Secretariat calls on State aid authorities to scrutinize subsidies to coal

18 January 2021

In December 2020, the Secretariat published a new study on coal subsidies in Bosnia and Herzegovina, Kosovo*, Montenegro, North Macedonia, Serbia and Ukraine during 2018-2019. The study, which builds on a previous analysis covering 2015-2017, pinpoints the direct and hidden subsidies channelled to the coal sector in these Contracting Parties.

Yesterday, the Secretariat sent letters to all national State aid authorities encouraging the further assessment of the measures as to their compatibility with the State aid acquis. The State aid enforcement system in the Energy Community is decentralized and not as effective as the European Union’s. Yet the Contracting Parties committed repeatedly to fully implement and enforce the State aid acquis with regard to coal-fired power plants, as expressed for instance in the Conclusions of the Ministerial Council of 17 December 2020.

Under the Energy Community Treaty, the Contracting Parties must ensure that any public aid which distorts or threatens to distort competition by favouring certain undertakings or certain energy resources is prohibited. As State aid may distort competition and affect cross-border trade in energy, the control of aid granted from state resources is of key importance for the establishment of a regional energy market.