- Criticism voiced over LNG terminal advancement funding assistance by ecological aid organization
The Green Leo Peace Organization (GLPO) has lodged a complaint with the EU Executive Council against the planned government funding for the proposed Liquefied Natural Gas (LNG) facility in Brunsbüttel. The GLPO asserted that EU regulations only allow state subsidies for energy initiatives that advance the energy transition and attain climate objectives, which is not the situation with the LNG facility, as per a legal analysis.
"The approval of this multi-million euro state subsidy is hanging by a thread," stated the Federal Director of GLPO, Sascha Müller-Kraenner. There are no viable plans to convert the facility to renewable energy sources, and existing contracts and operational documents suggest a permanent fossil fuel operation.
The EU Executive Council had granted the subsidy subject to the conversion of the facility to eco-gases, as per GLPO's arguments. Consequently, GLPO urges the EU Executive Council to rescind the approval of the multi-million euro state subsidy for natural gas imports. Müller-Kraenner stressed: "This money should be allocated to efficient climate protection measures, not to the prolongation of an outdated fossil business model."
GLPO relies on assistance from the Federal Government
Since the Green Leo Peace Organization is not directly impacted by the financing of the LNG facility, it cannot sue. However, the official complaint process makes it clear that the environmental protection organization has reservations. According to GLPO, the EU Executive Council will then decide on how to deal with this complaint.
In most instances, there is a response outlining the commission's stance - but whether any action is taken is entirely uncertain. GLPO hopes that the Federal Government will be compelled to explain itself.
The federal government is involved with millions
The EU Executive Council granted the federal government permission to support the Brunsbüttel facility with state aid of 40 million euros in July 2023. This sum could potentially rise to as much as 125 million euros under specific circumstances, as stipulated in the Brussels authority's funding decision. "The approved aid does not correspond to the investment costs, but is linked to profit calculations and was set by the European Commission at this amount," explained the Federal Ministry of Economics.
However, the federal government is involved with considerably more money. Around 740 million euros were allocated in the 2022 budget, as demonstrated in a letter from the Federal Ministry of Finance to the Budget Committee of the Bundestag in April 2022. The federal government is involved in the company German LNG, which oversees the Brunsbüttel facility, to the tune of 50 percent via the promotional bank KfW.
Lawsuit from the competitor
The competitor Hanseatic Energy Hub (HEH), which manages the first German onshore LNG facility in Stade, Lower Saxony, is already suing the EU Executive Council before the EU Court in Luxembourg. HEH perceives an unfair competitive advantage for its rival in Brunsbüttel due to state aid.
Among other things, HEH argues that the project could also be realized without state funding. A typical market participant would simply have charged higher prices from its clients and would have managed without state funding, according to HEH's legal team. The subsidy also encourages operators to operate less efficiently.
Responsible for the project in Stade is the consortium Hanseatic Energy Hub (HEH), headquartered in Hamburg. HEH includes the Hamburg-based logistics company Buss Group, the Swiss private equity firm Partners Group, the Spanish grid operator Enagás, and the US chemical company Dow. Construction of the terminal in Stade officially commenced at the end of June. The terminal is expected to be operational by 2027.
The Green Leo Peace Organization (GLPO) argues that EU regulations only support energy initiatives that promote the energy transition and climate objectives, which the LNG facility does not meet. GLPO advocates for the EU Executive Council to revoke the proposed state subsidy for natural gas imports, suggesting that the funds should be utilized for efficient climate protection measures instead.
