EU investigation into Germany’s plan to pay compensation to coal power plants to be shut down

The EU Commission has announced that the investigation into Germany’s plans to shut down its lignite-fired power plants prematurely has been deepened.

In the statement, it was reminded that the EU Commission launched an investigation to evaluate whether the compensation payment plan to Germany’s energy companies RWE and LEAG for premature shutdown of lignite-fired power plants in 2021 complies with public support rules.

Reminding that an investigation has been launched especially due to doubts about the proportion of compensation payments covering profit losses and additional mine rehabilitation costs of energy companies, the statement reminded that Germany made a new agreement with companies for a faster exit from coal last year and changed the previous compensation calculation management.

In the statement, it was stated that Germany did not change the amount of 2.6 billion euros in compensation to be given to RWE, and therefore decided to expand the scope of the Commission’s ongoing investigation.

Noting that the preliminary view of the Commission is that Germany’s compensation to RWE continues to constitute public assistance, it was noted that it will be examined whether the compensation in question is proportional.

The authority of EU member states to determine how they will provide public support falls within the scope of the EU Commission.

EU countries can only use public subsidies in a way that does not harm competition and in the public interest.

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