On 10 May 2016, the General Court of the European Union ("Court") handed down a judgment in a case concerning the German law on renewable energy of 2012 (the Erneuerbare-Energien-Gesetz 2012 - "EEG 2012") (case T-47/15, Germany vs. Commission).

The EEG 2012, which was replaced by a new law in 2014, laid down a scheme to support firms producing electricity from renewable energy sources and mine gas ("EEG Electricity"). Network operators at all voltage levels were obliged to buy EEG Electricity at a price determined by law, which was higher than the market price. This electricity was then resold to the transmission system operators ("TSOs"). The TSOs had to sell the EEG Electricity on the spot market of the electricity exchange. If the selling price did not cover the financial burden resulting from the purchase obligation, the TSOs were entitled to impose an "EEG Surcharge" on their supplies to the final customers. In practice, therefore, the EEG Surcharge was borne by the final customers. However, specific firms, such as energy intensive manufacturers, were eligible for a cap on this (passed on) surcharge in order to be able to maintain their international competitiveness.

In its decision of 25 November 2014, the European Commission ("Commission") found that: (i) the support for firms producing EEG Electricity constituted compatible state aid, and (ii) the reduction in the EEG Surcharge for specific electricity-intensive manufacturers constituted state aid which was for the most part also compatible with EU law. Even though the Commission had largely approved the aid, Germany brought an action for annulment of the Commission decision before the Court.

Germany contested the Commission's finding that the EEG 2012 involved state resources. In support of its position, Germany referred to the judgment of the Court of Justice of the European Union ("ECJ") in PreussenElektra (case C-379/98, PreussenElektra v Schleswag) in which the ECJ had held that the previous German law on renewable energy did not constitute state aid because no state resources were involved.

However, the Court rejected Germany's argument. According to the Court, the Commission was correct in taking the view that the EEG 2012 involved state resources, since, first, the funds generated by the EEG Surcharge and administered collectively by the TSOs remained under the dominant influence of the public authorities. Second, the amounts in question, generated by the EEG Surcharge, were obtained by means of charges ultimately imposed on private persons and which could be assimilated to a levy whose revenue was allocated to the financing of the aid. Third, it followed from the powers and tasks given to the TSOs that they did not act freely and on their own behalf, but as administrators of aid granted through state funds.

As regards the PreussenElektra judgment, the Court stressed that the EEG 2012 was substantially different from the previous German law. Unlike the EEG 2012, the funds at issue in that case could not be considered to be state resources since they were not at any time under public control and there was no mechanism, established and regulated by the state, for offsetting the additional costs arising from the obligation to purchase the electricity.

The Court also rejected all other arguments which Germany had put forward to have the Commission's decision annulled. Accordingly, the Court dismissed the action in its entirety.

This case is interesting as it applies the criterion of state resources to a case very similar to a landmark case on this subject, i.e. the Preussen Elektra case. It shows which facts can lead the Commission and the Court to reach a different conclusion.

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