BRUSSELS—Europe’s energy-intensive industries scored a victory this week in being largely let off the hook in footing the bill for the transition to an economy that uses less carbon dioxide.
The European Commission watered down some key parts of new rules on government aid aimed at encouraging production of energy from renewable sources, lessening the financial burden on heavy industries and reducing the scale of government subsidies for providers of renewable energy.
The new rules set tougher terms for government subsidies for energy sources such as wind and solar.
The commission, the EU’s executive body, said government subsidies for renewables have led to progress on environmental goals, but have also caused “serious market distortions and increasing costs to consumers”.
Bowing to intense lobbying pressure from industry, the commission also reduced—compared with its earlier proposals—the payments that chemical, glass, steel and other heavy-energy users will be expected to make into public funds to finance renewables.
Lobby groups have recently cranked up pressure on the commission to address concerns that Europe’s high electricity prices are making it impossible for heavy industry to remain competitive on the global stage. They say subsidies schemes for renewables are ramping up energy costs, at a time when they are plummeting in the U.S. thanks to the shale-gas boom.
Addressing those fears, the EU’s antitrust chief, Joaquín Almunia, said Europe “should meet its ambitious energy and climate targets at the least possible cost for taxpayers.”
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