KEF, Alm.del - 2020-21 - Bilag 406: Høringssvar om udkast til statsstøtteretningslinjer for klima, miljøbeskyttelse og energi

Klima-, Energi- og Forsyningsudvalget 2020-21
KEF Alm.del Bilag 406
Offentligt

Danish comments to the public consultation concerning the draft on Guide-

lines on State aid for climate, environmental protection and energy

1. General comments to draft guidelines

The Danish Government welcomes the opportunity to comment on the

Commission’s

draft on State aid Guidelines for climate, environmental protection and energy 2022

(hereafter “CEEAG”).

The current Guidelines for Environmental Protection and Energy 2014-2020 has

played an important role, in relation to not only the regulation of the internal market,

but also

–

and especially

–

when it comes to fulfilling and meeting

EU’s energy and

climate targets and objectives. The Danish Government therefore welcomes the draft

CEEAG and the changes introduced in this draft to support EU and its Member States

in the efforts to meet the targets to reduce greenhouse gas emissions and becoming

climate-neutral by 2050.

As an introductory remark, the Danish Government finds that the structure of the draft

CEEAG is clear and logical and thereby more accessible to the reader.

Furthermore, the Danish Government generally finds that the draft CEEAG strikes a

reasonable balance between considerations for competition in the internal market

and the urgency to ensure a fast and fair transition to a low carbon economy.

In previous consultations concerning the revision of the guidelines, the Danish Gov-

ernment has highlighted the need for a strengthened, modernized and a future proof

state aid legislation that can support the green transition in the Member States and

ensure the necessary investments in renewable energy, including new renewable

energy technologies, and other types of technologies that can reduce greenhouse

gas emissions.

The Danish Government therefore welcomes that the draft CEEAG not only seems

to be more aligned with recently adopted energy legislation, for example the Renew-

able Energy

Directive (2018/2001/EU) (hereafter “RED II”),

but also the intention to

future proof the guidelines by not locking it to existing RES technologies and ensuring

that it should be interpreted together with the relevant sector legislation. The changes

introduced by the Commission in section 4.1 of the CEEAG, which seek to clarify

how the Commission will assess aid to technologies such as Power-to-X, is e.g. an

example on how the guidelines will be more suitable as an instrument for designing

aid schemes in the future.

However, we have also identified some elements contained in the sections on the

specific aid categories in the draft CEEAG that could give rise to uncertainty or bring

about certain challenges when applying the future CEEAG. These sections are ad-

dressed in the following.

Dato

30. juli 2021

J nr.

2021-2484

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KEF, Alm.del - 2020-21 - Bilag 406: Høringssvar om udkast til statsstøtteretningslinjer for klima, miljøbeskyttelse og energi

2. Specific comments to the various sections of the guidelines

Section 4.1: Aid for reduction and removal of greenhouse gas emissions in-

cluding through support for renewable energy

The Danish Government welcomes that the relevant provision regarding aid for re-

newable energy now focuses on reduction and removal of greenhouse gas emission.

We also welcome that the scope has been broaden and e.g. includes RES and other

technologies for reducing greenhouse emissions as hydrogen and CCS. Both hydro-

gen and CCS are technologies that still cannot compete at market terms, but are

necessary in order to decarbonize sectors that are difficult to electrify. It seems like

an important and essential step in relation to support EU and its Member States in

reaching the greenhouse gas emission reduction targets, which are set at EU and

national level, and becoming climate neutral by 2050.

The government also appreciates that the key principle concerning competitive bid-

ding as a default mechanism for awarding aid and setting the level of aid is passed

on to the new guidelines, including section 4.1. And that bidding - unless justified and

to the extent possible - should be open to competing technologies in the Member

State, which can deliver the target objective of reducing greenhouse gas emissions.

The Danish Government, however, notes that the draft CEEAG do not seem to target

countries who already have a very high percentage of renewable energy in their elec-

tricity grid and gas grid. The relevant models and calculations requested in this sec-

tion do not seem to take into account the different starting points in the various Mem-

ber States, thus making it difficult for Member States with high percentages of re-

newable energy to implement aid schemes for new technologies, such as Power-to-

X. It is for instance unclear, how it is determined if hydrogen can be characterised as

renewable energy. In this regard, it is particularly relevant to know whether there

exists a

“minimum limit” in relation to electricity from the electricity grid, so that hy-

drogen produced by Power-to-X always would be considered renewable energy

when e.g. more than 90 percent of the electricity in the grid stem from renewable

energy sources.

