EU fails to strike agreement on excluding coal subsidies from the electricity market

Energy transition| Financing the transition

EU legislators have once again failed to agree on electricity market rules that would lead to zero-emissions energy systems. Instead, under the Austrian Presidency consent, some Member States are still trying to secure massive subsidies through so-called ‘Capacity mechanisms’ to polluting and uncompetitive coal-fired power plants.

Capacity mechanisms, which are supposedly intended to ensure supply in case extra power is needed, are often used as backdoor subsidies for the most uneconomic power plants, which are also the least efficient and most polluting. In order to limit funding for those, the European Parliament and the European Commission proposed to exclude plants emitting more than 550 grams of CO2 per kWh from receiving capacity mechanism support from 2025 latest.

However, the Council position under the Austrian presidency continues to propose to delay the enforcement of this much needed “550 rule” until 2035 and to allow subsidies for new coal plants still. This is despite many Member States voicing their support for raising the ambition and only few, including Poland that are asking for the continuation of coal subsidies.

Being wide-spread across the European Union and having become the largest single source of subsidies to power plants, this financial support adds almost €58 billion to energy bills of EU citizens. Coal power plants receive the vast majority of it, despite their unprofitability and their harmful impacts on our climate, environment and health.

Wendel Trio, Director of Climate Action Network (CAN) Europe said:
“The EU must stop the hypocrisy. While countries at the international climate summit in Katowice are working on how to safeguard the decarbonisation goals of the Paris Agreement, the European Council is unable to agree to the imperative first step of ending subsidies to coal, the dirtiest of all fossil fuels.”

“The Austrian Presidency needs to hear the calls for more ambition and confront the few laggards who are undermining the EU’s Clean Energy Package. At the next trilogue, the bloc must put an end to coal subsidies by banning coal from capacity mechanisms, if it is to avoid jeopardising its climate credibility.”



Nicolas Derobert, CAN Europe Communications Coordinator,, +32 483 62 18 88
Joanna Flisowska, CAN Europe Coal Policy Coordinator,, +48 698 693 170


Climate Action Network (CAN) Europe is Europe’s leading NGO coalition fighting dangerous climate change. With over 150 member organisations from 35 European countries, representing over 1.700 NGOs and more than 40 million citizens, CAN Europe promotes sustainable climate, energy and development policies throughout Europe.


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