EU Probes Germany’s Environmental-Tax Cuts Over Aid Concerns

The European Union will review German discounts on environmental taxes amid concerns the aid to companies that consume high volumes of energy may be illegal.

“The current state aid guidelines do not foresee the possibility of such reductions,” the European Commission said today in an e-mailed statement. “At the same time, the commission considers that under certain conditions, reductions on the financing of renewable electricity may be justified for energy-intensive users in order to prevent” companies from relocating abroad.

The EU regulator’s probe will aim to determine whether the discounts, which exempt companies from paying the full fee to finance Germany’s renewable expansion under the EEG clean-energy law, are proportionate and do not unduly distort competition.

Separately, the commission presented draft guidelines for energy and environmental state subsidies and invited industry comments. It sought views until Feb. 14 on the measures.

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