EU may allow more state aid to boost green projects

FILE PHOTO: Executive Vice President of the European Commission Margrethe Vestager addresses the media during a joint statement with German Economy Minister Peter Altmaier (not pictured) prior to the "European Competition Day" at the German Economy Ministry in Berlin, Germany September 7, 2020. Michael Sohn/Pool via REUTERS/File Photo

BRUSSELS (Reuters) - European Union governments may be allowed to grant more state aid to projects that help the bloc achieve its climate goals, Europe’s antitrust chief Margrethe Vestager said on Tuesday, calling such an incentive a “green bonus”.

In contrast, polluting factories or power plants may be rebuffed when they seek state aid, she said.

Vestager’s comments underscore the European Commission’s efforts to cut greenhouse gas emissions by at least 55% by 2030, both to fuel an economic recovery from the COVID-19 pandemic and meet the goals of the Paris climate agreement.

Vestager said one example that might qualify for a green bonus could be state funded building projects that use recycled materials.

“We could think of giving a sort of ‘green bonus’, which allows governments to use more state aid for projects that make a genuine contribution to our green goals,” she told an event organised by European Parliament liberal group Renew Europe.

“We could also look at how to build on the success of competitive tenders in keeping renewable energy costs down, by seeing if we could extend that approach to other areas,” she added.

At the same time, “we might refuse to approve aid that would harm the environment, or would keep polluting factories or power plants operating,” Vestager said.

She plans to kick off a consultation in the coming weeks on how competition rules and sustainability policies work together, culminating in a conference early next year.

Reporting by Foo Yun Chee; Editing by Mark Potter