EU Commission Probes Spain’s Support for Coal Power Plants

The European Commission said on November 27 that the EC has opened an in-depth investigation to assess whether Spain’s "environmental incentive” for coal power plants is in line with EU State aid rules. At this stage, the Commission has concerns that the support has been used to implement mandatory environmental EU standards as regards sulphur oxide emissions, which applied to coal power plants at the time, the EC said in a press release. If confirmed, this means that the scheme did not actually have any environmental incentive effect. Furthermore, the financial support may breach an established principle of EU State aid rules, namely that Member States may not grant State aid to companies to meet mandatory environmental EU standards.

"If you pollute, you pay – this is a long-standing principle in EU environmental law,” EU Competition Policy Commissioner Margrethe Vestager said. "EU State aid rules do not allow Member States to relieve companies of this responsibility using taxpayer money. We currently believe that this Spanish scheme 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 added.

The opening of an in-depth investigation gives Spain and interested third parties an opportunity to submit comments. It does not prejudge the outcome of the investigation, the Commission said.