EU targets energy subsidies

The European commission confirmed it had initiated an investigation of the German system of partly subsidizing electricity consumption in the corporate sector, amid suspicion that the practice might run afoul of the bloc's state aid rules.

Brussels said it had received many complaints from both consumers and competitors following a 2012 reform in Germany that established a surcharge for the financing of renewable energy sources, with energy-intensive industries enjoying hefty reductions.

"These reductions could give the beneficiaries a selective advantage that is likely to distort competition within the internal EU market," the Commission said in a statement.

Tough decision ahead

The EU executive said it would also scrutinize a measure allowing a reduction when suppliers gain half of their electricity from renewables, which it said might possibly result in "discriminatory taxation."

The launching of the probe means all sides concerned, including the German government and representatives from companies currently enjoying surcharge reductions, will have ample opportunity to state their case in defense of the measures in place.

Energy-sector reforms are currently under way in a number of EU member countries. Brussels is faced with the daunting challenge of striking the right balance between ensuring fair competition across borders without nipping in the bud attempts to foster renewables with a view to meeting the bloc's ambitious climate protection targets.

hg,tj/kms (dpa, AFP)