Austria loses EU court case against Hungarian nuclear power plant

The European General Court has dismissed a 2018 case brought by the Austrian government against the European Commission over a new Hungarian nuclear power plant, Paks II, financed by Budapest and Russia.

Austria is historically one of the EU’s most fervent anti-nuclear countries and is currently suing the European Commission over its “green” label for nuclear power in the EU taxonomy. 

In 2018, Vienna also sued the Commission for failing to ensure fair competition and maintained that Hungary’s state aid for a new nuclear power plant had violated the bloc’s level playing field. The lower EU General Court dismissed the lawsuit on Wednesday (30 November).

The court held, that while the subsidy was of significant size, at €12.5 billion, its limited envisioned purpose limited its impact on the level playing field.

“Since it [€12.5 billion state aid] only concerns the investment costs for two new reactors to replace the four old reactors that will be gradually shut down due to their age, and no operating aid is foreseen, the impact on the energy market is limited,” the court stated, rejecting the Austrian argument of disproportionate state aid.

Vienna’s other arguments were also rejected by the court. 

Austria complained that Budapest had failed to uphold public procurement procedure, that state aid for failing enterprises violates EU rules, and that the nuclear power plant would strengthen MVM Hungarian Electricity’s dominant position in the Hungarian market.

The court also dismissed Austria’s claim that the nuclear power plant could reduce liquidity in the Hungarian electricity wholesale market, that the Commission had failed to account for all costs associated with the construction of the plant, and that it had failed to provide an adequate statement of reasons as EU rules demand.

The European Commission’s arguments were supported and enhanced by Czechia, France, Hungary, Poland, Slovakia, and the United Kingdom. Austria had been backed by Luxembourg in the proceedings.

“The court’s verdict is incomprehensible to me,” commented Leonore Gewessler, Austria’s minister of energy and environment. 

“We are still of the opinion that the European Commission did not make the correct decision in the context of the state aid investigation and that it is a completely wrong signal right now to classify subsidies for the construction of nuclear power plants as unobjectionable,” Gewessler stressed.

Following the dismissal of their claims by the general court, the Austrian government could take the matter up with the highest instance – the European Court of Justice. So far, no government official has explicitly stated Vienna’s intention to do so.

“We will examine the ruling very closely and then decide on further steps,” Gewessler noted.

Given the current security context, “it is extremely worrying that Russia is involved in the critical infrastructure of an EU country”, she added.

Russia-built Paks II Hungarian nuclear plant gets construction go-ahead

Hungary’s Russia-backed expansion of the Paks nuclear power plant received key authorisations from the national Atomic Energy Authority (OAH), opening doors for construction to begin in the fall.
On Thursday, OAH published decisions to authorise the nuclear power plant expansion project …

[Edited by Zoran Radosavljevic]

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