Creating a well-functioning internal market for biofuels

Abstract State aid for renewable energy is a crucial element in the transition to a carbon-neutral energy system. However, various State aid schemes in different Member States can also lead to undesirable market distortions and hinder cross-border trade. This is particularly so when one Member State provides production aid, and another Member State has a demand side aid scheme or can result from some Member State providing both State aid and GOs for the same commodity. This undermines the level playing field for all actors within the biomethane markets and leads to subsidy competition, instead of product competition. The article addresses these questions and provides for solutions.