Concerning the new requirement of a

public consultation

before new aid schemes

are notified, the Danish Government acknowledges the need for a national public

consultation. However, some Member States

–

e.g. Denmark

–

has already a long

legal tradition of public consultations concerning new legislation and aid schemes

etc. The mandatory public consultation regime set out in the draft CEEAG may there-

fore lead to unnecessary administrative burdens in these situations and potentially

have a negative impact on the timeframe for the approval of a notified aid scheme.

The Danish government therefore proposes a general exception for the public con-

sultation, where general consultations in the Member State concerned can replace

the obligation of a public consultation within the framework of the CEEAG.

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KEF, Alm.del - 2020-21 - Bilag 406: Høringssvar om udkast til statsstøtteretningslinjer for klima, miljøbeskyttelse og energi

The Danish Government also notes that Article 26 of RED II does not regulate

biogas

in general, but only biogas used for transport and biofuels, liquid biofuels and bio-

mass produced from food and feed crops. Consequently, CEEAG point 77 should be

widened and not only refer to that biogas generally must comply with the require-

ments set out in RED II, Article 26. The Danish Government therefore proposes that

point 77 of the CEEAG is clarified regarding this matter.

Section 4.2: Aid for the improvement of the energy and environmental perfor-

mance of buildings

Regarding section 4.2.2

‘Scope and supported activities’, point 116 (d),

the Danish

Government proposes that the eligible investments should not be limited to wiring or

structured cabling, but should also include e.g. software, because it may constitute

a substantial part of the digitalisation of the building.

Section 4.9: Aid for energy infrastructure

The European Green Deal and EU’s climate

targets require that policy initiatives on

infrastructure provide the necessary framework to phase out fossil fuels while ensur-

ing security of supply and cost-efficiency. It is important that state aid to infrastructure

projects not represent a loophole for financing lifetime extension of fossil-based in-

frastructure. Investments in gas infrastructure should only be possible, if there are

certainty that the infrastructure is fit for use for green hydrogen and renewable gases

or fuels.

Section 4.10: Aid for district heating and cooling

The Danish Government welcomes the abolition of the maximum aid intensity for aid

for district heating and cooling. The Danish Government also welcomes the require-

ment, which only allows aid to energy efficient district heating and cooling. However,

it would be highly appreciated with further guidance on how the share of renewable

energy in the collective power or gas grid should be included in the calculation when

assessing whether a district heating network qualifies as energy efficient.

Section 4.11: Aid in the form of reductions from electricity levies for energy-

intensive users

The Danish Government notes that the list of eligible sectors under Section 4.11 has

been shortened, which means that it would not be possible to compensate certain

energy intensive sectors from 2022. We would be interested in getting more back-

ground information concerning these changes.

Some stakeholders have also drawn our attention to the use of NACE codes and

some of the challenges connected to the use of this. A specific NACE code does not

always cover an entire sector and its products (e.g. mineral wool). This could create

unfair competition, if some products falls under the option to be compensated, but

other similar products does not. A solution could perhaps be to ensure an evaluation

at prodcom level for NACE codes, which represents a heterogeneous sector.

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KEF, Alm.del - 2020-21 - Bilag 406: Høringssvar om udkast til statsstøtteretningslinjer for klima, miljøbeskyttelse og energi

Section 4.12: Aid for coal, peat and oil shale closure

The Danish Government notes that guidelines on aid for early closure corresponds

with recent decisions from the Commission on aid for closure of coal-fired power

plants. Nevertheless, Denmark welcomes the inclusion of the Commission’s previous

practices in the CEEAG, as it provides legal certainty.

However, the Danish Government would also like to urge the Commission to expand

the scope of the guidelines to include the early closure of power plants fired by all

types of fossil fuels. For the present, the shift away from coal, peat and oil share

might be the most important driver for decarbonisation in some countries. It is, how-

ever, our impression that not only Denmark, but also a large number of Member

States soon are beyond that point and could be ready to take the next step away

from all fossil fuel in the power and heating sector.

3. Other comments

Even though the draft CEEAG should be future proof in relation to coming revisions

of EU’s energy legislation (Fit for 55-package),

we would still stress the importance

of ensuring that any relevant changes in e.g. RED II are taken into consideration

before the adoption of the guidelines.

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