EU announces aid and tax incentives for renewables

Mario Monti announced on 22 November that he intends EU governments to grant a minimum 40% of the investment for renewables projects energy schemes, rising to 50% for small and medium businesses. The proposals are yet to be approved by the European Commission, but would be effective from 1 January 2001 for seven years. Investors in the scheme would have a guarantee of a full return on their investment, Monti said.

“Renewable energy is a priority for the Community,” Monti told the European Parliament’s Economic and Monetary Affairs Commission. Member states would also be able to grant aid to cover the difference between the cost of producing renewable energy and the market price for electricity. “This aid will be allowed until the whole investment is amortised,” he said. States would also be able to grant aid towards the running costs of renewable schemes for the first five years at a decreasing rate year after year. “These are very generous terms in terms of state aid but the objective is justified because we wish to promote renewable energies,” he said.

Monti also said that EU nation governments may be able to offer temporary tax cuts or exemptions to develop renewable energy schemes.