European Climate Commissioner Miguel Arias Cañete has declared an ‘end to coal in Europe’ after new EU rules were agreed to end government pay-outs to Europe’s dirtiest fuel.

This week’s deal will put an end to so-called ‘Capacity Mechanism’ payments to coal-fired power stations, pulling the plug on a vital source of funding for some of Europe’s oldest and most polluting plants.

The agreement was reached after three-way talks between governments, the European Parliament and the Commission signed-off on the final part of the EU’s ‘Clean Energy for All Europeans’ laws last night.

The Commission said the agreement was “a major step towards completing the Energy Union and combating climate change”.

New targets for renewables and energy efficiency were already agreed earlier this year.

Commissioner Cañete was under intense pressure ahead of the talks after having committed to improved 2020 climate goals at the recent COP24 conference in Katowice, Poland. Speaking after the final deal had been struck he promised:

Capacity mechanisms will not be used as a backdoor subsidy of high-polluting fossil fuels as that would go against our climate objectives.

Some national governments had claimed that the payments were required to ensure enough electricity was always available in the grid, but campaigners dubbed it ‘toxic funding’ and said they were a massive state-subsidy for Europe’s dirtiest fuels.

Joanna Flisowska, of Climate Action Network Europe, has been following the debate for months. She told META:

“Capacity mechanisms have been used as a kind of toxic life-support system for a dying industry. Pulling the plug on coal has to be the first step for any country serious about climate action”

Figures in a recent Greenpeace report suggested around €38 billion could have poured into Europe’s most polluting fuel over the coming years.

While the final deal will stop payments to new plants in 2020 and existing plants in 2025, two major loopholes will allow new contracts to continue to be signed in 2019 and existing contracts will not be affected by the changes.