State aid: Commission opens in-depth investigation into public support for the refurbishment of five district heating networks in Poland
The European Commission has opened an in-depth investigation to assess whether plans to support the refurbishment of five district heating networks in South-East Poland are in line with EU State aid rules.
Poland notified the Commission of its planned public support for the refurbishment of district heating networks in the five municipalities of Tarnobrzeg, Ropczyce, Lesko, Dębica and Ustrzyki Dolne, all located in the region of Podkarpackie in Poland.
The projects that would benefit from the support were selected in 2016 through a tender that was open only to district heating projects located in the region of Podkarpackie. The planned support would take the form of a direct grant financed by EU Structural Funds managed by Poland.
These district heating systems generate heat predominantly from coal-fired boilers. The proposed refurbishment consists in the upgrade of and, in some cases, the extension of the pipe networks around existing district heating plants, but not of the plants themselves.
EU State aid rules allow Member States to support district heating networks, subject to certain conditions set out in Commission’s 2014 Guidelines on State aid for environmental protection and energy. In particular, the Guidelines provide that the projects must meet the criteria of “efficient district heating” set out in the Energy Efficiency Directive in order to be considered compatible under EU State aid rules.
At this stage, the Commission has concerns that the planned support may not be in line with EU State aid rules, as it does not meet the “efficient district heating” criteria set out in the Energy Efficiency Directive.
The public support notified by Poland appears to aim at inefficient district heating systems supplied by heat from predominantly coal-fired boilers. It would therefore not solve the problem of the inefficient heat source supplying the system and would risk locking in inefficient and polluting heat production.
The Commission has therefore doubts that the measures further the EU’s common objective of environmental protection, as required by the Commission’s 2014 Guidelines on State aid for environmental protection and energy.
The Commission will now investigate further to determine whether its initial concerns are confirmed. The opening of an in-depth investigation gives Poland and interested third parties an opportunity to submit comments. It does not prejudge the outcome of the investigation.
The non-confidential version of the decisions will be made available under the case numbers SA.51987, SA.52084, SA.52238, SA.54236 and SA.55273 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 State Aid Weekly e-Newsl.