EU: ECJ confirms that purely national promotion of green electricity does not necessarily violate EU law

The European Court of Justice (ECJ) ruled at the start of July 2014 that individual EU member states are allowed to establish renewable energy support schemes that provide for the awarding of tradable green certificates to producers of green electricity solely with respect to the green electricity produced on the territory of that state. The fact that the national promotion scheme could possibly impede electricity imports from other member states is justifiable on account of climate change prevention and environmental protection. Thus, no violation of article 34 of the Treaty on the Functioning of the European Union (TFEU). The ECJ ruling might present a setback for the supporters of a harmonised, EU-wide (common) system of renewables support schemes.

The ECJ ruling of 1 July 2014 may have a major impact on the ongoing political discussions about the meaningfulness of national green electricity promotion schemes. In the case at hand, the ECJ had to decide on the Swedish green electricity certificate scheme (GECS), which provided for the awarding of green certificates to approved producers for each megawatt-hour of green electricity generated. According to the Swedish GECS, the awarding of green certificates is limited to green electricity production installations in Sweden. This stipulation was why a Finnish company operating a wind farm in Finnish waters but connected to the Swedish power grid was not able to benefit from the Swedish GECS. The competent national authority in Sweden rejected the wind-farm operator’s application to be considered an approved producer of renewable energy in accordance with the GECS. This national decision was appealed by the Finnish wind-park operator on the grounds that Sweden’s support scheme violated core ‘free movement of goods’ principles and, specifically, the provisions of article 34 TFEU to the extent that only producers of renewable energy located in Sweden could benefit and imported renewables were excluded or discriminated against. The matter was referred to the ECJ in December 2012…

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