The European Commission has approved, under EU State Aid rules, a €300 million Polish scheme to support workers affected by the closure of coal- and lignite-fired power plants and lignite mines.
The Polish measure
Poland notified to the Commission its plan to introduce a €300 million scheme to provide financial support to those workers who will lose their jobs due to the closure of coal- and lignite-fired power plants and lignite mines.
Under the measure, the support will take the form of a one-year severance payment for employees, which they can choose in place of the severance payments foreseen in the applicable collective labour agreements.
Poland also notified, for legal certainty, a paid leave up to four years for employees close to pension age until their retirement.
The scheme will run for a period of 10 years until February 2034. Poland may request a prolongation after that period.
The Commission’s assessment
The Commission assessed the scheme under EU State aid rules, in particular Article 107 (3)(c) of the Treaty on the Functioning of the European Union (‘TFEU’), which enables Member States to support the development of certain economic activities subject to certain conditions, and the 2022 Guidelines on State aid for climate, environmental protection and energy (‘CEEAG’).
Support to workers does not constitute State aid. The Commission found that the paid leave does not provide an advantage to the undertakings that close such an activity and thus does not constitute State aid. Regarding the severance payment, the Commission found that it provides an advantage to the undertakings in which these workers are employed. When an activity closes and an employee opts for the severance payment under the measure, the undertaking is relieved from severance payments obligations stemming from the applicable collective labour agreements. In particular, the Commission found that:
The measure is necessary and appropriate to mitigate the social impact of the closure of lignite mining and coal- and lignite-based electricity generation in Poland.
The aid has an incentive effect as it facilitates the societal acceptance of closing these activities and also provides an incentive to the undertakings for early closure.
The scheme is proportionate, as it is limited to the coverage of certain social costs that the beneficiary activities incur upon closure of the activities.
On this basis, the Commission approved the Polish scheme under EU State aid rules.
The 2022 CEEAG provide guidance on how the Commission will assess the compatibility of environmental protection, including climate protection, and energy aid measures which are subject to the notification requirement under Article 107(3)(c) TFEU. The new guidelines, applicable as of January 2022, create a flexible, fit-for-purpose enabling framework to help Member States provide the necessary support to reach the Green Deal objectives in a targeted and cost-effective manner. The rules involve an alignment 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 and will cater for the increased importance of climate protection.
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.
For More Information
The non-confidential version of the decision will be made available under the case number SA.109407 in the State aid register on the Commission’s Competition website once any confidentiality issues have been resolved. New publications of State aid decisions on the internet and in the Official Journal are listed in the Competition Weekly e-News.