16 Nov 2022

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Compensation for the closure of coal power plants : The General Court annuls the Commission's decision

The Netherlands banned the use of coal for electricity generation by a law of 11 December 2019. Four of the five coal power plants operating in the Netherlands were given a transitional period in order to recover their investments, adapt to another raw material or prepare for closure.

The fifth plant, “Hemweg 8”, which was less green and less efficient than the other four, was forced to close early, at the end of 2019. Due to the damage suffered as a result of this closure and in accordance with the new law, the Dutch government granted the company operating this plant compensation.

The Dutch authorities considered that the payment made compensated the company only for the damage suffered as a result of the imposed closure and that it did not therefore entail the grant of an advantage, thus ruling out any qualification as state aid.

In its decision, the Commission considered that there was no need to draw a definitive conclusion as to the classification of the measure as state aid as, even in the presence of state aid, it would be compatible.

Following an action brought by the Netherlands, in its judgment of 16 November 2022 in case T-469/20, the General Court held that in order to decide on the compatibility of a national measure with the internal market, the Commission must first have established that the measure does qualify as state aid within the meaning of the Treaty.

For further information : Court’s press release