Brussels (Brussels Morning Newspaper) – The EU Commission approved a €150 million Greek measure for carbon storage construction, supporting climate targets.
The European Commission has agreed, under EU State aid regulations, a €150 million Greek measure made available through the Recovery and Resilience Facility (‘RRF’) to fund the construction of a carbon storage structure in Prinos. The measure assists in reaching Greece’s climate targets and the EU’s strategic goals under the European Green Deal.
As reported by the EU Commission, the measure informed by Greece will be fully funded by the RRF, following the Commission’s positive review of Greece’s Recovery and Resilience Plan and its adoption by the EU Council. The beneficiary of the activity is EnEarth Ltd, a Greek subsidiary of Energean plc, an exploration and production company concentrating on developing resources in the Mediterranean and North Sea.
What are the expected outcomes of the carbon storage project?
The assistance will partially fund the construction costs of the onshore and offshore infrastructure for the creation of the carbon storage structure. The facility will be deployed in two stages, but only the first one will be funded under the current measure. Under the first phase, EnEarth will construct a large-scale pipeline to transport, from the onshore collecting site to the offshore storage site, up to 1 million tonnes of CO2 per year cast by industrial players.
The aid will be paid in three installments until 2026. The facility is anticipated to start the ramp-up phase in 2027 and become fully functional in 2030. The grant, which amounts to €150 million, will cover surround 90% of the funding gap. If the project turns out to be very prosperous, generating extra net earnings, the beneficiary will return to Greece part of the aid received (claw-back mechanism).
Why was this funding necessary for Greece’s climate strategy?”
The Commission evaluated the measure and found that the action promotes the development of economic activity, in certain carbon storage. At the same time, it helps the objectives of key EU policy endeavours, such as the European Green Deal and the EU Industrial Carbon Management Strategy. The measure is also necessary and suitable to meet the EU’s and Greece’s national climate targets. Moreover, there are precautions, including the claw-back mechanism, to ensure that undue distortions of competition are limited. The aid brings favourable effects that outweigh any potential warping of competition and trade in the EU.
On these grounds, the EU Commission authorised the Greek measure under EU State aid rules.
