23 June 2026
Capacity markets exploit weak oversight, awarding €14bn to fossil fuels companies since 2025
- Belgium, Great Britain, Ireland, Italy, and Poland, continue to support gas plants through subsidies financed in levies on energy bills
- Risk of repeating the same mistakes as more countries—Czechia, Germany, Greece, and Spain, and most recently Portugal and the Netherlands—look to introduce capacity markets
- EU watchdog must enforce State Aid rules, including on technology neutrality and no bias towards gas
BERLIN, 23 June 2026 – New analysis from Beyond Fossil Fuels estimates that five European governments have awarded nearly €14 billion in capacity market contracts to fossil fuel companies since last year, which will be paid via levies on energy bills [1]. Since 2014, an estimated €64.7 billion has been allocated to fossil assets via Europe’s capacity markets—around 58% of the estimated €110.7 billion total value of the contracts. This points to a concerning trend: despite Europe’s intention to reduce its exposure to volatile fossil fuel markets, countries continue to design capacity market schemes that favour gas power plants over clean alternatives under weak EU oversight.
While fossil fuel crises push up gas prices and put pressure on household energy bills, established capacity markets in Belgium, Great Britain, Ireland, Italy, and Poland, continue to channel public money towards gas expansion and maintenance. This creates a double blow for consumers: subsidies are financed through levies on energy bills, costing households and businesses billions of euros, while long-term contracts lock in Europe’s expensive gas dependence.
The report highlights a concerning lack of oversight over Europe’s capacity markets. Our evidence suggests that advancements in Germany, Poland and Italy may violate EU state aid rules by skewing competition in favour of gas power plants and putting battery storage at a disadvantage. As more countries—Czechia, Germany, Greece, Spain, and most recently Portugal and the Netherlands—introduce capacity markets, there is a risk of repeating the same mistakes. In Germany, the draft ‘StromVKG’ law currently under negotiation would establish a capacity market that distorts competition in favour of gas despite the availability of cleaner and cheaper options [2]. This approach contradicts the EU’s technology neutrality rules and if approved, could set a dangerous precedent for capacity market design across the bloc.
It is particularly important that the EU watchdog, DG Competition, addresses the capacity market “wild west” this year as several existing capacity markets are due for renewed approval under EU state aid rules. Beyond Fossil Fuels urges the European Commission to enforce technology neutrality rules to ensure clean flexibility technologies have equal access; and ensure there is robust evidence of the necessity of these subsidies, originally conceived as last resort tools, so that they do not reflect political whim or bias modelling assumptions.
Juliet Phillips, Energy Campaigner at Beyond Fossil Fuels:
“With little, if any, awareness from consumers, billions of euros are being added to our energy bills to fund a fleet of gas plants across Europe, which will keep us locked into volatile fossil fuel markets for longer. Households are already struggling with energy bills, while fossil fuel giants continue to profit from public money.”
“As Europe swelters under record breaking temperatures, it’s clear our energy security needs to be fossil free. Yet, governments are bending the rules to disadvantage more competitive, clean energy solutions, to ensure that gas plants can win. This flies in the face of EU rules which demand a level-playing field for all technologies. We urge the Commission to stand up for European citizens and fight back against fossil fuel interests, supporting lower bills and energy security.”
ENDS
Contacts
Nina Tramullas, Media Manager, nina.tramullas@bff.earth, +34 676030140
Julia Pazos, Communications Manager, julia.pazos@bff.earth, +1 3109949692
Juliet Phillips, Energy Campaigner, juliet.phillips@bff.earth, +44 7443503328
Notes:
- Report: Energy market “Wild West”: European capacity mechanism 2026 state of play + methodology
- https://background.tagesspiegel.de/energie-und-klima/briefing/fuer-das-stromvkg-tickt-die-parlamentsuhr
- Beyond Fossil Fuels’ previous report on Europe’s capacity markets https://beyondfossilfuels.org/2025/01/28/capacity-remuneration-mechanisms-in-europe-report/
About:
Beyond Fossil Fuels is a civil society network committed to ensuring a just and rapid transition to a fossil-free, renewables-based future. Building upon the Europe Beyond Coal campaign, its goal is for Europe to be coal-free by 2030 and phase out fossil gas from the power sector by 2035. A clean and flexible energy system will deliver lasting benefits for people, the climate and the broader economy. Beyond Fossil Fuels is a non-profit organisation with an office in Berlin, with staff spread across Europe. www.beyondfossilfuels.org