ERU, Alm.del - 2021-22 - Bilag 87: Orientering om regeringens høringssvar til Europa-Kommissionens høring vedr. til målrettet revidering af den generelle gruppefritagelsesforordning samt orienteringsnotat, fra erhvervsministeren

Erhvervsudvalget 2021-22
ERU Alm.del Bilag 87
Offentligt

NOTE

18 November 2021

2021-15005

vibtof

Danish response to the Commission’s invitation to comment on

the

targeted review of the General Block Exemption Regulation (revised

rules for State aid promoting the green and digital transition)

The Danish government appreciates the opportunity to comment on the

European Commission’s draft

regulation on amending Regulation (EU) No

651/2014 declaring certain categories of aid compatible with the internal

market in application of

Articles 107 and 108 of the Treaty (“the General

Block Exemption Regulation”) (hereinafter “GBER”).

General comments

In general, the Danish Government is positive towards the draft revised

GBER. The GBER is an important tool in the efforts to promote projects to

help reach the EU and Denmark’s climate objectives.

The Danish

Government grants a large amount of aid in accordance with the provisions

of the GBER reg. aid for environmental protection. Therefore, we welcome

the proposed amendments to the GBER, as the scope of the regulation with

the amendments will be expanded to include more environmental and

climate initiatives, including PtX and CCS projects. The amendments also

clarify a number of provisions, which have caused doubt in regards of

interpretation so that the GBER will be easier to use.

Clarifications and updates

In general, the new clarifications are positive. However, the Danish

Government has identified specific provisions in the draft regulation,

which can cause doubt or difficulties in the practical application. These

provisions - which mainly concerns the specific provisions on

environmental protection - are described below.

Specific comments

Below, we will give our comments to specific provisions in the draft

GBER.

Art. 1 (1) (y)

–

The definition of renewable hydrogen

There is no definition of renewable hydrogen in the current GBER. The

proposed definition of renewable hydrogen is in accordance with a

delegated act from DG Energy in accordance with Art. 28 of the VEII,

where the timetable for its adoption is uncertain. The extension of the

ERU, Alm.del - 2021-22 - Bilag 87: Orientering om regeringens høringssvar til Europa-Kommissionens høring vedr. til målrettet revidering af den generelle gruppefritagelsesforordning samt orienteringsnotat, fra erhvervsministeren

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GBER to include aid for the promotion of renewable hydrogen will thus be

less useful, as long as the precise definition of renewable hydrogen is

uncertain. A long-term solution for national electricity systems, which

achieves status as close to 100 per cent. RE-based, should also be included

in the Commission's proposal for VEIII, and thus also in GBER.

Art. 1 (7)

–

Extension of the TAM registration obligation

According to the current rules, Member States must publish a serie of

information on each individual granting of aid above EUR 500,000 on a

central state aid website - the so-called TAM (Transparency Award

Module), cf. the GBER art. 9 (1) (c). This limit will be reduced to EUR

100,000, if the amendments are adopted.

While the Danish Government welcomes the increased transparency of

granted aid that the amendment will entail, it is noted that such amendment

is expected to lead to increased administrative costs for the Member States

and businesses. Potentially, this might make the GBER less attractive to

apply.

Art. 1 (21)

–

Investment aid to environmental protection, including climate

protection

In the draft proposal, a provision is added to Art. 36 (1)(a), stating that:

“

This Article shall also not apply to investments in equipment, machinery and

industrial production using fossil fuels, except those using natural gas.”

We are concerned that the provision may slow down the development of

good environmental projects, e.g. in areas where it is not yet possible to

operate installations with green energy (e.g. shipping), or where the current

use of fossil fuels is completely independent of the main purpose of the

project, such as optimization of the use of resources in the context of

circular economy. The above is unfortunate, as it will cause distortion in

the development of new environmental technology, which then only can

take place in areas, where the energy supply is already green.

