Posted on July, 05 2010
Brussels, Belgium – WWF today lodged a formal complaint with the European Commission over a new Spanish regulation that would see state aid going to power stations burning already heavily subsidised domestically produced coal.
Approving the regulation to apply subsidies on subsidies for the same coal runs directly counter to the European Union's support for a phase out of "inefficient" fossil fuel subsidies, as a party to commitments made at the G20 meeting last year.
The cost of the new subsidy to power stations to burn Spanish coal is estimated at €800M over three years according to the Spanish energy regulator. Spain, which is pushing the European Union to extend subsidies on coal mining, spends about € 1 billion a year subsidising the mining of coal.
‘Faced with a recession, state aids for renewable energy growth and green jobs are the most sustainable option for meeting climate targets and developing a vibrant economy. Yet the Spanish government is going backwards by supporting new coal subsidies,’ said Mar Asunción, Head of Climate Change of WWF Spain.
"Double subisides are just farcical"
The purpose of the Spanish Royal Decree, adopted earlier this year to fix prices and prioritise dispatch at ten Spanish coal-fired power stations using domestic coal, is to deal with a backlog of stockpiled coal built up as as a result of plunging electricity demand due to the economic downturn and increasing supplies of renewable energy.
Implementation of the plan has been delayed pending its clearance by the Spanish EU competition commissioner Joaquín Almunia.
Spain is one of a handful of EU states pressing the European Commission to prolong subsidies for coal mining. The current 8-year derogation expires at the end of this year. Current annual aid levels are highest in Germany and Spain, €2bn and €1bn respectively. The Commission could propose a new coal derogation later this month.
"Any subsidies that artificially boost the use of coal are incomprehensible," said Mark Johnston, Senior Policy Adviser at WWF in Brussels. "But double subsidies are just farcical. The European Commission must act decisively to ensure Spanish coal aid is phased out; Spain’s plans must not become a precedent for other EU member states."
Spain is already not meeting its greenhouse gas emission targets. According to the European Environment Agency's latest annual inventory, emissions in the country in 2008 were 40 percent, or 116 million tonnes CO2 equivalent, above its Kyoto base year and 22 percent, or 73 million tonnes CO2 equivalent, above its 2012 compliance target.
