A Critical Analysis of Reductions from Environmental Taxes in the New Guidelines on State Aid for Environmental Protection and Energy, 2014–2020

Phedon Nicolaides

Energy & Environment, 2015, vol. 26, issue 4, 573-586

Abstract: The new guidelines on state aid for environmental protection and energy also allow aid in the form of reduction from green levies. The aid may be granted retroactively when green levies harm the competitiveness of heavy electricity users. This paper argues that the harmful impact of green levies may be exaggerated by the use of gross value added, while the necessity of aid and its proportionality are presumed rather than proven. The fact that a company or sector may suffer loss of competitiveness from bearing the full levy does not necessarily show that it needs a reduction up to the limit allowed by the guidelines. The actual reduction which is granted may be unnecessary and, therefore, it would constitute disproportional state aid.

Date: 2015
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Persistent link: https://EconPapers.repec.org/RePEc:sae:engenv:v:26:y:2015:i:4:p:573-586

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