Brussels, 04/12/2014 (Agence Europe) - When the European Commission examines a case of state aid which pursues not an environmental objective, but an objective of general economic interest, it is not obliged to take account of Community law on environmental protection.
This is the conclusion reached by the General Court of the EU on Wednesday 3 December. With this ruling (case T-57/11), the General Court Tribunal rejected the complaint brought by the Spanish company Castelnou Energia, supported by the NGO Greenpeace-Espana, aiming to overturn the decision of the Commission on the compatibility between the rules of the single market and Spanish measures promoting the production of electricity from coal produced in Spain, at the expense of other sources of energy.
In 2010, Spain adopted a temporary system obliging ten electricity generating power plants in the country to source a certain amount of so-called “indigenous” coal. As the price of this coal was higher, the authorities set in place a financial compensation mechanism and a “preferential dispatch” mechanism, involving electricity produced by power stations using other sources of energy (imported coal, fuel oil, natural gas or a combination) being withdrawn from the daily energy market, in order to achieve the volumes laid down for the consumption of Spanish coal.
Although the Commission concluded in 2010 that this was a state aid measure, it also took the view that the measures in question were compatible with the single market, as they respond to the need to guarantee a service of general economic interest: guaranteeing the security of electricity supply. Castelnou Energia challenged the decision, notably on the grounds that the Commission should have taken account of European provisions on environmental protection.
The General Court has now upheld the Commission's position. The Commission is not obliged to take account of the environmental aspects, as when it carries out an examination into state aid, it must do this with regard to the European rules in the area in question and verify whether the objective sought by that aid will have a negative impact on the single market. It is only if the state aid pursues an environmental objective that the Commission may verify that it is compatible with European environmental rules.
The General Court also found, as argued by the Commission, that the Spanish measures ultimately do not bring about an overall increase in CO2 emissions in Spain. The reason is that with these measures, Spain is simply replacing imported coal with coal produced on its own soil, and the one is obviously no less polluting than the other. This means that the country is keeping within the limits imposed upon it by the emissions quota trading system in place in the EU.
The General Court also rejected the complainant's argument that Spain had violated the EU regulation on state aid to the coal industry (ban on distorting competition on the electricity market and obligation to reduce aid to the coal industry). The Council of the EU has in fact extended until 2018 the possibility for member states to grant aid covering the costs related to coal to be used for electricity production. (JK)