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European Commission

Press release

Brussels, 22 January 2014

State Aid: Commission authorises allocation of 404.6 million free greenhouse gas emission allowances for modernisation of Polish electricity sector

The European Commission has found that Polish plans to allocate free of charge 404.6 million carbon emission allowances for modernising the electricity sector are in line with EU state aid rules. Today, 90% of Poland's electricity generation is based on coal-fired power stations, which are very carbon-intensive. The Polish investment plan includes more than 340 investment projects with a total value exceeding €28 billion (PLN 119 billion). Those investments will be partially funded through the allocation of free greenhouse gas emission allowances. The Commission found that the funds granted will be used to modernise production infrastructure, diversify the energy mix or build new installations. This will contribute to liberalising energy markets, reducing greenhouse gas emissions and increasing the security of supply, in line with EU objectives, without unduly distorting competition in the Single Market.

Joaquín Almunia, Commission Vice President in charge of competition policy noted: “The investments will allow Poland to diversify its sources for the production of electricity and to contribute to the expansion of national energy markets. At the same time the measure contributes to reaching Europe's 2020 objectives by reducing greenhouse gas emissions.”

The projects to be supported with the free allowances were chosen through an open, transparent and non-discriminatory procedure. They will contribute to a more competitive environment by closing some of the low efficient coal fuelled thermal plants and developing a higher share of lower emitting natural gas and renewable energy production.


Article 10c of the EU Emission Trading Directive (Directive 2003/87/EC as amended by Directive 2009/29/EC) allows certain Member States to allocate carbon emission allowances free of charge, provided that they use the funds to modernise their energy system, for example by upgrading the infrastructure, introducing clean technologies and diversifying their energy mix. In May 2012 the Commission adopted state aid guidelines relating to the ETS system (see IP/12/498).

Poland presented its national investment plan in September 2011. In July 2012, the Commission approved the plan subject to certain modifications (see the decision). In particular, that decision listed 30 investments which were found ineligible by the Commission. Poland therefore eventually excluded such investments from the national plan which was finally notified in the current state aid examination. Today's state aid decision completes the previous findings of the Commission by concluding that the aid in the form of free allowances to finance the investments in the national plan does not distort competition to an extent contrary to EU interest, given the positive environmental effects of the Polish plan.

The Commission has approved similar measures for Cyprus (case SA.34250, IP/12/700), Estonia (case SA.33449, IP/12/700), Romania (case SA.34753), Czech Republic (case SA.33537, IP/12/1411) Hungary (case SA.34086, IP/12/1411) and Bulgaria (case SA.34385).

More information is available under the case number SA.34674 in the State Aid Register on the competition website. New publications of state aid decisions are listed in the State Aid Weekly e-News.

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