EU Dings Austria, Poland Over Green-Energy Laws

(CN) - The lower EU court ruled that Austria's scheme to cap the price of renewable energy for energy-hogging businesses is illegal state aid, while an advisor to the high court dinged Poland for not implementing Europe's renewable-energy law at all in a pair of opinions issued Thursday.

Under the Renewable Energy Directive passed in 2009, European member states must achieve mandatory national targets for renewable energy by 2020. While the law set the targets for each nation, member states can choose how to meet their objectives.

With a target of 34 percent, Austria opted to change its green-electricity laws to allow renewable-energy providers to sell power to a clearinghouse, which then recouped its costs from public-grid customers via a surcharge and by selling the green energy to electric companies that passed their costs on to customers as well.

But amid fears that the higher costs would kill energy-hogging businesses' ability to compete internationally, Austrian lawmakers capped how much the businesses had to pay for green energy to .5 percent of their net profits in the previous calendar year. The European Commission found the exemption for energy hogs constituted illegal state aid that tampered with the internal market and competition.

Austria appealed the commission's finding to the General Court of the European Union, which dismissed the case on Thursday.

In an opinion which was not made available in English, the Luxembourg-based court agreed with the commission's assessment. Since the surcharge for green energy has been mandated by the Austrian government, partially exempting energy-intensive industries from paying it results in lost revenue and is therefore state aid, the court said.

Furthermore, Austria's law hands out the exemption selectively - only to energy-hogging businesses - while others are forced to pay the full surcharge for green energy. That skews competition and makes the government's help illegal, the court concluded.

Meanwhile, an adviser for the European Court of Justice found Thursday that Poland hadn't bothered to implement the Renewable Energy Directive at all - and also failed to inform the commission of when and how it would do so.

In his opinion for the high court - which was also not made available in English - Advocate General Melchior Wathelet said that while the commission had the responsibility to prove its case against Poland, the Polish government had an obligation to provide regulators with "clear and precise information" on how it planned to implement EU law.

Poland's dodge of the commission's request for information justified the opening of infringement proceedings, Wathelet said.

The adviser also rejected Poland's argument that it should avoid paying a penalty because it had implemented its green-energy law in 2013, well beyond the deadline set by EU lawmakers. In fact, Poland still has not fully implemented the renewable energy law even now, Wathelet said - and ordered the nation to pay a $76,000 daily fine until its laws are amended to comply with the directive.

Wathelet's opinion is not binding on the EU high court, which has begun its own deliberations in the case.

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