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BRUSSELS (Reuters) - EU authorities are negotiating with the German government to try to make its new green energy law compatible with European Union legislation and a solution is possible this month, the bloc's competition chief said on Thursday.
A ruling from the EU's highest court on Tuesday raised hopes in Germany that the revamped renewables legislation - which shelters the country's heavy industry from the cost of funding green energy - was already in line with EU law.
But Competition Commissioner Joaquin Almunia said that was not the case, because imported energy had to be treated in the same way as domestically produced fuel.
"Imported electricity cannot be given discriminatory treatment," Almunia told reporters. "We need to find with the German authorities a good way to eliminate our concerns."
The European Commission, the EU executive, announced late last year it was launching a full investigation into Germany's renewables law.
That inquiry is likely to be very lengthy and Almunia said he had not ruled out that German heavy industry would have to pay back subsidies it received under that regime, although he did not give any figures.
Finding a solution to the European Commission's problems with the revised German green energy law should be quicker, and Almunia said it was possible it could be achieved before the Commission's summer break, which begins on Aug. 1.
He added, however: "It's not in my hands."
The issues at stake are technical and concern the extent to which subsidies are allowed for green energy, as well as how to prevent discrimination against imported renewable energy.
Tuesday's ruling from the EU's top court found Sweden's renewable support scheme to promote national green power was compatible with EU law, even though Sweden had refused to provide support for non-domestic green power.
German Economy Minister Sigmar Gabriel welcomed that ruling, saying it had removed any lingering EU obstacles to Berlin's renewable energy law.
Almunia said he was taking it into account, but it was distinct from the situation in Germany, where green power is being imported and treated differently from domestically produced green energy because of the way levies are distributed.
Germany, Europe's biggest electricity market, shares borders with nine countries and is a net exporter of electricity, although it imports some green energy, which Almunia estimated at less than 10 percent of the total.
Renewable power in Germany has become a political battlefield as heavy industry, which uses very large amounts of power, some of which it produces itself, says it will cease to be competitive if it has to contribute as much as other users to subsidizing development of renewables.
"When there is a national problem, it is very easy to blame Brussels," Almunia said.
Additional reporting by Vera Eckert in Frankfurt; Editing by Dale Hudson and Mark Potter