Brussels investigates Spain for possible illegal aid to coal power plants


Thermal station of Meirama (A Coruña)./ Photo: Pilar Ponte – Flickr CC BY-SA 2.0


The Diplomat. 28/11/2017


The European Commission has opened a detailed investigation on the environmental incentives granted by the Spanish Government to coal power plants in exchange of the installation of filters to reduce pollutant emissions.


According to information provided yesterday by the Community Executive, the objective of this investigation will be determining whether this aid adjusts to the regulations on state aid of the EU and whether these incentives have been used to make companies fulfil the Union’s environmental obligations, which would violate the European legislation.


In 2007, according to Brussels, the Spanish authorities introduced a regime (an “environmental incentive”) to support the installation of new sulphur oxide filters in coal power plants in order to reduce emissions of this chemical compound to certain limits.


In exchange, coal power plants had the right to receive public aid according to the size of each plant for a ten-year period. Fourteen coal power plants have accepted this regime since then and they have received, in all, more than 440 million euros as public aid. Incentives will continue until 2020. Spain did not notify that measure to the Commission for its assessment according to the regulations on state aid of the EU.


The EC fears incentives serve to fulfil environmental obligations, against the regulations


The EC fears the emission limits imposed on those benefiting from the regime coincide precisely with the environmental regulations of the EU, compulsory for coal plants. If this was confirmed, according to Brussels, “the regime would have not had, in fact, any encouraging effect from the environmental point of view”.


Besides, it would constitute a violation of the European legislation on state aid of the EU, which establishes that member States cannot grant state aid to companies in order for these to comply with compulsory regulations of the EU as regards environment.


“If you pollute, you pay: this is a principle based on the environmental legislation of the EU” which “does not allow member States to free companies of this responsibility using money from taxpayers”, the commissioner of Competition, Margrethe Vestager.


“This Spanish regime did not encourage coal power plants to reduce damaging sulphur oxide emissions, since they were already obliged to do so”, so the support to those coal power plants could have given them “an unfair competitive advantage”, she pointed out.


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