Germany: Green light for infrastructure for green cars

On February 13, the EU Commission gave the green light to Germany’s national support scheme for e-mobility infrastructure. The Bundesprogramm Ladeinfrastruktur is a government fund established to support the creation of a nationwide network of 10,000 standard (N-LIS) and 5,000 high-speed (S-LIS) e-charging stations for electric vehicles. Following the recent Commission approval, a total of €300 million (€200m for S-LIS and €100m for N-LIS) will be available as of 1 March 2017 to both local authorities and private investors active in the field of e-mobility. The conditions for obtaining subsidies under the support scheme include mainly the use of energy from renewable sources and public access to subsidised charging stations.

The Bundesprogramm is part of a package of measures undertaken by the German government to boost e-mobility over the coming years. These measures also include e-filling stations on public highways, tax exemptions for electric vehicles and the national “support scheme for battery-powered e-mobility”.  

The Bundesprogramm required approval by the European Commission because it is 100% publicly funded and could therefore constitute illegal state aid. The EU state aid rules prohibit the use of state resources to favour individual companies or sectors, thereby distorting competition (Art. 107 TFEU). They are designed to ensure a level playing field for all companies in the EU by preventing state interventions (such as the grant of subsidies or tax breaks) that are often used by national governments to protect domestic industries and shield jobs from international competition. However, not all state aid is anti-competitive. For instance, aid granted to promote innovation or economic development or aid designed to address certain types of market failure may well be permitted under the state aid rules. Examples of legal state aid include e.g. regional aid, subsidies to public services, national broadband infrastructure schemes and state incentives for venture capital investments that help bridge an existing equity gap.

Member States that intend to grant certain companies or industries state aid must notify the proposed aid scheme to the European Commission prior to implementing it (Art. 108 para 3 TFEU). Recipients (or beneficiaries) of such aid therefore must assess carefully whether the aid has been notified to and approved by the European Commission. If this is not the case, they may have to repay the aid, possibly years after the aid has been granted.

In the present case, the Commission held that the Bundesprogramm Ladeinfrastruktur was compatible with the EU state aid rules (Art. 107 para 3 (c) TFEU) because it will encourage the use of electric vehicles and therefore will make a major contribution towards reducing emissions and improving air quality – a goal that is also in line with the EU’s low-emission strategy as well as its decarbonisation agenda.