The Commission must live up to its European Green Deal promise and stop subsidies to fossil fuel companies, experts warn

Energy transition


Brussels, 8 October 2021

European climate, environmental and health NGOs have sent an open letter to the European Commission urging it to ensure that bloc-wide guidelines on energy subsidies do not allow taxpayers’ money to be used for bailing out fossil fuel operators. The world is watching and the EU needs to show leadership in helping the transition away from all fossil fuels as soon as possible, the letter says. 

Brussels, 8 October 2021 –  In the open letter sent to the European Commission yesterday (attached below), environmental groups have expressed concern that coal closure compensation measures proposed in the new Climate, Energy and Environment State Aid Guidelines (CEEAG) can serve as a lifeline for stranded coal facilities and actually delay closure dates. The draft lacks the ingredients to support a timely and adequate coal phase-out and honour the Commission’s own promise to align the competition policy with the European Green Deal (EGD). The CEEAG must incentivise an EU-wide coal phase-out before 2030, avoid overcompensation by making polluters pay, and eliminate the risk of a fossil gas transition, underlined the signatories.

The Commission’s proposal for the CEEAG was published in June 2021 – as part of the plan to revise the, formerly called, Energy and Environmental Aid Guidelines. Revised guidelines will kick in as of January 2022, with a crucial role authorising support for clean energy and adequate decarbonisation tools – determining the scale of support for the EGD in terms of available resources from each Member State.

The proposed Guidelines don’t specify a timeframe within which aid would be provided for closing coal plants – meaning operators can line up for compensations even for very late closures if a country’s coal phase-out date allows for it. Furthermore, the profitability assessment of coal assets is left to Member States’ and operators’ own, biased or intransparent calculations. And finally, it is the taxpayer who is expected to pay for the continued operation of stranded coal facilities until their closure at an unjustifiably late date. This adds to the bill they are already footing for the environmental and health costs of coal, which is to date unaccounted for by the polluters. 

Last but not least, the Guidelines treat fossil gas more favorably than other ‘most polluting fossil fuels’, namely coal, peat and oil shale. This leaves the door wide open for gas subsidies, risking a lock-in to further greenhouse gas emissions. The Commission’s competition arm must act consistently with the European Green Deal and support the shift of public money from fossil fuels to energy savings and renewables

“The CEEAG has the potential to incentivise efficiency, flexibility and a rapid deployment of renewables based on the ‘energy efficiency first principle’ – as a horizontal guiding principle of European climate, environmental and energy governance. The Guidelines must also pave the way for rapidly ending fossil fuel subsidies and investments, and for enforcing the polluter pays principle,” states the letter by CAN Europe, ClientEarth, European Environmental Bureau, Health and Environment Alliance, Europe Beyond Coal and Ember.

Messages from the signatories

“State aid guidelines must be revised in order to achieve the climate neutrality, zero-pollution and just transition objectives of the European Green Deal. Both private and public resources must be firmly invested in energy savings and rapid deployment of renewables to deliver on the Paris Agreement. The CEEAG has a true potential to support this shift, if it is rigorous in cutting lifelines to fossil fuels. Ending fossil fuel subsidies is in the Climate Law, and the Commission must walk the talk in all legislative processes including State aid.” said Elif Gündüzyeli, Senior Energy Policy Coordinator at CAN Europe.

“Taxpayers’ money should be used to free communities from the chains of coal to become the pioneers of the society-wide energy transition that we need, rather than used to prop up coal companies so they can drag communities into a futile last stand for coal,” said Mahi Sideridou, Managing Director at Europe Beyond Coal. “The EU’s proposed guidelines for State aid are currently open to this kind of abuse. These loopholes must be closed so that public money cannot be used to put the brakes on Europe’s accelerating coal exit.” 

The Polluter Pays Principle must be enforced in the CEEAG revision. When it comes to State aid, polluters must be kept accountable and precious public resources cannot be used to bail them out from their responsibilities. State aid must also not be wasted on subsidising coal to fossil gas projects but should instead focus on long-term projects aiming to achieve a zero pollution and climate neutral energy system.” said Riccardo Nigro, EEB Campaign Coordinator for Coal Combustion and Mines at European Environmental Bureau.

Juliette Delarue, senior State aid lawyer at ClientEarth said:With the current draft of these guidelines, we’re looking at a blueprint for a whole new era of fossil fuels, not a route towards genuinely clean energy. The provisions around when and how much money can go towards coal phase-outs are loose, and the criteria that should explicitly prevent gas lock-in are virtually non-existent. These things urgently need to change. The Commission and Member States need to face facts and move for a swift rewrite to rule out funding climate change.”

“The State aid guidelines must keep up with the accelerating pace of Europe’s coal exit. Without reform, they risk extending the lifetime of uneconomic plants and unfairly compensating plants that continue to pollute beyond 2030 in breach of the Paris Agreement and the EU’s own climate targets” said Sarah Brown, Senior Analyst at Ember.

“Europe’s dependency on fossil fuels has come with a huge unpaid health bill from pollution.  With the new state aid guidelines, the EU Commission has a unique opportunity to not only accelerate the greening of our economies, but also to help prevent heart disease, asthma and cancer, for today’s and future generations. Awarding taxpayer’s money to fossil gas would only lead to decades of more health-harming pollution. The science is clear: for a healthy planet and healthy people, there must not be any further investments into fossil fuels”, said Anne Stauffer, Deputy Director, Health and Environment Alliance (HEAL).

– ENDS – 



Masha Perovic, Southeast Europe Communications Coordinator, CAN Europe , +381 (0) 63 8411 566

The signatories:

Climate Action Network (CAN) Europe is Europe’s leading NGO coalition fighting dangerous climate change. With over 170 member organisations active in 38 European countries, representing over 1.500 NGOs and more than 47 million citizens, CAN Europe promotes sustainable climate, energy and development policies throughout Europe.

European Environmental Bureau (EEB) is Europe’s largest network of environmental citizens’ organisations. We bring together over 170 civil society organisations from more than 35 European countries. We stand for sustainable development, environmental justice & participatory democracy.  

ClientEarth is a non-profit organisation that uses the law to create systemic change that protects the Earth for – and with – its inhabitants. We are tackling climate change, protecting nature and stopping pollution, with partners and citizens around the globe. We hold industry and governments to account, and defend everyone’s right to a healthy world. From our offices in Europe, Asia and the USA we shape, implement and enforce the law, to build a future for our planet in which people and nature can thrive together. 

The Health and Environment Alliance (HEAL) is the leading not-for-profit organisation addressing how the environment affects human health in the European Union (EU) and beyond, bringing together over 90 member organisations including international, European, national and local groups of health professionals, not-for-profit health insurers, patients, citizens, women, youth, and environmental experts representing over 200 million people across the 53 countries of the WHO European Region. 

Europe Beyond Coal is an alliance of civil society groups working to catalyse the closures of coal mines and power plants, prevent the building of any new coal projects and hasten the just transition to clean, renewable energy and energy efficiency. Our groups are devoting their time, energy and resources to this independent campaign to make Europe coal free by 2030 or sooner. 

Ember is an independent, not-for-profit climate and energy think tank that produces cutting-edge research and high impact, politically viable policies that aim to accelerate the global transition from coal to clean electricity.