EU/Competition: Energy

Newsletter 11/2020

The Norwegian Competition Authority (NCA) closed 15.10.20 an investigation against Circle K Norge AS and YX Norge AS. The two companies have agreed by way of commitments to end their practice of publishing recommended list prices for retail fuel on their websites. The NCA launched an investigation against Circle K and YX in the Autumn of 2019 due to concerns that Circle K and YX cooperated on setting retail fuel prices. In particular, the NCA was concerned that the publishing of recommended list prices facilitated parallel national lifts on pump prices. The NCA found that such behavior could be in breach of the prohibition against anticompetitive agreements and concerted practices in Section 10 of the Competition Act. Circle K and YX do not share the Competition Authority’s competition concerns, but have nevertheless committed to refrain from publishing recommended list prices for retail fuel on their websites. Both Circle K and YX chose to end this practice before the commitments were made binding by the adoption of the Authority’s decision on 15.10.20.

According to the Commission, roughly 75% of the building stock is energy inefficient, yet almost 85-95% of today’s buildings will still be in use in 2050. Thus, renovation of public and private buildings has been singled out in the European Green Deal as a key initiative to drive energy efficiency. To pursue this ambition the Commission published 14.10.20 a new strategy to boost renovation called “A Renovation Wave for Europe – Greening our buildings, creating jobs, improving lives“. The strategy will include the following lead actions: (i) Stronger regulations, standards and information on the energy performance of buildings to set better incentives for public and private sector renovations, including a phased introduction of mandatory minimum energy performance standards for existing buildings, updated rules for Energy Performance Certificates, and a possible extension of building renovation requirements for the public sector; (ii) Increasing capacity to prepare and implement renovation projects, from technical assistance to national and local authorities through to training and skills development for workers in new green jobs; (iii) Expanding the market for sustainable construction products and services, including the integration of new materials and nature-based solutions, and revised legislation on marketing of construction products and material reuse and recovery targets; (iv) Creating a New European Bauhaus, an interdisciplinary project co-steered by an advisory board of external experts including scientists, architects, designers, artists, planners and civil society. The Commission will issue guidance on the Energy Efficiency First principle in early 2021 to assist public authorities in properly take into account all costs and wider benefits of the investments in the built environment, which could be practically applied in public procurement. Given the limited scope of existing legislative requirements for renovation of public buildings, the Commission will propose by June 2021 the need to extend the scope of the requirements to all public administration levels and to increase the annual renovation obligation as part of the revision of the Directive 2012/27/EU on energy efficiency (EED). The Commission will also develop comprehensive guidance on sustainable public investments through procurement. Moreover, by June 2022, the Commission will look into the possibility to develop green public procurement criteria for public buildings such as office buildings and schools related to life-cycle and climate resilience and based on Level(s). Level(s) is a common European approach to assess and report on the sustainability of buildings. Using existing standards, the voluntary Level(s) framework provides a common language for building sustainability, which other initiatives can also use. Within the Level(s) framework, each indicator is designed to link the individual building’s impact with the priorities for sustainability at a European level. This focuses the Level(s) user on a manageable number of essential concepts and indicators at building level that contribute to achieving environmental policy goals. Visit the renovation wave web page here.

By a decision of 05.10.20 the EIB provides MEUR 47 loan to Swedish battery tech company Nilar International AB with backing from the EU’s InnovFin “Energy Demo Projects” guarantee programme. This loan will support the expansion and upgrading of Nilar’s manufacturing lines at its facility in Gävle over the coming years, as well as boost its R&D in order to demonstrate commercial viability of technology. Nilar produces batteries that can be used by homeowners and industrial customers to power their buildings or charge electric vehicles with stored renewable energy (e.g. from rooftop solar panels). The support of InnovFin’s “Energy Demo Projects” window will help Nilar to rapidly commercialise its battery production and achieve further cost reduction through scale. Visit the case dossier here.

Since May 2012, the Commission has implemented a major reform of EEA State aid rules: the State Aid Modernisation package. The Commission published 30.10.20 a Commission Staff Working Document summarising the results of an evaluation of the State aid rules. The exercise covered the following rules: (i) General Block Exemption Regulation (GBER), (ii) De minimis Regulation, (iii) Guidelines on regional State aid, (iv) Framework for State aid for research and development and innovation (RDI), (v) Communication on important projects of common European interest (IPCEI), (vi) Guidelines on State aid to promote risk finance investments, (vii) Guidelines on State aid to airports and airlines, (viii) Guidelines on State aid for environmental protection and energy and (IX) Guidelines on State aid for rescuing and restructuring. In addition, it also covered the Railways Guidelines from 2008 and the Short term export credit Communication from 2012. Those rules were not revised as part of the State Aid Modernisation, but an evaluation was relevant in the light of developments in EEA law and the Commission’s case practice. The “fitness check” concludes that, overall, the State aid rules under scrutiny are broadly fit for purpose. However, the individual rules need revisions, including clarifications, further streamlining and simplification, as well as adjustments to reflect recent legislative developments, current priorities, changes in markets and technology developments. By way of example, in line with the outcome of the evaluation, the Commission will propose to clarify and simplify the practical application of certain provisions, such as how to calculate in a simplified manner indirect eligible costs for research & Development projects. As regards IPCEIs, in view of the special role that SMEs play in the economy, and considering that State aid to SMEs is less likely to distort competition and affect trade between EEA countries, it may be appropriate to facilitate SMEs’ participation in IPCEIs, both directly and indirectly. The “fitness check” also revealed that compatibility rules on regional aid worked fairly well, but needed streamlining and clarification of some concepts. The “fitness check” shows that the environmental and energy rules have so far facilitated a more effective and less distortive deployment of state resources to improve environmental protection and achieve the objectives of the Energy Union. However, they need to be further adjusted in light of new technologies and novel support types, as well as recent environmental and energy legislation. The rules also need to be aligned to future challenges. In particular and according to the Commission, state aid should contribute even further to the European Green Deal, as well as to the EU’s Digital and Industrial Strategies. In particular, the revision of the energy and environmental rules will have to facilitate appropriate measures further promoting a modern decarbonised and circular economy, while ensuring limited distortions of competition and adequate safeguards to the integrity of the single market. The Commission plans to anticipate the review of the relevant State aid guidelines to the end of 2021. These include the Regional aid Guidelines, IPCEI Communication, RDI Framework, Risk Finance Guidelines, Environmental and Energy Guidelines and relevant provisions of GBER. The other rules that were part of the “fitness check” will be revised in the medium term. Public consultations on these rules are taking place between the second half of 2020 and the beginning of 2021. Visit DG COMP’s web page on the fitness check here.