EU probes Spain's €23.5 million payment to Japan's JGC over renewables subsidies

The European Commission has initiated a comprehensive investigation into a significant payment made by Spain to the Japanese firm JGC Holdings. The probe centers on whether an arbitration ruling ordering Spain to pay compensation to JGC violated the European Union's stringent state aid regulations.

In 2021, an arbitration court mandated that Spain compensate JGC Holdings €23.5 million (approximately $27.04 million). This sum was intended to cover alleged losses incurred by the Japanese company due to modifications made to a renewable power support scheme established back in 2007. Spain subsequently fulfilled this award by transferring the funds to Blasket Renewables Investment, a U.S.-based fund that had acquired the rights to the compensation.

The European Commission's preliminary assessment suggests that the arbitration award could be classified as state aid. If confirmed, this would mean that JGC Holdings and Blasket Renewables Investment received an undue advantage, potentially distorting fair competition within the EU's single market. The Commission will now conduct a thorough review to determine the legality of the payment under EU state aid law.