The European Commission has given green light to a massive €790 million ($997.3 million) aid package to Romania to facilitate the closure of four uncompetitive coal mines in its Jiu Valley region. The move is part of the country's broader effort to phase out coal by 2032, in line with its commitments under the European Green Deal.

The aid will be provided to Societatea Complexul Energetic Valea Jiului S.A., the company managing Lonea, Lupeni, Livezeni, and Vulcan mines, as well as the Paroseni power plant. The funds will be used to cover exceptional costs associated with the closure. It will provide financial support to the workers who lost their jobs due to mine closures. It will also be used in securing mine shafts and in repairing environmental damage caused by mining and reclaiming land.

This EU aid will be used to pay for expenses related to the mine closure between October 1, 2023, and December 31, 2032.

The Commission's approval is based on EU State aid rules, specifically Article 4 of Council Decision 2010/787/EU, which provides guidelines for assessing the compatibility of State aid for coal mine closures. The EU executive body determined that the Romanian measure complies with these rules. It has ensured that the aid does not exceed the exceptional costs necessary for the orderly and irrevocable closure of the mines.

“The measure we have approved today will help Romania to carry out the necessary safety and rehabilitation works in order to facilitate the mine closure and ensuring that no one is left behind in the green transition. It will also help alleviate the social impact of the closures,” said Margrethe Vestager, Executive Vice-President in charge of competition policy.

Romania's commitment to phasing out coal is a significant step towards achieving the EU's target of net-zero greenhouse gas emissions by 2050. By providing financial support for a just transition, the EU aims to ensure that the social and economic impacts of the coal phase-out are mitigated.

The EU's 2010 decision provides guidelines on how to assess state aid for closing uncompetitive coal mines. Member States can support this by covering specific costs outlined in the decision.

Closing these mines aligns with the EU's broader climate goals, as outlined in the European Green Deal. This initiative aims for net-zero emissions by 2050 and a 55% reduction by 2030. The EU's 'Fit for 55' proposals further solidify these targets, ensuring legal binding climate goals across various sectors.