Commission launches probe into Spanish aid to coal-powered plants

Coal-power stations are already obliged to reduce emissions under EU law- hence an incentive scheme may not have delivered any additional benefits. [Shutterstock]

The European Commission has opened an in-depth investigation into Spain’s state aid for coal power plants to establish whether it is in line with EU rules, the executive said on Monday (27 November). EURACTIV Spain reports.

Brussels is concerned that this support does not respect EU rules on state aid and has been used to meet the EU’s environmental obligations, which were mandatory in any case.

Polluter pays

“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,” European Competition Commissioner Margrethe Vestager said in a statement.

The Danish policymaker said the Commission currently believes that the Spanish regime “did not incentivise coal 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 gave these coal power plants an unfair competitive advantage. We will now investigate this issue further,” she said.

A filtering problem

In 2007, the Spanish authorities introduced an “environmental incentive” regime to support the installation of new sulphur oxide filters in existing coal plants.

These filters had to reduce the emissions of the substance of the plants below certain limits, said the EU executive. In return, the plants were entitled to receive public aid based on their size for a period of ten years (€8,750 per megawatt per year).

Since 2007, fourteen coal plants have benefitted from this scheme. They have received more than €440 million in total in public aid and will continue to receive payments until 2020.

Commission approves Spain’s coal aid

The European Commission has cleared Spain's controversial state aid plan to support its domestic coal sector over the next four years, despite warnings that it will scupper the EU's green energy goals.

Spain did not notify the Commission of the measure as requested under EU law, and now Brussels fears that the emission limits imposed on the beneficiaries of the environmental incentive would simply comply with the EU mandatory standards on the environment, which apply to coal plants regardless.

The corresponding legal requirements were established in a 2001 directive on limiting emissions to the atmosphere of certain pollutants from large combustion plants, said the EU executive.

If Brussels’ suspicions are confirmed, it will mean that the scheme has not had any additional environmental impact. But the Commission said that the opening of an in-depth investigation does not prejudge its outcome.

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The Spanish government is challenging a decision by its main electricity provider to shut down two coal-fired power plants. An attitude that contravenes the Paris Agreement on climate change. EURACTIV France reports.