on fossil fuel imports. The EU has committed to limiting global warming to 2°C (preferably 1.5°C), compared to pre-industrial levels. In the context of the European Green Deal, the EU has set the objective to reach climate neutrality by 2050. The Russian aggression against Ukraine in 2022 makes the urgency of the transition even clearer. Therefore, it requires massive investments from the public sector to enable the transformation from coal, oil and natural gas to wind and solar energy. Against this background, this essay deals with the EU’s State aid framework for the European energy transition. It focusses on the recently adopted Guidelines on State aid for Climate, Environmental protection and Energy 2022 (‘CEEAG’). The CEEAG specify the assessment criteria of the European Commission for the compatibility of State aid with the internal market pursuant to Article 107(3)(c) TFEU. The essay asks whether the Commission has committed to ‘green State aid law’, i.e. whether there is coherence between the State aid rules and the EU’s climate protection commitments. Moreover, it asks whether the CEEAG create loopholes that allow for State aid to fossil fuels. The essay applies the classification method of supportive and preventative integration of environmental protection requirements. This concept distinguishes between State aid that may be applied in a way as to enable beneficial environmental measures and State aid that may be applied in a way as to prevent environmental degradation. Accordingly, the essay is divided between the analysis of rules to incentivise the development of renewable energies and rules that may prevent or hinder the use of fossil fuels. The essay finds that on the one hand, the CEEAG enable support for the uptake of renewable energies in various sectors. On the other hand, State aid for fossil fuels creates financial barriers for renewables, which illustrates the interdependence between supportive and preventative integration. The essay shows that the State aid rules specified in the CEEAG allow for aid to fossil fuels, e.g. natural gas. In this respect, the CEEAG’s safeguards are unsatisfactory. Considering the Union’s climate protection commitments, the essay concludes that the Commission’s Guidelines do not constitute green State aid law.