LANDWÄRME TAKES LEGAL ACTION ON STATE AID FOR BIOMETHANE
Landwärme GmbH, a leading German biomethane trader, is taking legal action against the European Commission’s approval of a Swedish state aid scheme for biomethane (Case T-626/20 – Landwärme v Commission). The combined effect of the Swedish tax relief for consumption and other EU member states’ such as Denmark’s production support, distorting the European biomethane market, is at the heart of the legal action.
Sweden has two parallel support schemes for biomethane: one for heating and one for fuel purposes. These were renewed in early 2020 and approved by the Commission on June 29, 2020. “Our action aims at having the latest renewal for the Swedish scheme redesigned. The current biomethane market in Scandinavia does not function properly, as both Swedish state aid systems allow for a combination with biomethane support scheme of other member states. This leads to an overcompensation when, for example, Danish biogas is imported to Sweden. Landwärme is asking for an overhaul of the rules, which would mean that the Swedish tax relief would exclude imported biomethane that has already received production support in its country of origin" said Zoltan Elek, CEO of Landwärme GmbH.
Sweden imported 1.8 TWh of biogas in 2019, two thirds of which were from Denmark. Sweden has a state aid scheme for biomethane which supports consumption through tax benefits. Denmark has a state aid scheme for biomethane supporting production. The combined effect is that biomethane produced in Denmark and utilized in Sweden is subsidized twice. Landwärme is convinced that this overcompensates the beneficiaries, distorts competition and constitutes a breach of European law.
“Due to this double subsidization, Swedish taxpayers are not receiving real green value for their money. Furthermore, the grant is handed out from the Swedish budget for biomethane, which can only be credited to the Danish climate statistics but cannot be credited to the Swedish climate targets.”, Mr Elek added.
Both Sweden and Denmark have always played an exemplary role in boosting the biomethane market. Thus, Landwärme believes that a minor correction of the current legal framework could solve the issue appropriately.
Landwärme has tried to convey this message to the Swedish government, inter alia through written submissions in stakeholder consultations earlier this year. However, the government has chosen not to act on the company’s comments, which has forced Landwärme to take legal steps in order to minimize the restrictive effect on competition and promote the European biomethane market.
For further information, please contact
Zoltan Elek | Chief Executive Officer | 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