European Union launches probe into Germany's energy subsidy system

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An energy subsidy system which benefits more than 2,000 key players in Germany's heavy industry sector – including BASF and ThyssenKrupp AG – is being investigated by EU regulators.

EU regulators said they are looking into the German law's exemptions scheme, the so-called EEG-Act, in which companies are granted waiver for a surcharge – to fund the country's shift from fossil fuel to clean energy – which is instead paid for by consumers.

The surcharge exemption – dubbed the "green electricity privilege" – is granted when a supplier sources half its electricity portfolio from domestic renewable sources.

If the Commission considers it necessary, companies could be forced to pay back several billion euro. Chancellor Angela Merkel this week vowed to block any law change that could endanger jobs.

The exemption forms part of Germany's 2000 Energiewende program but regulators are looking into its 2012 amendments.