Brussels responds to Drax state aid complaints
25 Feb 2014
The European Commission has responded to allegations that Drax power station received unlawful financial support from the UK government for the conversion of its coal units to biomass.
Following a complaint by Friends of the Earth and Bristol Community Energy, the Commission has confirmed it has made enquiries and received a response from the govenment regarding a loan guarantee HM Treasury issued to Drax Group – owners and operators of the Drax power station, North Yorkshire.
The Commission is now considering whether to open a formal investigation into the matter.
Government support for infrastructure projects is essential but only for the right sort of projects
FoE campaigner Keith Richter
The £75 million loan from Friends Life, which was guaranteed by the Treasury in April 2013, will be used by Drax as part of its £700 million conversion of three of its six 645MW coal-fired units into biomass-burning facilities.
Friends of the Earth has raised the complaint as it argues the Drax guarantee is unlawful on the grounds that the government has infringed upon European Union (EU) laws on state aid.
“Government support for infrastructure projects is essential but only for the right sort of projects - those that help us reduce our impact on the planet and meet legally binding climate targets,” said Friends of the Earth bioenergy campaigner Keith Richter.
“When the government decides to prop up the conversion of a behemoth like Drax into a forest-destroying biomass plant, it must take all the necessary steps to comply with EU law and should therefore be subject to full investigation by the European Commission.”
Drax and the Treasury have yet to make any public statements on the Commission’s response to the complaints.
