RESOLUTION OF THE CONSULTATIVE COMMITTEE OF THE EUROPEAN COAL AND STEEL COMMUNITY concerning the Commission communication to the Council on a Community strategy to limit carbon dioxyde emissions and to improve energy efficiency (CO2/energy tax) (92/C 127/02)

(Unanimously adopted at the 298th Session of 3 April 1992, less one abstention)

THE CONSULTATIVE COMMITTEE OF THE EUROPEAN COAL AND STEEL COMMUNITY,

- having taken note of the strategy proposed by the Commission in the abovementioned communication to the Council,

- having heard the explanations and comments by the representative of the Commission during the session of January 28th 1992,

- having also understood that the Commission is preparing a new document on the same subject,

wishes, in view of the urgency, to express its point of view at this time, while awaiting the opportunity to debate new elements that may be introduced by the document in preparation before it is used in international negotiations.

This point of view is as follows:

The Consultative Committee,

1. SHARES the concern of the Commission with regard to the risks future generations may be exposed to, resulting from the concentration in the atmosphere of greenhouse gases;

2. RECALLS the considerable degree of uncertainty and doubt surrounding the causes and consequences of the increase in the greenhouse effect, which thus remains a matter of scientific debate. For this reason, any 'insurance'-type measures to be taken will have to take account of this uncertainty, and priority needs to be given to improving knowledge of the phenomenon;

3. RECALLS that the issue is a global problem and stresses the need to work out a universal strategy concerning all human activities that affect the climate and not just those generating CO2. This problem cannot be solved unilaterally by the European Community;

Europe accounts for only 13 % of global CO2 emissions, the rest being divided between:

United States of America 23 %,

Japan 5 %,

Countries of eastern Europe25 %,

Rest of the world34 %.

The United States and Japan are hostile to the principle of taxation. Moreover, it is clear that any future increase in carbon gas emissions will essentially come from the developing countries and the eastern European countries, for which it would be unrealistic to envisage such taxation. The answer of the United States to this challenge clearly remains: 'clean coal technology';

4. RECALLS that the steel sector is subject to worldwide competition and that the European market is totally open, even to undertakings and countries which do not respect the rules of a market economy.

Moreover, ECSC sector undertakings have to bear additional charges such as the ECSC levy which undertakings from third countries do not pay;

5. STRESSES the inevitable loss of competitiveness and, thus, of employment for the European economy which would result from the decisions of relocation in favour of industrialized or non-industrialized countries that do not envisage a similar form of taxation.

Moreover, as these transfers of activity would be in favour of countries where the anti-pollution regulations are more relaxed, this would, in the medium term, result in an increase in the greenhouse effect; in other words, the result would be the opposite to that intended by this type of tax;

6. NOTES that calculations presented by the Commission would lead to a price increase for coal of 58 %, whereas the price for vehicle fuels would increase only by 6 %.

Taking into consideration the type of raw materials and energy that the steel industry is obliged to use, this increase represents a serious threat which is likely to endanger the viability of the steel sector in the Community;

7. DRAWS the attention of the Commission to the fact that, with the main market for coal shifting increasingly towards power plants, the different impact of the envisaged tax according to the type of fuel is deemed unacceptable by the coal industry in general and, in particular, by the European coal industry;

8. RECALLS that the revenue neutrality of this tax, as is desired by the Commission, would come up against very serious practical problems which would tend to increase tax discrepancies in the Member States rather than reduce them.

In addition, taking into account this theoretical neutrality and the exemptions that have been provided for, this tax will eventually hit much harder low-income consumers in the Community. Enterprises would encounter insurmountable practical difficulties, in view of the amounts involved, and would undergo a further loss of competitiveness;

9. STRESSES the fact that a CO2 tax would disturb the balance between the energy sources that have been adjusted by the Member States for their energy policies and would create unacceptable distortions of competition between the Member States.

Regarding the steel industry, the proposed tax would have a discriminatory effect depending on the process of steel-making used, whether integrated or electric arc. This is because carbon is an indispensable reducing agent which acts on iron ore;

10. EMPHASIZES that the introduction of a CO2/energy tax would cause an imbalance between fuels which could damage the Community's security of supply.

Moreover, it would slow down the indispensable decisions for investments in the clean and more efficient utilization of solid fuels;

11. RECALLS that the production of coal in the Community has already been drastically reduced. Because of this reduction and the consequent reduction in CO2 emissions, coal is the only energy source which is contributing to the objective of stabilization of CO2 emissions desired by the Commission for the year 2000.

Over the past 30 years the steel industry has reduced its energy consumption per tonne of rolled products by some 50 %. In order to remain competitive, it will continue to take measures with a view to optimizing its energy efficiency.

Tax measures are not required to achieve this objective. In the next 10 years CO2 emissions from the steel industry will be considerably reduced because of an expected increase in the use of the electric arc process;

12. REQUESTS therefore the Commission to re-examine its draft for a CO2/energy tax and to replace it with a Community action programme aiming to reduce the emissions of all greenhouse gases and not just CO2;

13. URGES the Commission to make sure that the research programmes on clean coal utilization in the iron and steel industry as well as in power plants receive the necessary financial support and that all coal producing and consuming countries benefit from the results of research aimed at improving the environment in general, and, in particular, at improving energy efficiency. In this context the Commission should play a leading role in the dissemination of research results;

14. EXPRESSES its full agreement with the Commission on those objectives of the Maastricht Treaty providing for a strengthening of the competitiveness of undertakings which is an essential condition in order to maintain Europe in the vanguard of the fight against pollution.

The Consultative Committee - for the matters which concern, it - believes that this fight against pollution must be pursued by the means of the following measures:

- improvement of energy efficiency,

-preservation of forests worldwide and economic compensation for the Third World countries which accept to protect their forests,

-rapid development of new uses for clean coal technology. Coal remains essential for the welfare of Europe and the world. This is why its use in a non-polluting manner is the only efficient method for protecting our environment on a long-term basis.