EU/Competition – Legal Update
As of January 2022
On 21 December 2021, the EU Commission approved the new so-called CEEAG, namely the new Guidelines on State Aid für Climate, Environmental protection and Energy, which are supposed to be formally adopted and published in the Official Journal in early 2022 and applicable from that date. With a stronger focus on decarbonization and renewable energy, the new Guidelines are intended to help achieve the goals of the EU Green Deal in a fast, targeted, and affordable way. Accordingly, subsidies under the new Guidelines can be approved for all technologies that can contribute to the EU Green deal. For instance, the new CEEAG offer several new aid categories, the minimization of eligible sectors and the introduction of new instruments, such as Carbon Contracts for Difference (CCfDs).
The CEEAG are to be accompanied in 2022 by upcoming amendments to the General Block Exemption Regulation (GBER). Those GBER amendments shall globally approve, and grant exemptions from the notification and stand still obligations for State aid for investments in Green Technologies (H2, Carbon capture, etc.), resource efficiency, biodiversity, as well as for enhancing the energy performance of buildings, clean mobility-related infrastructure, etc. (Link)
On 6 December 2021, the EU Commission published its revised Guidelines on State aid to promote risk finance investments. These new Guidelines shall promote access to finance for start-ups, small and medium-sized enterprises (SMEs) and mid-cap companies and, thus, contribute to the recovery of the European economy and the EU Green Deal. The revised rules allow risk financing aid from EU Member States outside the scope of the General Block Exemption Regulation (GBER) to attract more investors in case of market failure. To this end, the Commission has simplified and clarified the rules. At the same time, the new Guidelines are also focused on ensuring a level playing field in the internal market. (Link)
On 20 December 2021, the EU Commission approved the German aid scheme to promote investments in renewable („green“) hydrogen production in non-EU countries. Germany launched the „H2Global“ project, which is funded with around EUR 900 million, to allow for the purchase and import of hydrogen and hydrogen derivatives on the world market, to be then sold in the EU. The scheme shall promote the market ramp-up of green hydrogen and, thus, contribute to the goals of the EU Green Deal.
To this end, the H2Global scheme provides for a so-called double auction model, according to which the hydrogen or hydrogen derivates can be purchased via a competitive procedure in the non-EU countries at the lowest possible price with 10-year contracts and sold to German and EU companies via an intermediary that was founded for that purpose (HINT.CO) by means of short-term auctions at the highest possible price. (Link)
On 1 December 2021, the new so-called Competition Register at the German Federal Cartel Office (FCO) reached a new phase of operation. Authorities are now required to provide the register with information regarding professional violations and undertakings may request information from it. The Competition Register, which was launched in March 2021, will now serve as a central and digital database informing public contracting authorities about professional violations and offences committed by bidders (and their executives) which may justify their exclusion from the tender. Since 1 December 2021, criminal prosecutors and other authorities are required to report relevant findings and decisions to the Competition Register, while public contracting authorities in turn can request information from it; as of June 2022, public contracting authorities will be obliged to do so before awarding contracts.
Shortly before, on 25 November 2021, the FCO had published guidelines and practical advice on early resolution of register entries and self-cleaning. In principle, a company’s entry in the register is only deleted after the expiration period of three or five years depending on the nature of the offence. However, if an affected undertaking successfully undergoes self-cleaning under public procurement law, an early deletion is foreseen. In addition to compensation for damages, the undertaking, in particular, will have to expand compliance measures for successful self-cleaning; the necessary standards for effective compliance measures are explained in more detail in the aforementioned practical information. It is the first time ever that the FCO provides guidance in this regard. (Link)
By decision of 9 November 2021, the German Federal Court of Justice ended a long-lasting legal dispute in the field of private enforcement of EU state aid law (Case No. VIII ZR 97/20). The legal dispute between the German Federal State of Northrine-Westfalia (NRW) and the Austrian Klausner group essentially concerned the enforcement of a contract concluded between the parties and various legal questions, regarding the invalidity of contracts due to a breach of the State aid granting prohibition under article 108(3)(3) TFEU as well as the interruption of res judicata based on the principle of effectiveness under EU law. These questions were decided in favour of NRW in 2020 by the Higher Regional Court of Hamm in the second instance, thus rejecting a claim by Klausner group for performance of contract (Case No. 2 U 131/18). Prior to that, the Münster Regional Court (Case No. 11 O 334/12), which dealt with the matter in the first sentence, had dismissed the action after having referred the matter to the European Court of Justice for clearance (Case No. C-505/14), and the EU General Court had dealt with the complex of facts in the meantime (Case No. T-101/16). (Link)
The Chatham Partners’ EU/COMP-team is specialized in complex issues in the areas of EU and German competition, State aid and public procurement law and has extensive practical experiences in these fields.