Austria loses court challenge to Hungarian nuclear plant state aid

BRUSSELS, Nov 30 (Reuters) - Austria on Wednesday lost its challenge against a European Commission decision five years ago allowing Hungary to expand its Paks atomic plant as Europe's second-highest court rejected all its arguments.

The country, which shares a border with Hungary, is a supporter of environmentally sound energy and has for decades opposed nuclear power over concerns about cleanliness, safety, and renewability.

Austria sued the Commission in 2018 after the EU executive in 2017 approved Hungary's plan to build two new reactors at its Paks nuclear site, south of Budapest, with the help of Russia's Rosatom following Hungarian authorities' pledge to take several measures to ensure fair competition.

"The General Court dismisses the action brought by Austria to contest Hungarian investment aid approved by the Commission," the Luxembourg-based court said.

"Member States are free to determine the composition of their own energy mix and that the Commission cannot require that State financing be allocated to alternative energy sources," judges said.

Austria said it will examine the ruling and then decide on next steps.

"We remain of the opinion that the European Commission did not make the right decision in assessing state aid and that classifying subsidies for the construction of nuclear power plants as not of concern is completely the wrong signal to send right now," Energy and Environment Minister Leonore Gewessler said in a statement.

"It is clear that this decision is a slap in the face to all those fighting for Europe's energy independence right now," she said. "We must not forget: it is of the utmost concern that in the current context Russia is involved in the critical infrastructure of an EU country."

European Parliament lawmaker Angelika Winzig, who heads the Austrian delegation in the European People's Party, highlighted the risks of nuclear accidents.

"If the Austrian government appeals against this ruling, then I would fully support this," she said.

Austria can appeal on matters of law to the Court of Justice of the European Union, Europe's highest court.

The case is T-101/18 | Austria v Commission.

Reporting by Foo Yun Chee, additional reporting by Francois Murphy in Vienna; editing by Jane Merriman

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