The court is considering its verdict in an infringement hearing about emissions from coal-fired Aberthaw.
It is alleged the site has been pumping out more than double the legal amount of toxic nitrogen oxides for seven years.
The UK Government argues the power station is not in breach of the rules.
It further claims that the Vale of Glamorgan plant has made major investments to try to improve its performance.
In a document summarising his opinion of the case, advocate general of the European Court of Justice, Michal Bobek, says he finds the arguments put by the UK to be "untenable".
He proposes that the court find the UK to be in breach of its obligations under EU rules to limit pollution levels.
Director of Friends of the Earth Cymru, Gareth Clubb, said: "Since at least 2001, Aberthaw power station has had no legal justification for emitting horrific amounts of toxic pollution into the atmosphere.
"The judgement spells disaster for Aberthaw. It's very difficult to see how it can avoid permanent closure once the Court of Justice reaches its final verdict."
In April, BBC Wales revealed that Aberthaw's operator, RWE, is set to downgrade the plant so that it only generates electricity at times of peak demand.
The UK government has said it wants all coal-fired power stations to close by 2025.
RWE said it was "disappointed" with the advocate general's opinion but would await the final EU court judgement.
The UK government had claimed that an exemption in the law around air pollution for plants burning low volatile coal was aimed at sites such as Aberthaw, given that the anthracite coal it uses is sourced locally, harder to burn and important to the local economy.
"Aberthaw Power Station was specifically designed to burn Welsh, regional, low volatile coal and historically, 60% of its fuel diet is Welsh," a RWE spokesperson said, adding that "the station has always been compliant with its operational permit."
"Following a successful installation of new technology to one unit  at the plant the nitrogen oxide emissions have been substantially reduced. RWE has committed to further reduce emissions and increase fuel diversity, despite very difficult market conditions."

Rudy Bruynius' two-year old daughter Mckayla is in a serious condition after the family was knocked off rocks at the beach while holidaying in Newquay.
Friends are now raising money to help Mr Bruynius' widow Lisinda and the couple's three children.
His death came on a weekend of fatalities off the coast of the UK amid stormy conditions.
A friend of the Bruynius family, Madelein Jansen Van Noordwyk, has set up a crowdfunding page, which has already raised more than Â£13,000.
On the JustGiving site, Lisinda Bruynius said her daughter Mckayla had been moved from the Royal Cornwall Hospital in Truro to the Bristol Children's Hospital. The two-year old's condition was stable during the ambulance journey.
Mrs Bruynius wrote: "Pls continue to pray for my miracle baby...for her to pull through.
"As they can't give me a certain indication of how much brain damage occurred during her time in the water."
The family, from Surrey, were swept out to sea at South Fistral Beach at 17:20 BST on Friday.
An RNLI sea scooter was used to rescue Mrs Bruynius, while a lifeboat was deployed to recover Mr Bruynius and Mckayla. They were flown to hospital where he was pronounced dead.
Police said two other children managed to get back on to the rocks and were located by the coastguard. Mrs Bruynius received hospital treatment for minor injuries.
The RNLI said the sea conditions changed considerably between 16:00 and 17:30 and crews were called to three rescues.
James Instance from Falmouth Coastguard said: "At about 16:00 BST, there were normal conditions.
"By 17:00, the swell had picked up to eight to 10ft and that massive increase in such a short period has caught quite a few people unawares."
Mr Instance warned people to take extra care near the coast.
"What should be an enjoyable experience could so easily take a traumatic turn," he said.
"Please do listen to warnings and stay at a safe distance from the water."
Visitors to the UK coastline have been urged to stay away from areas where surging waves could sweep people off their feet and to be careful of tides, as strong wind conditions mean the sea could reach higher levels than expected.
A senior legal adviser at the European Court of Justice has said the UK's position on pollution levels at a south Wales power station is "untenable".
[NEXT_CONCEPT]
An appeal has been set up to help the family of a man who died after he was swept into the sea by a large wave.