Renewable Energy and the Free Movement of Goods

Abstract

Member States retain the right to decide who can receive renewable energy subsidies, and can exclude green electricity produced abroad from subsidy programmes. With its decision in the Alands Vindkraft case, the European Court of Justice assured the continued existence of renewable energy subsidy programmes in various European Union Member States. While the judgment was welcomed by many political stakeholders, it highlights a number of unresolved legal questions. To date, the Court of Justice of the European Union (CJEU) has failed to clarify if and when discrimination against foreign goods is permitted for reasons of environmental protection. The problems that remain in the wake of the Alands Vindkraft decision argue in favour of abandoning the existing distinction between discriminatory and non-discriminatory subsidy measures. With its decision, the CJEU has granted Member States broad leeway to conduct their own assessment of the proportionality of a measure. All in all, renewable energy providers have reason to celebrate; however, the goal of creating a single European market for electricity has fallen by the wayside.