Brussels, 9 April 2014
State aid: Commission authorises investment aid for Finnish pyrolysis oil production plant
The European Commission has found that Finnish plans to grant Fortum Power € 8.1 million investment aid for a pyrolysis oil production plant in Joensuu, Finland, are in line with EU State aid rules. Pyrolysis oil is a bio-liquid and can be used as a cleaner substitute for heavy fuel oil. The Commission has concluded that the aid will further EU energy and environmental goals, such as reducing CO2 emissions, without unduly distorting competition in the Single Market.
Commission Vice President in charge of competition policy Joaquín Almunia said: "Pyrolysis oil provides a very good alternative to heavy fuel oil. It can be used in existing oil boilers with only small alterations, giving heat producers a clear incentive to switch to cleaner fuels. The proposed aid measure thus contributes to EU goals to reduce CO2 emissions."
In 2012 Finland notified plans to support the construction of a pyrolysis oil (bio-liquid) production in an existing heat and power plant in Joensuu. The facility will be built by the Finnish company Fortum Power and Heat Oy. Pyrolysis oil can be used in heating boilers as a substitute for heavy fuel oil and thus could reduce the yearly CO2 emissions by 59 000 tonnes and SO2 emissions by 320 tonnes. The production is based on a so-called fast pyrolysis process, where biomass is converted into bio-oil. The plant will be integrated into an already existing Fortum Power combined heat and power plant, and will be the first of its kind in the world. The integration will increase the overall efficiency of the process.
The Commission assessed the measure under the 2008 EU environmental aid guidelines (see MEMO/08/31). The most important impact of the investment is that it facilitates fuel switch in existing oil boilers – the previously fossil energy based heating will be much more environmentally friendly, especially in terms of CO2 emissions, through use of pyrolysis oil. The plant also contributes to increasing the security of energy supply and diversifying energy supply sources. The Commission therefore concluded that the positive effects of the aid offset any potential distortions of competition brought about by the state support.
The primary objective of state aid control in the field of environmental protection is to ensure that state support measures result in a higher level of environmental protection than without the aid, while at the same time ensuring that the positive effects of the aid outweigh its negative effects in terms of distorting competition.
The EU environmental aid guidelines are currently being reviewed as part of the State Aid Modernisation initiative (see IP/12/458). The Commission launched a public consultation of draft revised environmental and energy guidelines in December 2013 (see IP/13/1282).
The non-confidential version of the decision will be made available under the case number SA.35071 in the State Aid Register on the DG Competition website once any confidentiality issues have been resolved. New publications of state aid decisions on the internet and in the Official Journal are listed in the "State Aid Weekly e-News".