Commission authorises state aid for environmental projects
The European Commission has ruled that there is no contradiction between competition policy and environmental policy, thus leaving the way clear for state aid in favour of the environment. The new framework includes a positive approach to aid for renewable energy and specific provisions for SMEs (small and medium-sized enterprises). The subsidy rate for renewable energy and energy saving investments has been increased from 30 to 40 per cent, with an additional 10 per cent bonus for SMEs, firms in assisted regions and projects which serve an entire community, such as an island. Operating aid is also available, and divided into four categories: -compensation for the difference between the production costs of renewable energy and the market price of electricity until the plant has been fully depreciated -recourse to market mechanisms -compensation for 'external costs' avoided -normal operating aid. SMEs will be able to benefit from aid to investment to adapt to the new Community standards, a departure from the general principle whereby the law cannot provide justification for granting aid.