EU Approves €790M Aid for Closure of Valea Jiului Coal Mines

The European Commission approved, on Friday, under EU rules on state aid, a Romanian state measure worth 790 million euros (approximately 3.9 billion lei) to cover the exceptional costs generated by the closure of four uncompetitive coal mines in the Jiu Valley (Lonea, Lupeni, Livezeni and Vulcan), a press release from the European Commission informs.   Romania has notified the Commission of a measure worth EUR 790 million (approximately RON 3.9 billion) concerning aid to cover exceptional costs resulting from the closure of four uncompetitive coal mines (Lonea, Lupeni, Livezeni and Vulcan). This measure will help Romania to phase out coal production by 2032, in line with the binding commitment made in the National Recovery and Resilience Plan and the Territorial Plan for a Just Transition. The beneficiary will be Societatea Complexul Energetic Valea Jiului S.A., which manages the four mines and the Paro?eni power plant, with the aim of closing the mining activity.   The measures cover the social costs for workers who have lost or will lose their jobs due to the closure of the mines, as well as the costs related to the safety and rehabilitation works necessary for the closure of the four mines, in particular those concerning the measures necessary to secure the mine shafts, repair the environmental damage caused by mining and the reclamation of the land after the closure of the four mines. This aid covers eligible costs incurred between 1 October 2023 and 31 December 2032.   The Romanian authorities have committed to appoint an independent consultant who will monitor the coal extraction to ensure that it is strictly limited to what is necessary for public safety, for example to avoid spontaneous combustion, and who will provide annual reports in this regard.   “The measure we have approved today will help Romania carry out the necessary safety and rehabilitation work to facilitate the closure of the mines and ensure that no one is left behind in the green transition. This measure will also contribute to mitigating the social impact of the closure of the mines,” said European Commission Vice-President Margrethe Vestager.   The Commission assessed the measure under EU State aid rules, in particular Article 4 of Council Decision 2010/787/EU on State aid to facilitate the closure of uncompetitive coal mines (the ‘Council Decision’).   The Commission found that the measure is compatible with the internal market because the aid does not exceed the exceptional costs, which are not linked to current production, resulting from the orderly and irrevocable closure of the four mines by 2032 at the latest. In view of these considerations, the Commission approved the measure notified by Romania under EU State aid rules.