The European Commission has authorised an investment worth €8.1 million (£6.7m) for an oil production plant in Finland.
The Commission said it found that Finnish plans to grant the investment “are in line with EU State aid rules” and will not distort competition in the market.
The main aim of state aid control is to ensure that state support measures result in a higher level of environmental protection than without the aid while at the same time “ensuring that the positive effects of the aid outweigh its negative effects in terms of distorting competition”.
Finland had notified plans to support the construction of the pyrolysis oil production in an existing heat and power plant – to be built by the Fortum Power and Heat Oy – in Joensuu in 2012, believed to be the first of its kind in the world.
Pyrolysis oil can be used in heating boilers as a substitute for heavy fuel oil and could cut yearly carbon emissions by 59,000 tonnes. The production is based on a so-called “fast pyrolysis process” where biomass is converted into bio-oil.
Joaquín Almunia, Commission Vice President in charge of competition policy said: “Pyrolysis oil provides a very good alternative to heavy fuel oil. It can be used in existing oil boilers with only small alterations, giving heat producers a clear incentive to switch to cleaner fuels. The proposed aid measure thus contributes to EU goals to reduce CO2 emissions.”