Companies seeking free emissions allowances under a European Union (EU) derogation to build fossil fired power plants in Poland are facing legal challenges. Successful challenges would mean allowances would have to be bought from the market.

Projects totalling 12 GW of capacity, led by utility majors GDF Suez, Vattenfall and EDF Energy, could be affected.

Lawyers at environmental group ClientEarth allege public records show 13 Polish projects seeking free EU allowances (EUAs) from 2013 to 2020 did not have a building permit in place by an EU-mandated deadline.

This would disqualify them from a derogation in European emissions trading law, which states that power plants can only obtain free allowances if visible construction has started or operators can prove they had a valid building permit in place before 2009.

These plants have been given the right to seek free allowances, and may be included in the list of electricity plants due to be sent by the Polish environment ministry to the European Commission by 30 September 2011.

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