Southeast Europeans ignore EU rules with €2.4bn coal subsidies

(Climate Change News, 25 Mar 2019) The EU’s Energy Community neighbours ‘systematically turn a blind eye’ to its state aid rules, a report by the secretariat finds.

The European Union’s southeastern neighbours pay around €2.4bn ($2.72bn) a year in subsidies for coal-fired power – contradicting the EU rules they’re supposed to follow, according to findings published on Monday. 

The Energy Community aims to extend EU energy market rules to its “contracting parties” – Albania, Bosnia and Herzegovina, Georgia, North Macedonia, Kosovo, Moldova, Montenegro, Serbia and Ukraine.

That includes legal obligations to ban state aid that distorts or threatens competition – the way support for coal does in electricity markets, the Energy Community Secretariat said in a report that takes the closest look yet at their support for the fuel. “State aid authorities in the contracting parties systematically turn a blind eye to this issue.”

Coal power plants in nine neighbouring countries would face “significant losses” if their direct state aid were to be eliminated and a price imposed on their carbon emissions, the secretariat report said.

This makes it hard for Energy Community members to follow the EU’s targets for reducing emissions, as well as the Paris climate agreement, it added.

“Due to the subsidisation of coal, the Energy Community contracting parties are not prepared to follow the EU in its decarbonisation pathway,” it said. “After neglecting the decarbonisation imperative on regional and national levels for years, the reform efforts in an already difficult social-economic environment would have to be increased considerably.”

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Climate Change News, 25 Mar 2019: Southeast Europeans ignore EU rules with €2.4bn coal subsidies