European Commission approves €23 million investment aid to support high efficiency cogeneration fuelled by biomass in Poland

The European Commission has approved, under EU State aid rules, Polish plans to support the construction by energy company CEZ Chorzów II Sp. z o.o of a high efficiency combined heat and power unit in Chorzów, (Poland) which will use biomass as fuel.

The support will take the form of a direct grant amounting to €23 million and will be financed by EU Structural Funds managed by Poland. The investment will allow improving energy efficiency by introducing heat production in combination with the production of electricity from renewable sources in the form of biomass. This is expected to lead to a decrease in CO2 emissions by up to approximately 214,600 tons per year.

The Commission assessed the measure under EU State aid rules, in particular the Commission’s 2014 Guidelines on State aid for environmental protection and energy. It found that the measure is necessary, as the supported project would not be carried out without the public support, and proportionate, as the project will deliver a reasonable rate of return. The Commission also found that the use of biomass will be in line with the Renewable Energy Directive II (RED II) requirements on sustainability, from their entry into force. On this basis, the Commission concluded that the measure will foster key strategic objectives of the EU, in particular the improvement of energy efficiency through cogeneration based on renewable sources, without unduly distorting competition, in line with EU State aid rules.