4th July 2014

ECJ rules on renewable energy support schemes

The Court of Justice of the EU in its ruling on 1 July on the renewable energy support schemes upheld the existing EU legislation allowing separate national schemes. The case was widely debated and eagerly anticipated by the energy industry throughout the EU. It involves national renewables support schemes and their compatibility with the internal market. The origin of the case lies in Aland, a Finnish archipelago, where a company owns a wind farm and supplies electricity to Swedish companies. Based on the renewables support directive (2009/28/EC), Sweden introduced a national support scheme. Under this scheme, Sweden-based producers of electricity from renewables get certificates that they sell to distribution companies or consumers directly, from which they get additional income. This income compensates for higher investment costs involving green energy Consumers of electricity must hold a certain number of such “green certificates”, otherwise they need to pay a fee. The Aland-based (i.e. Finland-based) company asked Swedish authorities to issue the certificates for it, since Swedish consumers import electricity that it produces. Swedish authorities refused such request and the Swedish court, onto which the company appealed, asked the EU Court of Justice to rule whether the renewables support EU legislation does not violate the internal market. Now the Luxembourg-based court ruled that it does not. In its judgment it states that the Swedish support scheme is in line with the directive and that the directive does limit the internal market, allowing for certain discrimination. However, the Court stated, the discrimination is compensated by the higher public interest objective in the case, and that is environmental protection and fight against climate change. Separate national support schemes are therefore consistent with the internal market and can continue.

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Members of the American Chamber of Commerce in the Czech Republic