Ruling on energy subsidies

EU member countries could not be forced to subsidize renewable energy from abroad the same way they would at home, the European Court of Justice in Luxembourg ruled Tuesday.

The decision came as a surprise to many as it did not follow an earlier recommendation of the ECJ's Advocate General who believed a clause in the EU's renewable energy directive contravened treaty rules on the free movement of goods across the 28-member bloc.

Finland-based Vindkraft launched legal action after the Swedish Energy Agency said in 2009 it refused to include a Vindkraft wind farm - hooked directly to the Swedish grid – in a national subsidy scheme for green energy.

Sigh of relief

Had the ECJ subscribed to the Advocate General's view, Germany would have had to adapt its own renewable energy law (EEG) accordingly since it effectively precluded non-domestic generation of green electricity from benefitting from subsidies.

With those subsidies also being paid through a surcharge on households, German taxpayers would have had to foot an even bigger bill for the already expensive shift to renewables.

But the court in Luxembourg said that while domestic subsidies were justified and vital for climate protection, individual nations could not be obligated to grant the same perks for energy generated abroad.

hg/rs (Reuters, AFP)