German green energy law probe

The European Commission was about to launch an official probe into industry exemptions from Germany's green energy laws on grounds that they break EU competition rules, the news magazine Der Spiegel reported Sunday.

Under German law, energy-intensive industries such as steel, chemicals and automotive may be granted exemptions from fees on electricity charged by the state to finance the country's buildup of renewables.

The exemptions, which are currently being granted to about 2,000 companies, had moved into the focus of the EU regulators because they might be considered illegal state subsidies, Der Spiegel reported.

After lawyers in Brussels had looked at the law, Competition Commissioner Joaquin Almunia concluded it broke EU rules, Der Spiegel reported without citing sources. The Commission will announce the launch of official proceedings on Wednesday, according to the magazine.

If the Commission were to rule against Germany, the green energy law would be banned and companies would likely face back payments in the tens of millions of euros.

Fewer consumers foot higher bills

The number of German firms that have applied to be exempt from the levy has tripled within the past two years, meaning their share has been spread among other consumers.

Germany's opposition Greens criticized that the government was too lenient, granting exemptions to firms that were not energy-intensive and did not face strong international competition - two primary conditions for waiving the fee.

On Friday, the Greens energy policy spokesman said the government was expanding the number of privileges rather than cutting back on them.

On Sunday, Chancellor Angela Merkel said she was aware of the concerns in Brussels, reiterating her determination to change the law if re-elected in September.

In an interview for ARD public television, Merkel urged the leaders of Germany's federal states to cooperate on changes aimed at reining in renewables subsidies.

uhe/mkg (AFP, dpa, Reuters)