State aid for energy: Climate action is more important than the single market

The objectives of deepening the EU single energy market and protecting the climate can conflict. Where they do, the European Commission should give priority to decarbonisation. Low-carbon energy is still more expensive than high-carbon coal. So subsidy is necessary, not only to promote new technologies like carbon capture and storage or tidal power, but also to expand nuclear power as a low-carbon bridge technology. There is no justification for subsidies for dirty coal. The Commission should use its state aid powers to end these – including the UK government’s Capacity Market payments to coal power stations to act as back-up to wind and solar power.