The European Commission has approved, under EU State aid rules, a €790 million (approximately RON 3.9 billion) Romanian measure to cover exceptional costs arising from the closure of the four uncompetitive coal mines of Lonea, Lupeni, Livezeni and Vulcan in the Jiu Valley.
The Romanian measure
Romania notified to the Commission a €790 million (approximately RON 3.9 billion) measure to grant aid to cover exceptional costs arising from the closure of the four uncompetitive coal mines of Lonea, Lupeni, Livezeni and Vulcan. The measure will help Romania to phase out coal by 2032 in line with its binding commitment under its national Recovery and Resilience Plan and Territorial Just Transition Plan. The beneficiary will be Societatea Complexul Energetic Valea Jiului S.A. which manages the four mines and the Paroseni power plant with the objective of closing the mining activity.
The measure covers (i) social costs for workers who have lost, or will lose, their jobs due to the closure of the mines, and (ii) costs related to the safety and remediation works necessary for the closure of the four mines, in particular to secure mine shafts, repair damage to the environment caused by mining and re-cultivate land after the closure of the four mines. The aid covers eligible costs incurred from 1 October 2023 to 31 December 2032.
The Romanian authorities committed to entrust an independent consultant to monitor that the coal extraction is strictly limited to what is necessary for public safety, e.g. to avoid self-ignition, and provide annual reporting to this effect.
The Commission’s assessment
The Commission assessed the measure under EU State aid rules and in particular Article 4 of the Council Decision 2010/787/EU on State aid to facilitate the closure of uncompetitive coal mines (the ‘Council Decision’). The Commission found that the measure is compatible with the internal market as the aid does not exceed the exceptional costs, not related to current production, arising from the orderly and irrevocable closure of the four mines by 2032 at the latest.
On this basis, the Commission approved the Romanian measure under EU State aid rules.
Background
The Council Decision 2010/787/EU provides guidance on how the Commission should assess the compatibility of State aid to facilitate the closure of uncompetitive coal mines. Under this framework, Member States can provide support to this end by covering relevant exceptional costs as listed in the annex to the Council Decision.
The closure of uncompetitive mines is also aligned with the important EU’s objectives and targets set out in the European Green Deal and with other recent regulatory changes in the energy and environmental areas. With the European Green Deal Communication in 2019, the Commission set an objective of net zero emissions of greenhouse gases in 2050 that is enshrined in the European Climate Law. In force since July 2021, the law also introduced the intermediate target of reducing net greenhouse gas emissions by at least 55% by 2030. Through the adoption of the ‘Fit for 55′ legislative proposals, the EU has in place legally binding climate targets covering all key sectors in the economy.
The measure we have approved today will help Romania to carry out the necessary safety and rehabilitation works in order to facilitate the mine closure and ensuring that no one is left behind in the green transition. It will also help alleviate the social impact of the closures. – Margrethe Vestager, Executive Vice-President in charge of competition policy
