An overly generous renewable energy subsidy in the Republic could be putting firms in Northern Ireland at a disadvantage, a committee has heard.
Civil servants in Belfast are gathering evidence ahead of a possible complaint to the European Commission alleging illegal state aid.
Businesses receive the subsidy in exchange for burning green energy fuels like biomass.
Noel Lavery, permanent secretary at the Department for the Economy, said: “The capital cost does look strange to us. We need to establish the facts and establish the evidence.”
A company receiving government support gains an advantage over its competitors. Such state aid is generally prohibited by the EC because it can distort competition between EU member states and affect trade.
No complaint has yet been made to Europe, Mr Lavery told a meeting of the Northern Ireland Affairs Committee at Westminster, as evidence is still being gathered.
Committee chairman Andrew Murrison said: “This Republic of Ireland scheme is significantly more generous than the one that the Department for the Economy (at Stormont) managed to get in 2012.”
Officials told the committee there could be significant fuel cost or tax differences between the two jurisdictions to explain the different rate.
Dr Murrison said: “I think that is most unlikely.
“I think the case could be made for different fuel costs between Northern Ireland and Great Britain but it is very difficult to see how they would be different between the two jurisdictions on the island of Ireland.”
The DUP’s North Antrim MP Ian Paisley said a complaint should be raised with the EC by June.
He accused Stormont civil servants: “They are being anti-competitive against another member state and you have done nothing.”
Mr Lavery said the Irish rate of return was 8% and there was a commitment in the documentation to amend the tariff as well as a clawback provision for government to recoup the aid.
He added: “The first thing to do is to actually establish the facts.”