Belgian guarantee scheme is not state aid, says EC

The proposed Belgian state guarantee for nuclear operators that do not find sufficient civil liability coverage on private insurance markets does not involve state aid, the European Commission has concluded. The commission said the guarantee would improve compensation for potential victims without granting any advantage to operators.

Belgium adopted a law last December to improve compensation for potential victims of a nuclear incident. This law aims to ensure Belgium's compliance with the amended Paris Convention on nuclear third party liability from the moment the convention enters into force. Under the Belgian law, the liable nuclear operator would have to compensate victims up to €1.2 billion ($1.4 billion) for up to 30 years after a nuclear accident occurred. This compensation would cover injuries to persons and property damage, as well as environmental damage, economic losses and the cost of preventative measures taken by the Belgian State in the aftermath of an incident.

Nuclear operators generally secure their liability via the private insurance market, but it is expected that some nuclear damages covered by the amended Paris Convention cannot be covered this way. Belgium has proposed a state guarantee scheme to cover those damages, under which the nuclear operator will pay an annual premium to benefit from the state guarantee. If this is used following a nuclear accident, the operator would remain liable for damages and the state could recover the amount paid under the guarantee from the operator.

Belgium informed the European Commission in March of its intended state guarantee scheme for assessment under EU state aid regulations.

In a 14 July statement, the Commission said it had concluded the premium to be paid by the nuclear operators to benefit from the state guarantee "was set at such a level that it will not give them an economic advantage". It said the premium was sufficiently expensive to avoid "crowding out" the private insurance market. There are sufficient incentives for private players to develop competitive offers to replace the need for the state guarantee, the Commission concluded.

Belgium's revised nuclear liability law cannot come into effect until the revised Paris Protocol and the revised Brussels Supplementary Convention have been ratified by at least two-thirds of the 16 parties to it.

In 2004, contracting parties to the OECD Paris (and Brussels) Conventions signed Amending Protocols which brought the Paris Convention more into line with the International Atomic Energy Agency Conventions amended or adopted in 1997. The principal objective of the amendments was to provide greater compensation to more people for a wider scope of nuclear damage. They also shifted more of the onus for insurance on to industry. The definition of "nuclear damage" was also broadened to include environmental damage and economic costs, and the scope of application is widened. Moreover, the 2004 amendment removed the requirement for a state to restrict the maximum liability of a nuclear operator, allowing for the first time states with a policy preference for unlimited liability to join the convention.

These Paris/Brussels amendments were expected to be ratified by the contracting parties once they had consulted with industry stakeholders and then drafted the necessary amending legislation. The Paris Protocol, having been ratified only by Norway and Switzerland, is not yet in force, and the old limits still apply. These are about €360 million, including up to €210 million from the installation state.

Researched and written
by World Nuclear News