Brussels, 17/07/2001 (Agence Europe) - In the coming days or weeks, the European Commission will most likely be presenting the future State aid scheme for the coal industry, called upon to replace the one that expires on 23 July 2002. Responding to economic, environmental and security of supply necessities in the EU, it should provide for a downsizing of aid in view of a gradual transfer to renewable energies, which would enable the EU to maintain a "base" of indigenous primary, gradually less polluting, energy sources.
Today, four EU Member States still produce coal (Germany, Spain, France and the United Kingdom), but most of the Community coal production remains non-competitive in relation to imports from third countries. The aim of a competitive Community coal industry on the international markets is consequently definitively out of reach, and, without aid, the sector would be doomed to disappear in the very short-term. Pure economic logic would thus demand that it disappear. But, as the European Union is dependent to the tune of 50% on the outside for its energy supply, and that this dependence risks increasing to 70% in 2030, in its Green Paper on EU energy supply (see EUROPE of 30 November, 2000), the Commission recommends a policy of diversification of energy sources that involves maintaining a minimum capacity of coal production. In the European strategy for sustainable development, endorsed by the Heads of State and Government in Gothenburg, the Commission envisages the gradual abolition, between now and 2010, of subsidies to the production and consumption of fossil fuels, nevertheless stipulating that the possibility should be studied of maintaining a minimum level of coal production, the retention of a "coal base" presenting, moreover, the advantage of preserving the privileged position of European technology in the "clean" extraction and combustion of coal. The scheme that the Commission is preparing to present is therefore the result of a complex compromise between economic logic, environmental protection and a strengthening of the security of energy supply by retaining indigenous sources of primary energy.
The Commission considers that achieving the goal of the security of energy supply, which warrants subsidised Community coal production, has nevertheless to take account of economic conditions linked to the exploitation of coal, which demand the efforts at restructuring and the reduction in activity that have marked the State aid schemes implemented in the framework of the ECSC Treaty being continued beyond 23 July 2002. The future scheme, which will expire on 31 December 2010, will thus rest on the principle of a gradual decrease in aid. It should provide for two categories of aid to current production: operating aid and aid to the reduction in activity. Only the activity of production units that have made significant progress in the past in improving their economic viability could be maintained under the objective of security of supply; they would therefore be the only ones to be able to benefit from operating aid. Those units not meeting these conditions could, however, benefit from aid as a temporary measure, i.e., aid to a reduction in activity, until 31 December 2007 at the latest. The Commission, indeed, considers that the closure of these units must take place under satisfactory social and regional conditions, which means the possibility of spreading closures over several years. Discussion could also begin in Brussels on whether or not, on the margin of the future scheme, more direct Community support may be appropriate - notably through the social and regional cohesion and policy - for the restructuring of the coal industry in areas where it is a major part of the economic fabric; especially as with enlargement, the EU is preparing to welcome on board large coal producers, like Poland and the Czech Republic.
It being a question of a gradual reduction in aid, the future scheme should provide for precise objectives in terms of a reduction in aid itself and a reduction in the quantity of subsidised coal. For the Commission, the principle of a gradual reduction is aimed at enabling Member States to gradually transfer aid traditionally granted to the coal sector to the renewable energies sector. While continuing to guarantee the objective of security of supply in the framework of a "base of primary energy", this new distribution would allow for a reduction in CO2 emissions into the atmosphere. Finally, the proposal that the Commission is getting ready to present is said to provide for it later submitting proposals amending certain provisions of the future aid scheme for aid granted between 1 January 2008 and 31 December 2010.