Abstracts Law

Joint R&D Agreements on Clean Hydrogen: The Use of Environmental Gains as an EU Competition Law Defense: Gemensamma FoU-avtal gällande ren vätgas: användandet av miljöfördelar som ett EU-konkurrensrättsligt försvar

by Mikael Autio

The energy sector is a significant contributor to climate change, and the decarbonization of it is crucial in order for the EU to achieve its objective of becoming climate neutral by 2050. Clean hydrogen has been identified in the EU as a priority area where the EU needs climate and resource frontrunners to develop such technologies and commercial applications. Since the development of the new technologies and commercial applications usually require cooperation between different kinds of parties in a given industry, not least competitors, compliance with EU competition law is essential. The first aim of this thesis is to examine whether such cooperation agreements fall within the scope of the cartel prohibition set forth in Article 101 TFEU. The potential competition law concerns here relate to the market power of the parties, which may lead to reduction of competition or foreclosure issues, restriction of innovation, and anti-competitive coordination of the parties’ behavior on the markets. These competition concerns are examined in relation to joint R&D agreements on clean hydrogen production, storage, transport, and distribution. The second aim of this thesis is to examine how environmental gains of joint R&D agreements can be taken into account under Article 101 TFEU. EU competition law and policy do not currently provide clear guidance on the assessment of the compatibility of sustainability initiatives with competition law. However, at national level, a few European authorities and institutions have sought to provide guidance on the topic, and the Commission is expected to clarify its own guidance regarding sustainability initiatives in its revised guidelines, which will enter into force 1 January 2023. There are two main ways in which these benefits could be taken into account. First, a given R&D agreement could be considered to fall outside the scope of Article 101 TFEU completely based on the environmental benefits. Secondly, the environmental benefits could be integrated into the analysis under Article 101(3) TFEU, which allows agreements that are found to restrict competition to be exempted from the prohibition laid down in Article 101(1) TFEU. Although these approaches seem to have been used in earlier EU case law, the Commission has since introducing the more economic approach been critical to integrating environmental benefits into competition law analysis. However, recent judgements and statements from the Commission suggest that the Commission may be reconsidering its position. In this thesis, arguments are presented in favor of both the mentioned approaches in relation to joint R&D on clean hydrogen.