* EU probes green tax caps for French energy-intensives
* Uniden lobby says competitive position already strained
* EU clears French support for onshore windmills
(Adds Uniden lobby comment, EU comment, background)
By Foo Yun Chee and Michel Rose
BRUSSELS/PARIS, March 27 European Union
antitrust regulators are investigating whether green tax
reductions granted by French authorities to energy-intensive
users give the companies an unfair advantage.
France, which wants to boost the share of renewable energy
to 23 percent of its energy mix by 2020 from the current 15
percent, subsidises renewables with a tax called CSPE levied on
consumers through their power bills but partially exempts
Large industrial companies, which use at least 7 gigawatts
per year, pay a reduced rate up to 0.5 percent of their annual
value added and have their CSPE tax capped at 550,000 euros
(indexed) per facility per year.
The European Commission said on Thursday such exceptions may
breach EU state aid rules.
"The possibility of such reductions is not foreseen under
the 2008 Guidelines on Environmental Aid which are currently
applicable," the EU competition watchdog said in a statement. It
can order EU governments to recover illegal aid.
Uniden, the French lobby for energy-intensive industries,
said the Commission inquiry focuses on the legal formulation of
the tax rebates, not the principle.
The Commission "is not questioning the principle of reducing
the extra costs linked to renewables for energy-intensive
industries", a Uniden spokesman said, adding that this kind of
aid exists in several countries.
He said the CSPE cap is vital for those industries and that
their competitive position would be hurt if they had to bear the
full cost of renewables subsidies.
The French energy ministry declined to comment.
The Commission probe comes three months after it opened an
investigation into Germany's industrial discounts on green
energy surcharges to energy-intensive industries, concerned that
these may distort competition.
The Commission also said it expects to adopt new guidelines
on state aid in the fields of energy and environment for
2014-2020 and that, among other things, the new guidelines
envisage that member states could partially relieve
energy-intensive firms from financing renewable energy
Asked why the Commission would want to open an investigation
less than a month before the applicable legislation might
change, a spokeswoman said the Commission must work under
legislation that is currently applicable.
Competition specialists say new EU rules do not stop the
Commission from going after companies or EU governments for past
wrongdoing and that, since the CSPE was introduced in 2007,
there is plenty of scope for the EU to find illegal state aid.
Separately, the Commission also cleared a French aid scheme
for onshore wind power involving a new feed-in tariff decree.
The Commission said it had concluded that the French scheme
is compatible with EU state aid rules: under the scheme,
producers of renewable energy are compensated for additional
production costs in line with EU guidelines, and do not receive
overcompensation, it said.
"Wind sector professionals at the SER have greeted with
relief the conclusions of the notification procedure. The wind
support mechanism is now secure according to European union law,
which will kick off a recovery in new added capacity this
year," France's SER renewable power lobby said in a statement.
The French wind power sector is now waiting for France's top
administrative court to cancel the old feed-in tariff decree,
which had not been notified to the European Union as state aid
as it should have been.
France's failure to follow this procedure provided a basis
for a pressure group opposing onshore wind power, Vent de Colere
(Wind of Anger), to challenge France's preferential tariffs for
wind energy in 2011 in a French court.
Legal uncertainty over the tariffs, which forced utility EDF
to buy wind-generated power at above-market costs, has
paralysed investment in the French wind sector since 2011.
(Additional reporting by Marion Douet and Geert De Clercq;
Writing by Foo Yun Chee and Geert De Clercq; Editing by William
Hardy and Dale Hudson)