Green Competition law

In the EU Merger Control system, the Commission only reviews mergers that are notified to the Commission. In circumstances where businesses may seek to acquire green innovators but such mergers are too small to be notified to the Commission, there is a renewed focus on such transactions which can still be referred to the Commission by local merger control authorities even if they don’t have the power to review those mergers themselves (i.e. under Article 22 of the EU Merger Regulation).

Enforcement of the antitrust rules also supports green transition by protecting the competition that enables companies to innovate and operate sustainably. For example, the Commission fined carmakers €875m for agreeing not to compete to produce cleaner cars. Companies may still legally set joint standards for green products or pool resources to accelerate green innovation. The Commission has recently mentioned that this could mean companies agreeing to cut polluting products out of their supply chains. Sustainability agreements between companies don’t necessarily harm competition (e.g. agreements on open standards for green products). Others can be legal, even though if they restrict competition, provided the benefits they bring for consumers outweigh those restrictions.

The Commission is now encouraging companies to engage with the Commission to assess specific agreements and sometimes the Commission may give individual guidance or take a formal decision that an agreement is legal – this is a departure from the normal self-assessment system under EU competition law.

The Commission is reviewing its antitrust guidelines and rules on agreements between companies – both agreements between competitors and between companies at different levels of the supply chain – to give more general guidance. In July 2021, the Commission launched a public consultation on revising the rules on agreements between competitors. The Commission plans to have new rules in place by the end of next year (e.g. when an agreement to produce more sustainable products can count as one that delivers benefits for consumers and justifies some restrictions of competition.

These rules apply across all sectors but some industries, like agriculture, will have their own specific rules in the context of the Green Deal.

European governments will need to invest heavily in the context of the Green Deal. 

In January 2022, the Commission adopted guidelines on state aid for climate, energy and the environment. 

Those new rules expand the scope for using state aid for the Green Deal. The scope of the General Block Exemption Regulation has already expanded to allow EU governments to invest in green infrastructure (e.g. charging stations and energy efficiency), without needing Commission approval in advance – further expansion is likely.

The new rules will guide governments away from investments that use fossil fuels such as coal, lignite or oil with rules to discourage support for gas that’s more than strictly temporary. 

Competitive tenders for renewable energy subsidies will continue to be encouraged to help industry decarbonise. 

The Commission is also reviewing its portfolio of state aid rules to ensure they’re in line with the Commission's green goals. For instance, state aid rules on projects of common European interest will help EU governments combine with industry to fund infrastructure and innovation – including in new green technologies.

The EU's Just Transition Mechanism will make €75bn available to support European regions that face the biggest obstacles in adapting to the green transition (e.g. coal mining or industries that produce a lot of emissions).