Press Release: State aid: Commission clears modified Compensation Fund arrangements for organisation of electricity market in Luxembourg

The European Commission concluded that the Luxembourg Compensation Fund arrangements for the organisation of the electricity market are compatible, following modifications, with the state aid rules of the EC Treaty, and in particular the guidelines on environmental aid. The Commission had opened a formal investigation in view of its doubts regarding contribution exemptions benefiting certain consumers and payments made to green electricity producers. It also looked into whether imported green electricity was being treated in a discriminatory manner in relation to that produced domestically. However, Luxembourg provided evidence allaying the Commission’s doubts and has undertaken to modify the scheme. Exemptions from contributions to the Fund have been abolished and compensation mechanisms have been introduced for imported green electricity.