MINEX Forum

Tag: state aid

  • Polish Coal Sector Faces Financial Strain Amid Energy Transition

    Polish Coal Sector Faces Financial Strain Amid Energy Transition

    Poland’s coal mining sector has reduced its losses since last year but still needs billions of złoty in state support to survive, according to Polish media.

    In the first half of 2025, the sector made a net loss of 4.059 billion złoty (€950 million), Industrial Development Agency data show, less than half of the 8.365 billion złoty (€1.97 billion) lost in the first six months of 2024. Over the whole of 2023, Polish coal mining turned a net profit of 4.8 billion złoty (€1.13 billion).

    Despite the improved performance, the industry needs shoring up from the state budget due to rising costs and falling output, one trade union leader told the wnp.pl business news site. Bogusław Ziętek, head of the Sierpień 80 miners’ union, said the high costs are a result of government policy.

    As part of its ‘green transition’ policy of diversifying energy production away from fossil fuels and toward renewables, the government has capped coal extraction. This year’s output is equal to that forecast for 2035, and this falling yield has pushed up the production price per ton, Ziętek said. Because of this, he argues, the government’s energy policy will cost the state billions.

    Polish online energy portal Wysokie Napięcie reports that the government has earmarked over 9 billion złoty (€2.12 billion) to support collieries in 2025, made up of 3.5 billion złoty (€820 million) in direct subsidies and up to a further 5.4 billion złoty (€1.27 billion) in loans.

    A ‘social agreement’ between the government and miners’ unions officially allocates around 29 billion złoty (€6.82 billion) for subsidies to unprofitable mining firms until 2031, though some sources have suggested the true cost may be as high as 42 billion złoty (€9.88 billion).

  • EU Greenlights Subsidies for Energy-Intensive Industries in Major Policy Shift

    EU Greenlights Subsidies for Energy-Intensive Industries in Major Policy Shift

    In a landmark departure from long-standing EU policy, Brussels will now allow member states to subsidize the operating costs of energy-intensive industries in an effort to prevent the exodus of key sectors to countries with cheaper power.

    The newly approved measure permits governments to offer discounts of up to 50% on half of a company’s electricity usage, effectively covering up to 25% of their total power bills, as long as costs don’t fall below €50 per megawatt-hour. The policy, which breaks from traditional EU restrictions on state aid, will remain in effect until 2030.

    “If Europe wants to lead in clean tech, we must act with courage and clarity,” said EU competition chief Teresa Ribera. She called the move essential to keeping European energy systems “stable, affordable, and fair” without distorting the bloc’s single market.

    Historically, the EU treaties prohibited state aid to avoid giving domestic firms unfair advantages. While capital investments were occasionally supported, operational subsidies were typically off-limits—until now.

    Joachim Schmitz-Brieber of think tank EPICO noted the scale of the change: “This was only conceivable in absolutely exceptional cases. Now it’s policy.” The shift reflects serious concerns about industrial relocation, particularly as European firms struggle to compete with Chinese and U.S. companies enjoying lower energy costs.

    Industries eligible for the subsidies include steel, aluminum, and coal operations, which face mounting pressure from foreign competitors. The measure is expected to be most welcomed by Germany and France, which have long lobbied for relaxed state aid rules to help struggling industries.

    However, smaller EU countries have voiced concern that such subsidies could create market imbalances by favoring richer member states with deeper pockets.

  • European Commission Approves €790 Million Aid for Closure of Romanian Coal Mines

    European Commission Approves €790 Million Aid for Closure of Romanian Coal Mines

    The European Commission has approved a Romanian state aid measure worth €790 million (approximately RON 3.9 billion) to address the exceptional costs associated with the closure of four uncompetitive coal mines in the Jiu Valley—Lonea, Lupeni, Livezeni, and Vulcan. This decision aligns with the European Union’s state aid rules and supports Romania’s efforts to phase out coal production by 2032, in accordance with the National Recovery and Resilience Planand the Territorial Plan for a Just Transition.

    The beneficiary of this measure is Societatea Complexul Energetic Valea Jiului S.A., the operator of the four mines and the Paroșeni power plant. The allocated funds will cover social costs for workers affected by the mine closures, as well as safety and environmental rehabilitation measures. This includes securing mine shafts, repairing environmental damage, and reclaiming land for future use.

    The aid will be allocated for eligible costs incurred between October 1, 2023, and December 31, 2032. To ensure transparency and compliance, an independent consultant will be appointed to monitor coal extraction, ensuring it is limited to public safety needs, such as preventing spontaneous combustion. Annual reports will be provided to maintain oversight.

    “This measure will help Romania carry out the necessary safety and rehabilitation work to facilitate mine closures while mitigating the social impact of the transition. It ensures that no one is left behind in the green transition,” said European Commission Vice-President Margrethe Vestager.

    The European Commission evaluated the measure under Article 4 of Council Decision 2010/787/EU, determining that the aid strictly covers the exceptional costs arising from the mine closures, with no link to current production. Based on these findings, the Commission deemed the measure compatible with EU internal market rules.

  • EU Commission Approves €1.3 Billion State Aid for ArcelorMittal’s Green Steel Initiative

    EU Commission Approves €1.3 Billion State Aid for ArcelorMittal’s Green Steel Initiative

    The European Commission announced on Friday its approval of €1.3 billion ($1.41 billion) in state aid from Germany to support steel producer ArcelorMittal in its efforts to decarbonize a portion of its production processes.

    Stating that the aid was essential to promote the production of environmentally friendly steel, the commission deemed it necessary and fitting. It emphasized that the anticipated positive impacts, particularly in terms of reducing carbon emissions, outweighed any potential negative effects on competition and trade within the EU