On March 9, 2016, the French administrative Supreme Court
("Conseil d'Etat") issued a noteworthy ruling regarding the French Energy Economy
Certificates ("Certificats d'économie
d'énergie" or CEE).
The French CEE scheme was created in 2005, and it requires energy suppliers (including electricity, gas, fuel, and vehicle gas/petrol) whose sales are above a certain threshold to participate in energy saving, either through direct savings on their own installations or by helping their customers to save energy. Energy-saving actions eligible to obtain CEEs are defined and listed by ministerial orders. CEEs can be traded on a market that is not regulated by the authorities.
An association of alternative energy suppliers ("Association nationale des opérateurs détaillants en énergie") brought an action before the Conseil d'Etat to obtain the annulment of a government decree dated December 20, 2013, modifying CEE obligations and the CEE scheme. The claimants stated that the CEE scheme qualified as a State aid, in violation of Article 107 paragraph 1 of the Treaty on the functioning of the European Union ("TFEU").
However, the Conseil d'Etat, which relied on precedents by the Court of Justice of the European Union, ruled that the CEE scheme, unlike greenhouse gas quotas, cannot be considered as a State aid at the European level since it does not create any aid directly or indirectly granted through State resources. As a consequence, it was not necessary to submit the disputed 2013 decree to the European Commission before its entry into force.
Also, the claimants stated that the 2013 decree created a difference of treatment between energy suppliers. Their point was that "historical" energy operators (in particular, the State-owned EDF and GDF (now Engie)) benefit more from the CEE scheme than "alternative" (i.e., more recent) energy operators. The amount of CEE that must be restituted by an energy operator is calculated based on the volume of sales to end-users as declared by energy suppliers, rather than their market shares. As a consequence, historical operators, who have more sales and therefore an important volume of CEE to obtain but also to trade, allegedly benefit from more negotiation power on the certificates' market. The Conseil d'Etat rejected this last argument since the difference of treatment is created by the law itself and not by the disputed decree.
This recent dispute demonstrates the existence and significance for market players of an energy-saving market in France. From a business point of view, since the launch of the CEE scheme, 90 percent of CEEs have been obtained through standardized operations aimed at energy suppliers' customers (private households, companies, public entities). Additionally, 65 percent of energy savings were implemented in residential building. It led to the development of a new market of renovation/retrofitting works and service contracts and to the creation of companies specialized in the collection and sale of certificates. This rather recent market should participate in the energy transition currently carried out in France.
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