New EU emissions laws shut the door on Greece’s new lignite plant

Media reaction

08 July 2019

Greece’s newest coal plant is set to choke mid-construction due to new EU rules that cut off subsidies the project was depending on for completion.

The new Electricity Market Regulation (EMR), which entered into force on July 4, categorically rules out using subsidies to finance new coal plants. The one exception is if such subsidies were already agreed in a capacity mechanism that entered into force before the EMR did.

Greece tried to hurry through a new capacity mechanism in the last weeks, which ClientEarth believes was solely for the purpose of ensuring a future for lignite plant Ptolemaida V. But officially, the mechanism is not in force until the European Commission has signed off on it – which it has not done. That means that lignite plant Ptolemaida V, now the EMR is in force, is not eligible for those subsidies and may never be operational.

ClientEarth energy lawyer Eleni Diamantopoulou said: “Ptolemaida V has been a deeply unstrategic commitment from the start – even the president of the state power company admitted it was uneconomic. But industry and the Greek government have remained adamant that there will be a future for climate-damaging lignite at any cost.

“But the plant operators have pushed themselves into a financial corner that made subsidies their last hope – and now all evidence suggests that they won’t get them.

“It is difficult to understand why Greece is not celebrating its vast renewable potential and embracing a clean and affordable energy future, rather than prolonging the demise of the lignite industry at the expense of the taxpayer.”

German lender KfW, providing much of the financing for the plant, has just announced it will no longer back coal projects.

Diamantopoulou added: “The future is not bright for lignite – this new package of EU laws is a nail in the coffin for projects like Ptolemaida V, and a clear prompt for governments and private investors to back clean energy innovations.”

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ClientEarth is a charity that uses the power of the law to protect people and the planet. We are international lawyers finding practical solutions for the world’s biggest environmental challenges. We are fighting climate change, protecting oceans and wildlife, making forest governance stronger, greening energy, making business more responsible and pushing for government transparency. We believe the law is a tool for positive change. From our offices in London, Brussels, Warsaw, Berlin, New York City and Beijing, we work on laws throughout their lifetime, from the earliest stages to implementation. And when those laws are broken, we go to court to enforce them.

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