EU opens investigation into Spain’s support for coal-fired power plants

• 6 years ago (2017-11-28)
• David Flin

Coal 277 Europe 1061

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The European Commission has opened an in-depth investigation to assess whether Spain’s environmental incentive for coal-fired power plants is in line with EU State Aid rules. The Commission said that it has concerns that the support has been used to enable operators to meet mandatory EU environmental standards.

Margrethe Vestager, Commissioner in charge of competition policy, said: “If you pollute, you pay. This is a long-standing principle in EU environmental law. EU State Aid rules do not allow Member States to relieve companies of this responsibility using taxpayer money. We believe that this Spanish scheme does not incentivise coal-fired power plants to reduce harmful sulphur oxide emissions – they were already under an obligation to do so under EU environmental law. Therefore, we are concerned that the support gives these coal power plants an unfair competitive advantage. We will now investigate this further.”

In 2007, the Spanish authorities introduced a scheme to support the installation of new sulphur oxide filters in existing coal-fired power plants. Since 2007, 14 coal-fired power plants benefitted from the scheme, and received in total more than €440 million in public support, and payments will continue until 2020.

Spain did not notify this measure to the Commission for assessment under EU State Aid rules. The Commission is concerned that the emission limits imposed on the beneficiaries of the scheme merely implement mandatory environmental EU standards. If confirmed, this means that the scheme did not actually have any environmental incentive effect, and was not legal under EU State Aid rules.

The Commission will now investigate further whether its initial concerns are justified. The opening of an in-depth investigation gives Spain and interested third parties an opportunity to submit comments.