Environmentalists have pointed the finger at the Commission for telling Luxembourg that the guaranteed price it pays in support of renewable energies is creating market distortions.

A pending case between the Commission and Luxembourg relating to state aid for green electricity was denounced by the European Environmental Bureau (EEB) as running contrary to the EU's objective of promoting renewable energies. In a 2001 directive, the EU set itself a target to increase the share of electricity produced from renewable energy to 21% by 2010. However, member states remain free to choose their preferred system to support green electricity.

These are mainly: Feed-in tariffs which oblige grid operators to purchase green electricity at a fixed (higher) price in order to compensate for the difference with the market price, and; quota systems (or 'green certificates') where governments determine a minimum share of power to be produced from renewable sources.

On 25 September, the EEB said that the Commission had warned Luxembourg against its policy to compensate customers for higher-priced green electricity. When customers buy green power from a member state where a different support scheme applies, the measures are said by the Commission to be illegal, according to the EEB.

"The Commission considers the transboundary application [of these measures] to be market distortion," the EEB said, urging the Commission to modify its cross-border state-aid rules.

EEB Secretary-General John Hontelez said that alternative suppliers in Germany such as Greenpeace Energy have been receiving support from Luxembourg, thanks to the scheme.