December 20, 2018 Read More →

EU agrees to end coal subsidies by 2025, but gives Poland a break

EURACTIV:

European Union legislators reached agreement in the early hours of Wednesday (19 December) over a proposed reform of electricity market rules that includes a 2025 cut-off date for coal subsidies, and a special clause for Poland.

“Today’s message is clear: this is the last call for coal,” said Florent Marcellesi, a Green lawmaker from Spain who was on the European Parliament’s negotiating team. “We are taking a step beyond coal and a step towards the age of renewable energy,” he added after the conclusion of three-way talks with EU member states, under the Commission’s watch.

Marcellesi was far from jubilant however, saying the deal is still insufficient to comply with the Paris Agreement’s goal of limiting global warming to “well below 2°C”. Still, the new electricity market design for the first time places a limit on coal subsidies by introducing a CO2 emissions performance standard of 550g per kilowatt hour on all new power plants.

The 550 rule is the cornerstone of the agreement, and effectively rules out state aid for coal. The standard will start applying for all new power stations as soon as the regulation enters into force, and as of 1 July 2025 for existing generation facilities.

Agreement was a long time coming, however, and required give and take on all sides. The previous round of talks collapsed over Poland’s insistence to keep bankrolling emergency power plants running on coal, which are the heaviest emitters of CO2. Those receive government funding via so-called “capacity mechanisms” which remunerate power plants for keeping on stand-by, in order to meet peak demand for electricity.

Poland finally agreed to the 550 rule applying to existing coal power plants as of 1 July 2025. In return however, Warsaw won a “grandfathering clause” that will protect contracts awarded to energy generators under the country’s capacity scheme. The clause will apply to all contracts approved before 31 December 2019.

More EU forges deal on coal phase-out, with special Polish clause

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