EU to rule on German fuel surcharge exemptions by end-July-source

BRUSSELS Wed Feb 12, 2014 9:28am EST

BRUSSELS Feb 12 (Reuters) - EU regulators will decide by the end of July if ThyssenKrupp, BASF and other German heavy energy users must repay billions of euros in a fuel surcharge they were exempt from, a person close to the matter said on Wednesday.

Germany is seeking to shift from fossil fuels and nuclear power to green energy, but has shielded its industry from helping paying for the transition by exempting companies from a surcharge on fuel that ordinary consumers have to pay.

Around 2,000 companies benefit from the exemption, worth 4 billion euros ($5.47 billion) in 2013 and 2.72 billion euros in 2012. These are expected to rise to 5.1 billion euros this year.

In December last year, the European Commission launched an investigation into the exemptions, saying it was concerned that they could go against the EU's laws on state aid to companies.

The EU executive can order EU governments to recover subsidies it finds they are illegal.

The EU state aid regulator, which aims to have a ruling before the EU institutions' August break, is yet to conclude if the exemptions are legal or not.

The person said the decision will cover exemptions granted in 2012 and 2013.

The German case will be examined under updated EU rules on energy and environment issues which the Commission is expected to adopt in April.

Under the new state aid guidelines outlined late last year, the Commission has said costly subsidies should be phased out.

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