The European Commission (EC) is launching an investigation into the UK’s plans for a Nuclear Decomissioning Authority (NDA). The European Union’s executive body is concerned that plans to move decommissioning liabilities from BNFL to the NDA will violate the bloc’s state aid rules.

The UK government plans that on 1 April 2005 the NDA will assume responsibility for managing public sector decommissioning liabilities across the country. Some of these are currently the responsibility of BNFL, some of the UKAEA. At the same time, BNFL will be restructured into a group of independent businesses, British Nuclear Group, Nuclear Sciences and Technology Services, Spent Fuel Services and Westinghouse.

BNFL’s balance sheet has long been distorted by the inclusion of liabilities inherited from the UK’s push to develop nuclear power. The firm’s annual report describes these as distorting BNFL’s true trading performance and keeping the business in loss.

An EC statement said that the asset transfer to the NDA will be done at no cost to BNFL but will relieve it from nuclear liabilities that it should normally have met under the ‘polluter pays’ principle. The commission considers at that stage of its analysis that this advantage provided by the UK government is likely to be considered state aid under of the EC treaty.

State aid may only be acceptable if its negative effect on trading conditions is outweighed by a positive contribution to other objectives under the Euratom treaty. The EC has thus decided that an in-depth enquiry would be necessary to analyse both the positive and negative effects of the move.

A recent enquiry by NEI concerning BNFL’s efforts to ensure the firm’s new structure agrees with European competition legislation was politely deflected by the firm’s press officers.

Anti-nuclear campaigners have been quick to pounce on the EC annoucenment. Mark Johnson of Friends of The Earth Europe said: “This type of ad hoc investigation by the commission is not enough. It allows the European nuclear industry to continue cheating the market, selling power below cost and then blackmailing the taxpayer when old reactors are shut down. It points to a systemic failure to govern energy markets in line with Europe’s overall political goals.”