EU sets rules to allow more state aid for green projects

BRUSSELS, December 21 (Reuters) – EU countries will be allowed to inject more money into green projects in the areas of climate, energy and the environment, while state support to fossil fuels is unlikely to be approved by Brussels, the European Commission said on Tuesday.

The Commission, which reviews state aid from national governments to check that it does not distort competition in the EU’s single market, has set out improved competition rules to help countries meet their targets by climate change.

The EU aims to reduce its net greenhouse gas emissions by 55% by 2030 from 1990 levels and eliminate them by 2050. This will require huge low-carbon investments, including including additional investments in the energy sector of 350 billion euros ($ 395 billion) per year this decade.

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“Although a significant share comes from the private sector, public support will play a role in ensuring that the green transition happens quickly,” said EU competition chief Margrethe Vestager.

The new rules expand the areas in which countries can offer support, including clean transport, energy efficiency in buildings and nature protection.

Aid can cover up to 100% of the financing gap for green projects, including through measures such as carbon contracts for the difference, which would guarantee a carbon price to a project developer, regardless of the situation. price on the EU carbon market.

Support for fossil fuels such as coal and oil is unlikely to be approved, while new investments in natural gas must be compatible with EU climate targets and help countries move away from fuels higher emissions, the Commission said.

Brussels has also set guidelines on how countries can support the closure of coal, peat and oil shale plants.

EU competition authorities are investigating Germany’s plan to pay € 4.35 billion in compensation to utilities RWE and LEAG to speed up the phase-out of lignite coal-fired power plants. Brussels said it was concerned about whether compensation for lost profits was the minimum payment under EU rules.

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Reporting by Kate Abnett; Editing by Philip Blenkinsop and Alison Williams

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