Brussels, 26/07/2001 (Agence Europe) - Rules for State aid to the coal industry expire at the same time as the ECSC Treaty on 23 July 2002. It was in this context that the European Commission presented, on Wednesday, a proposal of regulation aimed at establishing a new regime which, in addition to fixing rules for framing State intervention, provides for measures that come within the framework of the creation by Member States of a base of indigenous primary energy sources composed of renewable energy sources and coal. This base aims to contribute to the EU's energy supplies security.
The regulation proposed by the Commission (see also EUROPE of 18 July, p.12) will apply from 24 July 2002 and expire on 31 December 2010. It will, however, be the subject of Commission review in 2007, which may propose that the Council make changes applying to aid from 1 January 2008.
The new regime is based on two fundamental principles: the creation and the continuation of the restructuring process, these two aims being reached in the respect of sustainable development and Community principles on competition. More precisely, the Member States concerned should establish a plan for making coal resources secure and providing for the maintenance of a minimum production capacity of subsidised coal in order to keep infrastructure in good working order and to retain the expertise and skills of a core of miners. Maintaining a coal production capacity will thus allow mines to continue which are selected by the Member States on the basis of their economic prospects. The proposal of regulation provides for aid to be allocated to safeguard resources in order to cover the operating losses of production units, which contribute to the maintenance of access to coal reserves. Furthermore, production capacities that cannot be justifiably maintained as part of the security of energy supply can benefit from aid for the reduction of activity up to 31 December 2007 at the latest . The Commission considers that the restructuring and capacity reduction measures may thus be carried out in the best social and regional context possible. The proposal also provides for the granting of aid to cover exceptional costs stemming from rationalising and restructuring the coal industry which are not linked to current production (inherited liabilities).
This proposal, to be presented to the European Parliament and to the Council, could cause dissension among Member States, those which, like France and the United Kingdom, have deployed considerable effort to restructure the sector and are likely to oppose the maintenance of a subsidy scheme, albeit on a sliding scale. The Commission Vice-President for Transport and Energy, Loyola de Palacio, who presented the new system to the press on Wednesday said: "we (the Commission) suspect that few Member States will be ready to continue with aid to the coal sector".