Brussels, 14th December 2023 – In the early hours of this morning, the EU Council and Parliament reached a very controversial compromise on the Electricity Market Design revision. Despite resistance from parts of the European Parliament delegation, EU member states and conservative parliamentarians wedged into the text the infamous Article 64, which prolongs state support for old, polluting coal-fired power plants that do not meet the emission standards agreed in 2019.
Granting such derogation ignores the reality of already fossil-fuel heavy capacity mechanisms. Instead, they’ve decided to reward the inaction of the Member States who fail to diversify their electricity mix and move away from coal – and not for the first time. Lessons have not been learned from the previous reform in 2019 and the text gives no guarantee that an extension will not be repeated again in the future.
“It is disappointing to see, literally the day after EU representatives fought at COP28 in Dubai to improve international efforts to phase out fossil fuels, that the EU cannot walk the talk. Supporting old, polluting coal-fired power plants and gambling on nuclear not only risks further delay for Europe’s energy transition, but sets the bar very low for other countries when it comes to phasing out fossil fuels. We need all policies to be aligned with tackling the climate crisis and put an end to harmful fossil fuel subsidies” – Marta Anczewska, Energy System Policy Expert at CAN Europe
While we wait to see the final text of this exemption, it seems that the only safeguard is a weak reference to Commission approval of each country’s coal extension and a requirement that the Member State assesses the impact of the granted derogation on the greenhouse gas emissions (but no obligation when this report needs to be submitted). If confirmed, the Commission needs to do everything in its power to ensure that this is exceptional, unavoidable, justified, and does not affect the EU’s credibility.
Other alarming developments are the actions of pro-nuclear Member States, who have brokered deals with countries who favour the continued reliance on fossil-fuels, sidelining renewables. Poland led the charge on further coal subsidies, and had the backing of France, Bulgaria and Slovakia. France’s activity throughout the entire negotiations has been flagrant – seizing control of the discussion to gain state support for the existing nuclear fleet via Contracts for Difference (CFDs), and not shying away from supporting coal reliant Member States.
“Backdoor deals to continue support for Europe’s dirtiest coal-fired power plants in exchange for state support for nuclear, a slow and expensive technology to get off the ground, delays the fossil fuel phase out on two fronts. Renewables, energy demand reduction, and system flexibility provide Europe the most effective path to meeting the Paris Agreement Goal, and should not have been sidelined during this reform.” – Thomas Lewis, Coal and Nuclear Policy Expert at CAN Europe
It is worth noting, however, the improvement in the protection of vulnerable and energy-poor customers from disconnections. Provisions on energy sharing still need to be assessed.