EU GENERAL COURT ANNULS BIOMETHANE SUBSIDY SCHEME AND REQUESTS REVIEW OF MARKET EFFECT OF CROSS-BORDER CUMULATION OF SUBSIDIES
December 22, 2022
Success for fair competition on the European biomethane market: The EU General Court annuls the decisions of the EU Commission on the Swedish biomethane support scheme, due to non-consideration of a potential distorting effect on competition.
The EU General Court ruled: The decisions of the EU Commission of 29 June 2020 on Swedish biomethane subsidy scheme do not comply with European law. The EU Commission failed to evaluate and consider the effect resulting from a cumulation of the Swedish subsidy with subsidies granted by other EU Member States (Case T-626/20 – Landwärme v Commission).
Landwärme, one of the leading biomethane traders in Europe, took legal action against the EU Commission's approvals of Swedish biomethane state aid scheme. The Swedish scheme allows for a combination of the aid granted by Sweden with support granted by other EU Member States. In the view of Landwärme, this cumulation of multiple subsidies may lead to an overcompensation and a distortion of competition. This effect occurs, for example, when subsidized Danish biomethane is imported to Sweden, as acknowledged by various stakeholders.
"A fair competition must be ensured by the EU Commission. The EU Commission is currently turning a blind eye on an obvious possibility of distortion of competition. From our point of view, the EU Commission was obliged to take into consideration the interplay of the Swedish and the Danish biomethane support schemes during the approval process. We have informed the EU Commission of this issue before it approved the Swedish scheme. Therefore, we welcome the EU General Courts’ clarification that the EU Commission has to consider the competitive effects resulting from the interplay between subsidy schemes of multiple EU Member States.", Zoltan Elek, CEO of Landwärme comments.
Landwärme has always been committed to creating an integrated European market, where biomethane can flow freely. Nevertheless, fair market conditions are crucial to the joint efforts of supplying the renewable gas needed and boosting biomethane production as targeted by the REPowerEU Plan.
Zoltan Elek adds: “By allowing double subsidization, until now, Swedish taxpayers did not always receive real green value. Whilst the aid is funded by their taxes, the subsidized biomethane can only be credited to the Danish climate statistics.”
The EU General Court’s decision can be appealed before the Court of Justice. Whether an appeal will be filed remains to be seen.
For further information, please contact
Gabor Maifeld | Head of EU Relations | netzwerk@landwaerme.de
About Landwärme
The Landwärme group is one of the leading biomethane traders in Germany and Europe. We supply hundreds of energy providers and public utility companies with biomethane for use in power, heating, and transportation. The company was founded in 2007 with its headquarters in Munich and branch offices in Berlin and Dortmund, Germany as well as in Budapest, Hungary. More information at: www.landwaerme.de