The European Commission has approved, under EU state aid rules, a €150 million Greek measure, financed by the Recovery and Resilience Mechanism (RRM), to support the construction of a carbon storage facility in Prinos. The measure contributes to the achievement of Greece's climate goals and the EU's strategic goals under the European Green Deal.
The measure notified by Greece will be fully financed by the RRM, following the positive assessment of Greece's recovery and resilience plan by the Commission, and its approval by the Council.
The beneficiary of the measure is EnEarth Ltd, a Greek subsidiary of Energean plc, an exploration and production company focused on the development of resources in the Mediterranean and the North Sea.
The aid will partly finance the construction costs of the onshore and offshore infrastructure to set up the carbon storage facility. The mechanism will be developed in two phases, but only the first will be funded under the current measure. In the first phase, EnEarth will develop a large-scale pipeline to transport, from the onshore collection site to the offshore storage site, up to 1 million tons of carbon dioxide per year emitted by industrial operators. This development phase will precede the future expansion of the facility to 2.5 million tonnes of carbon dioxide per year, which is planned as part of the second phase.
The aid will take the form of a direct grant, which will be disbursed in three installments until 2026. The facility is expected to start the development phase in 2027 and be fully operational in 2030. The grant, which amounts to €150 million , will cover approximately 90% of the financing gap. If the project proves to be very successful, generating additional net income, the beneficiary will return part of the aid received to Greece (automatic return mechanism — claw-back).
Commission assessment
The Commission assessed the measure under EU State aid rules, in particular Article 107(3)(c) of the Treaty on the Functioning of the European Union, which allows Member States to support the development of certain economic activities under certain conditions, and the 2022 guidelines on state aid in the climate, environmental protection and energy sectors.
The Commission found the following: The measure facilitates the development of economic activity and, in particular, carbon storage. At the same time, it supports the objectives of key EU policy initiatives such as the European Green Deal and the EU Industrial Carbon Management Strategy.
The measure is necessary and suitable for the achievement of both the EU climate goals and the national climate goals of Greece.
The measure is proportionate, since the aid is limited to the minimum necessary to activate the investment. In addition, safeguards, including the automatic return mechanism, are in place to ensure that undue distortions of competition are limited.
The aid is an incentive, as the beneficiary would not have made the investments without public support. The aid brings about positive effects that offset any possible distortion of competition and trade in the EU. On this basis, the Commission approved the Greek measure under EU State aid rules.
source: energy mag
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