GoOs and the compatibility of national support schemes with Art. 34 TFEU in the light of the PreussenElektra Judgment

1

In March 2001, the ECJ ruled case C-379/98 concerning, among others, the compatibility of the German support scheme for national renewable energy (i.e. the “Law on feeding electricity from renewable energy sources into the public grid”, of December 1990, as amended at that time) with Art. 30 of the EC Treaty (now Art. 34 TFEU). Such Law established the obligation upon electricity supply undertakings to purchase electricity produced from renewable sources within their respective supply area

  (the particularities of that statute are beyond the scope of this commentary thus, for our purposes, such obligation will be considered as referring to renewable energy produced in Germany). 
For reference purposes, Article 34 of the TFEU reads as follows:

“Quantitative restrictions on imports and all measures having equivalent effect shall be prohibited between Member States.”

That Article covers any national measure, which is capable of hindering, directly or indirectly, actually or potentially, the internal market (a more detailed analysis of such Article is beyond the purpose of this commentary)

. The ECJ ruled that the German support scheme (or other national schemes of the type) was capable, at least potentially, of hindering the internal market, but that still it was in conformity with (now) Article 34 of the TFEU.

The main reasons given by the ECJ to support such compatibility may be synthesized as follows

: i) environmental protection requirements shall be considered when implementing European policies; ii) the use of renewable energy, promoted by the German statute, is beneficial for the environment as it contributes to the reduction of greenhouse gases 8; iii) the electricity market is still not fully liberalized; and iv) a system that allows for a reliable and possible (in practice) trade of electricity produced from renewable sources requires a system of certificates of origin recognizable by all MS 9. 

2

As GoOs are a system of certificates of origin recognizable by all MS, the question may arise as if the reasoning the ECJ used in the above-mentioned case is still applicable. Sufficient elements exist to construct that such reasoning is still valid (and might even have a stronger argumentative support) as: i) on the one hand, GoOs serve to promote renewable energy, therefore environmental protection (see section 3 above); and ii) on the other, the Renewable Energy Directive clearly states that the sole and exclusive purpose of GoOs is to serve as proof to the final customer (see section 2 above), so there is no obligation for MS to use them when implementing support schemes for renewable energy (in other words, GoOs are a system of certificates of origin but not for purposes of integrating national support schemes).

The aforementioned interpretation is possible even considering that in terms of Art. 15

4

MS shall recognize GoOs issued by other MS, among others, as proof of the energy source from which energy was produced. This is so, as:

i) In accordance with Article 3 [3], last paragraph of the Renewable Energy Directive, MS have the right to decide to which extend they support energy from renewable sources produced in other MS (it is a national competence);

ii) Recital [56] of such Directive, clearly states that GoOs do not by themselves confer a right to benefit from national support schemes; and

iii) Among others, as consequence of the above, the relevant market is not yet fully liberalized, as recognized in Recital [25] of the Directive:

“(25) Member States have different renewable energy potentials and operate different schemes of support for energy from renewable sources at the national level. The majority of Member States apply support schemes that grant benefits solely to energy from renewable sources that is produced on their territory… This Directive aims at facilitating cross-border support of energy from renewable sources without affecting national support schemes. It introduces optional cooperation mechanisms between Member States which allow them to agree on the extent to which one Member State supports the energy production in another and on the extent to which the energy production from renewable sources should count towards the national overall target of one or the other. In order to ensure the effectiveness of both measures of tar­get compliance, i.e. national support schemes and coop­eration mechanisms, it is essential that Member States are able to determine if and to what extent their national sup­ port schemes apply to energy from renewable sources pro­duced in other Member States and to agree on this by applying the cooperation mechanisms provided for in this Directive.”

5

Consequently, it is possible to conclude that GoOs do not affect the compatibility of national support schemes (that grant benefits solely to energy from renewable sources produced in the territory of the relevant MS) with Article 34 of the TFEU, as their purpose is not linked to such benefits, but restricted to “consumers’ information”.