Success for Austria's Lawsuit Against State Aid for Paks Nuclear Power Plant

Austria had filed a lawsuit with the CJEU against the decision of the EU Commission to approve state aid for the Hungarian nuclear power plant Paks II.

CJEU: EU Commission should have examined contract award for Paks nuclear power plant

The Court declared the Commission's decision to approve Hungary's aid for the construction of two nuclear reactors at the Paks nuclear power plant site null and void. The Court stated that Austria had rightly argued that the Commission should have examined whether the direct award of the contract for the construction of the two new nuclear reactors to a Russian company was compatible with the Union's procurement rules.

Previous judgment overturned

The General Court of the European Union had dismissed the Austrian lawsuit (T-101/18) against Hungary's state aid for two new nuclear reactors at the Paks nuclear power plant in November 2022. Austria had argued, among other things, that a procurement procedure for Paks II should have been conducted and that the aid would lead to disproportionate distortions of competition. The federal government then took legal action against the judgment. The Court has now overturned the judgment of the General Court and declared the Commission's approval decision null and void.

The EU Commission had approved the investment aid in 2017, which Hungary intended to grant to the state-owned company MVM for the development of two new nuclear reactors at the Paks nuclear power plant site. These new reactors were to gradually replace the four existing reactors. The Russian company "Nizhny Novgorod Engineering" was awarded the construction of the new reactors through direct procurement, according to an agreement between Russia and Hungary on cooperation in nuclear energy. In this agreement, Russia committed to granting Hungary a state loan to finance the new reactors.

Environmental organizations pleased with CJEU ruling

Greenpeace described the CJEU ruling as a "historic success." The environmental organization called on the EU Commission in a statement to implement the decision as quickly as possible, to revoke the approval of the subsidies, and to critically examine other nuclear aids. "Tax billions should not go into outdated, dangerous nuclear power, but must flow into the expansion of renewables," said Marc Dengler, climate and energy expert at Greenpeace. "Paks II would bind Hungary to risky and overpriced nuclear technology for decades and thus also endanger Austria."

The environmental organization Global 2000 sees a possible precedent for the disregard of procurement law in nuclear power plants. Similar cases should also apply to similarly situated cases. "Currently, for example, Poland is trying to directly award the country's first nuclear power plant to the US company Westinghouse. Both cases question competition and procurement law in the Common Market," said Patricia Lorenz, anti-nuclear spokesperson at GLOBAL 2000, in a statement to the APA.

(APA/Red)

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