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ClientEarth Communications

16th June 2017

State Aid
Fossil fuels
Clean energy

ClientEarth challenges unlawful Bulgarian fossil fuel subsidy

Environmental lawyers ClientEarth have made a new State aid complaint to the European Commission against €1.3bn of unlawful aid given to recipients which include some of Bulgaria’s most polluting power plants.

The complaint refers the Commission to unlawful aid granted by the Bulgarian government to operators, many of them using fossil fuels, to provide both electricity and heat.

Under Bulgarian law, the national electricity company has to buy all electricity generated by these “high-efficiency co-generation” plants. The HECG operators are paid a surcharge by the national electricity company which comes from a levy on consumer bills. Under EU law, this constitutes State aid, because both the payments to the plants and the levy on consumer bills are mandatory under Bulgarian law and the Bulgarian government controls how this money is spent.

Although payments have gone on for a decade, the Bulgarian government never got permission to impose this levy and pay this surcharge, something it is bound to do under EU law.

ClientEarth’s conservative calculations suggest that the HECG generators have received a minimum of approximately €1.3bn in State aid from 2007 to September 2016.

ClientEarth energy lawyer Sam Bright said: “Bulgaria is giving these plants an unfair and unlawful subsidy, which is helping to prop up coal power plants, among others, and hindering the transition from fossil fuels to cleaner energy.

“These coal power plants have a terrible impact on public health and contribute, without exception, to climate change. Subsidising dirty fossil fuels gives them an unfair and, in this case, unlawful advantage over cleaner technologies. Bulgaria must join the global clean energy revolution and stop putting unlawful obstacles in its path.”

The new complaint comes a month after ClientEarth referred the Bulgarian government to the Commission because of illegal State aid, that time over the lack of compliance with the terms of a Commission decision to approve State aid in the form of free emissions allowances to power plants.

ClientEarth is waiting for a response to this complaint.