Director unveils final results of study on coal subsidies and their impacts at EU Sustainable Energy Week

20 June 2019

Today at the EU Sustainable Energy Week, Director Kopač underlined the serious situation in the coal sector of the Energy Community Contracting Parties where direct subsidies amounted to EUR 1,2 billion in 2015-2017. On top of this, hidden subsidies, notably the non- payment of a carbon tax, totalled EUR 1,9 billion on an annual basis. In the three most coal intensive Contracting Parties (Bosnia and Herzegovina, Kosovo* and Serbia), coal subsidies were in absolute terms significantly higher than renewables support. The resulting market distortions and unsustainable consumption patterns are putting the region’s energy transition further at risk.

Mr Kopač said: “Instead of forward looking energy policies, the Energy Community Contracting Parties are stuck in the past. Coal has become a serious obstacle on the Contracting Parties’ paths towards closer EU integration. Governments in the region need to pursue comprehensive reform strategies for phasing out coal subsidies and coal itself in the longer term. Serious considerations should be given to the introduction of a carbon price. ”

The presented report is based on the analysis of direct and selected hidden subsidies to coal-based electricity production in the Energy Community Contracting Parties published by the Secretariat in March 2019 and the outcome of a subsequent public consultation. 

The Director was taking part in a session of the EU Sustainable Energy Week titled “Socio-economic footprint of energy transition in South East Europe” co-hosted together with the International Renewable Energy Agency (IRENA) and the World Bank. The objective of the session was to raise awareness of the substantial, largely untapped renewable energy potential, the direct and indirect costs of coal-fired electricity generation, and the socio-economic impacts of the energy transition in South East Europe, including income, jobs and air quality and the related policy challenges.