Brussels, 24/07/2002 (Agence Europe) - At midnight on Tuesday (using the written procedure) the Council adopted the regulation setting a new framework for state aid for the coal industry based on the ECSC Treaty (that expired at the very same moment). The regulation aims to keep specific collieries going in order to ensure energy supplies and for social and regional reasons, while encouraging the coal industry to restructure (including collieries in Germany, Spain, France and the UK). The regulation was drawn up in line with the political agreement reached by the Energy Council on 7 June 2002 (see Europe of 8 June, p.8), which foresees an aid system (which will come to an end on 31 December 2010) and a gradual cut in aid for reducing coal-mining and for access to coal reserves. Denmark and Sweden abstained from voting because they wanted the aid schemes to be cut separately not as a whole in order to avoid aid for access to coal reserves being increased under the cover of an overall reduction in aid.
Aid for collieries can only cover the costs of coal destined for electricity generation, combined heat and power generation, the production of coke and powering blast furnaces. There are three types of aid: 1) aid for reducing mining, which will be scrapped on 31 December 2007 at the latest. Such aid cannot be higher than the gap between the cost of production and foreseeable revenue for any unit, nor lead to lower EU coal costs than the cost of similar quality coal from outside the EU. 2) aid for accessing coal reserves, made up of initial investment aid (only for potentially competitive collieries with regard to prices for coal of similar quality from outside the EU to ensure economic feasibility but not exceeding 30% of the total investment cost) and aid for normal operations (only for collieries with the best economic prospects). 3) Aid to cover exceptional charges in order to allow collieries to cover the costs of restructuring unconnected with ordinary operating costs (the environmental rehabilitation of sites). Member States must notify the Commission in advance of planned aid schemes. In addition to information justifying the aid (production costs, operating plans, coal production, estimated aid sums, proportion of indigenous coal and renewable energy), they must provided before 31 October 2002 either a plan for shutting down the colliery (concerning aid for reducing mining activity) or a plan for accessing coal reserves (concerning aid for accessing coal reserves).
The Commission will report to the European Parliament and the European Council by 31 December 2006 on progress in the measures taken and their actual contribution to coal supplies and the security of the EU's energy supplies in general. The Commission may then decide to draft a change to the regulation to apply from 1 January 2008 onwards.