European Union member states and the European Parliament agreed Wednesday to reform the bloc's electricity market, including a call to end coal subsidies by 2025. The reform, clinched after marathon talks, broadly aims to develop a more transparent and competitive market as the European Commission, the EU's executive arm, continues opening up national energy markets.
Austria, which holds the EU's six-month rotating presidency, announced the end to the coal subsidies in Wednesday's political agreement that still requires formal approval. "Member states can, after strict examination by the European Commission, distribute state aid but only until 2025," Austria said in a statement, referring to existing coal-fired power plants.
The subsidies, designed to compensate electricity producers who maintained higher capacity to meet peaks in demand, had stirred debate over the role of coal in the bloc. The reforms introduce a new limit for powerplants eligible to receive the subsidies known as capacity mechanisms: subsidies to generation capacity emitting 550 grammes of CO2 per kilowatt hour or more will be phased out.
Krisjanis Karins, the MEP who pushed for the legislation, said negotiators finally overcame sticking points on several issues including coal-linked subsidies. "Our ambition is to get away from heavy state subsidies and instead let the market do the job of supplying industries and households with affordable and secure energy inside the EU," Karins said in a statement.