EUBIA European Biomass Industry Association : To pay or not to pay? The EU has to decide on payments to coal-fired plants

The EU has been aiming for a decarbonization of the environment and a green energy transition. However, the reality is that the EU is still dependant on non-renewable resources like coal. Renewable resources such as wind and solar power are highly dependent on weather and season conditions. Therefore, other sources are needed for energy security, the ones that are used at the moment are coal and gas. The issue is that the EU has been giving subsidies to coal-fired plants, and now, it has been questioned if these subsidies should continue to be provided 'It's counterintuitive to give state subsidies to very polluting power plants' said Florian Ermacora, energy department of the European Commission. Moreover, another controversy appears when gas companies could be benefited if this stop of payments occurs. How could that happen? The European Commission has made a proposal to limit the amount of carbon dioxide per kilowatt hour emissions, 550 grams. This implies that coal plants would be eliminated, which will only leave the option for gas. The proposal has provoked different positions between the EU Member states and it is now being studied by both the European Parliament and the Council, where there are also strong disagreements on the subject.

The disagreement does not only reach the nature of this proposal and create different positions between the institutions but also in companies. Furthermore, there is also disagreement in the identification of countries that have these payments, there are eleven as said by the Commission and twenty-four by Euroelectric (that includes every type payments, capacity payments and strategic reserves). It is also important to consider, that Euroelectric is against this proposal and claims that this 550 rule could lead to additional costs up to €50 billion.

In conclusion, this proposal has created a debate within the institutions that will be solved with the decision of the Parliament and the Council and that will be crucial settle the path towards a green economy transition.

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