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20 Eur. Energy & Envtl. L. Rev. 45 (2011)
Swedish Electricity Certificates Act and Its Compatibility with the European Convention on Human Rights, The

handle is hein.kluwer/eelr0020 and id is 45 raw text is: European Energy and Environmental Law Review April 2011 45 The Swedish Electricity Certificates Act The Swedish Electricity Certificates Act and its compatibility with the European Convention on Human Rights Prof. Dr. Petra Inwinkl, StB* Jennifer Rosenberg** Abstract The Swedish government encourages the development of electricity produced from renewable sources using an electricity certificates system. The system is regulated in the Swedish Electricity Certificates Act (lag (2003:113) om elcertfkat). The regulation imposes a penalty fee on producers for those that have received certificates grounded on incorrect or misleading information. Once the penalty fee has been charged, the legislation does not allow any adjustments, even in the case of an unjustified penalty. This article addresses the question whether this scheme is compatible with art. 6 of the European Convention on Human Rights (the Convention). It is concluded that the penalty fee how it is regulated in the Electricity Certificates Act is not in conformity with the Convention and therefore does not comply with EU law. Regulatory changes are needed in the sense that the Electricity Certificates Act has to take into account any reasons for reducing a penalty fee. I. Introduction The Directive 2009/28/EC establishes a common framework for the energy use from renewable resources in the European Union (EU) with the purpose of limiting greenhouse gas emissions and promoting cleaner transports. It determines that 20 percent of all the energy used in the EU shall be provided from renewable energy sources by the year of 2020. To this end, every Member State has been given its own binding target percentage of renewable sources in its gross final consumption.' In attaining Sweden's target percentage an impor- tant measure for the country is the already in 2003 implemented electricity certificates system. Electricity certificates (hereafter certificates) are given as govern- ment contributions to the owners of electricity production plants for every mega-watt hour electricity they produce from renewable sources, on the condi- tion that they fulfill certain standards. The certificates can subsequently be sold to get an extra income meant to cover the higher costs that often comes with production from renewable sources. The price on the certificates is not decided from extra costs but between every buyer and seller, hence it is decided by supply and demand. The demand is secured from the quota obligation which means that producers of electricity must own a certain amount of certificates. To avoid fraudulent behavior and wrongly issued certificates appearing on the market, the Swedish Electricity Certificates Act2 contains a penalty fee for those who receive certificates because they have given incorrect or misleading information. The penalty fee is calculated as 150 percent of the mean price during the year prior to the decision of the penalty fee. It shall be noted that the producer must keep the certificates and can save or sell them which means that the penalty is in reality 50 percent of the mean price.3 The Swedish government has an interest in that certificates are not issued for the wrong reasons since every certificate issued on wrong grounds represents one megawatt- hour of unclean electricity entering the market. In the long run this can result in that the target percentage in Dir. 2009/28/EC from calculations seems to be reached when it is in reality not. If a member state has not reached its target percentage by the year of 2020 the European Commission (EC) can commence infringement proceedings against that member state on the grounds for failure to fulfill an obligation under the Treaties.4 The Electricity Certificates Act contains no rules of reducing or removing the penalty fee, nor is the penalty fee subject to any evidentiary issues when the decision of it is appealed to a court. This implies that the rules are in breach of general principles of law such as the principle of proportionality and the principle of legal certainty. There is reason to compare this scheme with the Swedish tax surcharge system, as the rules for the latter have been changed to comply with the European Convention on Human Rights5 (hereafter the Convention).6 The penalty fee could be in breach of art. 6 of the Convention and the Convention as such. The presumption of innocence in art. 6 of the Convention could require the existence of some kind of evidentiary issues. Further on, the fact that there * Associate Professor, Department of Accounting and Law, J6nkoping International Business School, Sweden. ** Jdnk6ping International Business School, Sweden. 1 Dir. 2009/28/EC, p. 46. 2 Lag (2003:113) om elcertifikat. 3 Electricity Certificates Act, chapter 6, art. 7 and chapter 5, art. 1, s. 2. 4 Treaty on the Functioning of the European Union, art. 258 and 288. 5 Convention for the Protection of Human Rights and Fundamental Freedoms, of 4 November 1950, ETS No. 5. 6 Vdstberga Taxi Aktiebolag and Vulic v. Sweden, Judgment of 23 July 2002, application number: 36985/97 s. 82, and Janosevic v. Sweden, Judgment of 23 July 2002, application number: 34619/97 s. 71.

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