State Aid and Article 7 of the Energy Efficiency Directive

This review offers overview on how State aid policies are defined on EU level regarding the energy efficiency measures implementation.

The emphasis is on the implementation of EEOS and alternative measures under Article 7 EED and the State Aid regulation. Cases from partner countries are presented and discussed.

The short report is available here.

State aid is defined as the financial aid or financial intervention from the Member State to the specific market actor (undertaking), which puts the undertaking in an advantage when compared to the sectoral competitor.

This includes aid from regional government, national and international aid, and EC funding (mainly ESIF-European structural and investment funds, since it is co-managed by MS and the EC). Hence, if there is a third party involved in the aid, it can be considered as State aid only if the State is in a situation where it can influence the flow of the financial resources.

To define something as state aid, several conditions have to be fulfilled:

• The State is the one involved in the intervention or its resources are used
• The intervention gives the receiver the advantage when compared to other competitors
• Competition is influenced: either it is distorted or there is a chance it could be,
• This aid can affect any kind of trade between MSs. (The criteria are cumulative.) This means that the undertaking is treated in a way that is not common in economic relations and can include not only financial aid, but also provided aid in any other form (for example, free trainings or expert help from the providers financed by the MS).

Although it is considered as distortive factor for the competition and trading relations between member states, there are exceptions where State aid is allowed. It could be either defined as “de minimis” or as acceptable due to its purpose.

One additional fact must be taken into account. If the undertaking is considered SGEI (Service of general economic interest), it is subject to different framework and different thresholds. These are, for example, services of public education or public health services.

Authors: Ivana Rogulj, IEECP – Serafeim Michas, UNIPI and Zois Katiforis, UNIPI