Energy subsidies are opaque and highly controversial – but their centrality to European energy policy means they will come under unprecedented focus in the coming year, panellists told Friends of Europe’s Café Crossfire debate on 13 May.

National subsidies go against the spirit of the EU’s single market, but they have been considered essential for a number of reasons: to ensure security of supply; to guide the continent towards an energy mix lower in carbon; and to make sure that industry is not penalised against international competitors with access to cheaper energy.

This forces policymakers into a delicate – and highly complex – balancing act. “All of this leads to a situation where state aid becomes a dominant theme in energy market policies,” said Gert Jan Koopman, Deputy Director General for State Aids at the European Commission Directorate General for Competition. Certain constraints and state intervention are needed, he said, but so were“market forces that essentially guide the main investment and consumption decisions.”

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