EU: Commission approves €790 million Romanian State aid measure to support closure of coal mines in Jiu Valley
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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.