The European Court of Justice has issued a temporary injunction preventing the Spanish government from subsidising the use of domestically produced coal in electricity generation. The Spanish government plans to require generators to use ten million tonnes of Spanish-mined coal every year until 2014, and to give a very generous subsidy (as high as the solar Feed-in Tariff) to purchase the electricity generated. The Spanish energy regulator has estimated that subsidies will be worth around €800 million. The European Commission had said that this plan was acceptable. The European court will now decide whether to issue a full injunction and launch an investigation. An investigation would last years.
Two Spanish courts are also investigating this plan to subsidise filthy electricity. Spain’s central court issued a temporary injunction last week . And some generators have asked Spain’s supreme court to rule on the plan’s legality. The Spanish government has said that the plan will be on hold until the courts reach decisions.
The Spanish government and the European Commission had justified the subsidies because they would ‘safeguard a strategic energy reserve’. This is a very weak defence – the subsidies are clearly inconsistent with the EU’s climate policies and also the single market programme to remove barriers to trade, which has been central to EU policy for the last quarter century. Any subsidies for coal, in Spain and elsewhere, should go only to CCS. And Spain’s best strategic energy reserves are solar and wind. The Spanish government is reducing subsidies to these to try to deal with the economic crisis. This crisis is serious, but so is the climate crisis. Renewables should continue to get the support they need.