More specifically, we have a challenge with the general exemption of

‘

investments in equipment, machinery and industrial production using fossil

fuels, except those using natural gas’

in art.

1(a), in the context of our Eco-

Innovation Program (MUDP). The program is

–

under the GBER - financially

supporting demonstration projects, and these demonstration projects might be

using a fossil fuel other than natural gas. Looking at the history of the

supported projects, for example projects cleaning air pollution from ships,

where non-fossil fuels are not yet available, would not be possible, despite

high eco-innovation of the projects and importance to reduce air pollution from

shipping. Another example is resource efficiency in the context of circular

economy, where a demonstration project is integrated into an existing

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production processes with a fossil fueled energy supply, but the demonstration

element itself is completely indifferent to actual the fuel type. In both cases

the proposed GBER exemption of fossil fuels would halt the demonstration

projects and their eco-innovation value.

Thus, in some areas it will not be possible to support important efforts that,

for example, support the transition to a circular economy (e.g. facilities that

enable the recycling of waste or tributaries) or the use of technology that

reduces pollution where fossil fuels some time will be the only option.

We agree that we must move away from the use of fossil fuels, but there

should be no restrictions on the granting of state aid for the development

and demonstration of solutions that reduce pollution through the use of

fossil fuels or optimize resource processes in principle independent of the

energy source.

A solution may be to exclude development and demonstration activities

from the para. 1a requirement - or find an alternative way to promote the

shift away from fossil fuels. This could be done with a simple add-on to the

proposal: “

This Article shall also not apply to investments in equipment,

machinery and industrial production using fossil fuels, except those using

natural gas and for demonstration purposes.”

Art. 1 (28) (e)

–

Investment aid to energy from i.a. renewable energy

sources

According to the current rules, the eligible costs of investment aid to

promote energy from renewable energy sources are the difference between

the investment costs of the project being supported and the investment costs

in the counterfactual scenario where no state aid is granted, cf. the GBER

Art. 41 (6). The aid intensity according to the applicable rules is 45% of the

eligible costs, cf. art. 41 (7) (a). If the proposed changes are adopted, the

method of calculating the eligible costs will be changed so that the eligible

costs are instead all the investment costs - regardless of the counterfactual

scenario. However, the aid intensity is reduced to 30% of the eligible costs.

The Danish Government welcomes the simplification of the method for

calculating the eligible costs.

However, it is important to ensure that the simultaneously proposed lower

aid intensity does not entail that it generally becomes less attractive to carry

out eligible projects using the new rules.

Art. 1 (29) (c)

–

The opportunity to grant operating aid

According to the current rules, it is possible to grant operating aid without

a competitive tendering procedure for wind energy if the projects receiving

aid concern plants with an installed capacity of a maximum of 6 MV or

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installations with less than 6 production units. If the proposed changes are

adopted, it will no longer be possible to allocate operating aid to major

projects without a competitive tendering procedure. The provisions that are

proposed to be deleted (art. 42, paragraphs 8, 9 and 10) are currently

applied to provide support for the test turbines at the two national test

centers in Høvsøre and Østerild.

Art. 1 (31)

–

aid to energy-intensive companies

The Commission proposes an amendment to the existing GBER, cf. art. 44,

namely that GBER should include specific requirements for aid to energy-

intensive companies. Such amendment to article 44 will indirectly limit the

possibility for Member States to design and adopt energy taxes.

In order to avoid tensions with the ongoing negotiations on the revision of

the Energy Tax Directive (directive 2003/96 EF) (ETD), the Danish

Government recommends that such revision of GBER art. 44 awaits the

outcome of these negotiations.

The purpose of the revision of the ETD is to reflect the EU's climate and

energy/y policy frameworks or the EU's legal commitment to an at least

55% reduction in greenhouse gas emissions by 2030 and a climate-neutral

continent by 2050. These objectives are similarly of a very high priority of

the Danish government, and in this respect, we find it to be crucial to ensure

coherence between the ETD and the relevant framework of State aid

(including the GBER).