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European Commission is 'willing to consider' subsidies for nuclear technology, says von der Leyen

European Commission President Ursula von der Leyen travelled to Prague to meet with the Czech Prime Minister Petr Fiala.
European Commission President Ursula von der Leyen travelled to Prague to meet with the Czech Prime Minister Petr Fiala. Copyright European Union, 2023.
Copyright European Union, 2023.
By Jorge Liboreiro
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Ursula von der Leyen has welcomed the idea of industrial subsidies in the field of nuclear energy, a highly divisive topic in the European Union.

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Speaking in the Czech Republic, a country that receives more than a third of its electricity from its nuclear power plants, the president of the European Commission said each member state was free to pave its own path towards climate neutrality.

"The choice of the energy mix is and will remain a national prerogative," von der Leyen said in a short press statement next to the country's prime minister, Petr Fiala.

"We know that nuclear plays a central role in Czechia's energy system and that it will continue to require investment to play its role in the Czech energy transition," she went on.

"And this is why we're always willing to consider state aid, of course, provided the conditions are right. But this is important."

As the chief enforcer of competition rules, the European Commission has the power to approve and reject the public money that governments inject into their national industries, which can take the form of grants, discounted prices and lower taxation, among others.

If the executive believes the state intervention poses an excessive risk to the single market and can put other EU countries at a disadvantage, it can strike down the proposal. The principles of fairness and equality have guided the Commission's thinking since the inception of European integration and are currently enshrined in EU law. 

However, in reaction to fiercer global competition and the ballooning costs of the green and digital transition, the long-standing dos and don'ts of competition policy have come under intense scrutiny, with some member states calling for greater flexibility to buttress their homegrown companies and prevent an industrial exodus.

The Commission has somewhat acquiesced without giving in too much ground: earlier this year, it loosened the rules for approving subsidies into six key areas of the green transition: batteries, solar panels, wind turbines, heat pumps, electrolysers and carbon capture technology. Additionally, Brussels presented the Net-Zero Industry Act to significantly increase the domestic production of these must-have products.

Notably, the Act's original draft excludes nuclear technology from its list of "strategic projects" and features only passing mentions of "advanced technologies (that) produce energy from nuclear processes with minimal waste" and "small modular reactors," which are still under development.

"We support cutting-edge nuclear technology under our Net-Zero Industry Act to boost innovation and cross-border cooperation," von der Leyen said in Prague.

The act is undergoing negotiations between member states and the European Parliament, where there is a push for nuclear to be listed as a "strategic project."

But getting there won't be easy: nuclear is an extremely divisive, even emotional topic across the EU, with most countries bitterly split into pro- and anti-nuclear factions.

The pro-nuclear group is passionately led by France, a country that obtains about 70% of its electricity from its vast network of reactors and is supported by the likes of the Czech Republic, Bulgaria, Hungary, Poland, Romania and Slovakia. They argue nuclear is a low-carbon technology that can run 24 hours a day and decrease external dependencies.

By contrast, Germany, the bloc's industrial powerhouse, has adopted an uncompromising anti-nuclear stance, with the backing of Spain, Portugal, Austria, Denmark and Luxembourg. They believe promoting nuclear energy amounts to green-washing due to the carbon footprint of uranium extraction and the long-lasting radioactive waste.

Both sides have formed alliances and are trying to bring in additional countries to solidify the qualified majority that is required to approve energy and climate legislation.

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"I reminded the president of the European Commission that nuclear energy is really important for the Czech Republic. It's a traditional industrial sector in our country. (It's) one of the ways for our country to achieve the climate objectives and to have sufficient sources of energy," Prime Minister Fiala said, next to von der Leyen.

"It's important that nuclear energy remains one of the preferred sources of clean energy in the Czech Republic. And we're doing our best so that nuclear energy stays the accepted source of energy."

Fiala said his team is evaluating tenders to expand the capacity of the Dukovany nuclear power plant, which holds four of the country's six nuclear reactors. In parallel, he added, the government is drafting the notification that the Commission needs to review before deciding whether it approves or blocks the subsidies.

"The completion of the notification process is a huge priority for us," he said. "I'm happy that after today's discussion with the president, I can see there is a chance that we will succeed with the notification process."

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Over the past decade, the Commission has green-lighted state aid related to nuclear power plants in Hungary, Belgium and the United Kingdom, when the country was still a member. The UK case was contested by Austria before the European Court of Justice, which eventually ruled that subsidies for nuclear energy were compatible with EU law.

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