No C 232/6 Official Journal of the European Communities 30.8.83 
Proposal for a Council Regulation concerning financial support of the Community it 
favour of industries producing solid fuels 
(Submitted by the Commission to the Council on 12 August 1983) 
THE COUNCIL OF THE EUROPEAN 
COMMUNITIES, 
Having regard to the Treaty establishing the 
European Economic Community and in particular 
Article 235 thereof, 
Having regard to the proposal from the Commission, 
Having regard to the opinion of the European Par­
liament, Whereas in the case of hard-coal mines, this support 
must concentrate on potentially highly-productive 
capacity, whether already in operation or yet to be 
opened up; 
Whereas, in order to qualify for aid, hard-coal 
mining undertakings must submit for Commission 
approval a modernization and restructuring pro­
gramme covering not only the investments but also 
closures of any production capacity which is in heavy 
deficit and clearly uncompetitive; 
Having regard to the opinion of the Economic and 
Social Committee, 
I 
Whereas under Article 2 of the Treaty it is the 
Community's task to promote throughout the 
Community a harmonious development of economic 
activities, a continuous and balanced expansion and an 
increase in stability Whereas in order to qualify, investment projects in 
hard-coal mines must concern underground capacity 
where the average underground output before 
investment is at least 380 kg per man/hour or, in the 
case of new capacity, where the planned output is at 
least 600 kg per man/hour; 
Whereas the structures, machinery and buildings 
directly associated with the extraction and the 
preparation of the coal are eligible. 
Whereas in this context it is imperative for the 
Community to diversify its sources of energy supply 
in order to reduce its oil consumption; 
Whereas wider use of solid fuels is important for 
reducing oil consumption as is the production of solid 
fuels within the Community for the diversification of 
sources of energy supply; 
Whereas the development of a modern solid-fuels 
industry would have a beneficial effect on 
employment in the Community; 
II 
Whereas a high level of investment is needed to improve 
the productivity of mines with good geological and 
technical conditions and to open up new capacities with 
high productivity 
Whereas the mining industry can provide only a 
limited proportion of the substantial funds needed to 
finance these investments from its own resources; 
Whereas in the circumstances greater support from 
the Community is needed to ensure adequate 
investment in the solid-fuels industry; III 
Whereas brown coal and peat are of considerable 
importance for energy supplies and as replacements for 
oil 
Whereas some Member States have great potential 
for increasing their production and consumption of 
brown coal and peat, whether in bulk or briquetted, 
under economically attractive conditions; 
Whereas development of this potential likewise calls 
for relatively heavy investment which is too high for 
the undertakings to finance; 
Whereas producers of brown coal and peat must 
submit a long-term development programme for 
Commission approval in order to qualify for this aid; 
Whereas, in order to qualify, investments in brown 
coal and peat must increase production capacity in 
the long term and involve either preparation of the 
sites or structures, machines and buildings directly 
connected with the production of peat and brown 
coal; 
30.8.83 Official Journal of the European Communities No C 232/7 
IV VI 
Whereas the current scheme of interest relief on loans in 
support of investment in the coal industry should be 
additional to a system of direct but limited subsidies 
Whereas a limited, but substantial contribution should 
be made, in the form of direct, non-repayable aid of 
up to 25 % of the eligible investment in the coal, 
brown-coal and peat industries, within the limits of 
the appropriations entered in the budget of the 
European Communities for this purpose; 
Whereas the Commission may pay advances of up to 
90 % to undertakings receiving aid towards their 
investments; 
V 
Whereas at the end of 1983 total producers' coal stocks 
could exceed the equivalent of three months production 
of coal; whereas such a high level is manifestly excessive 
in relation to the state of the market and to security of 
supply considerations 
Whereas the financial burden imposed by these stocks 
limits the capacity to invest in modernizing the coal 
mines and making them more profitable; 
Whereas this state of affairs runs counter to the 
Community's energy policy objectives concerning the 
role of solid fuels in the diversification of energy 
supplies; 
Whereas temporary action must be taken to reduce 
existing stocks and thereby remedy this situation; 
whereas this action would help expand the solid-fuels 
market in a manner compatible with rational use of 
energy; 
Whereas this action must benefit coal-mining under­
takings which have received financial support for an 
investment project and approval for a modernization 
programme including destocking measures; 
Whereas the grant of aid must be coupled to stock 
reductions by each undertaking during the period this 
Regulation applies; 
Whereas the basis for calculating aid cannot include 
transfers of quantities which do not correspond to the 
objective of real reduction in stocks and in associated 
expense; Whereas the Community bodies must be given the 
requisite powers to manage the system and verify the 
facts 
Whereas the Commission must ensure that the aid 
granted does not adversely affect the conditions of 
competition in a manner incompatible with the 
principles of the EEC and ECSC Treaties; 
Whereas such action is in essence pan of the 
Community's economic and energy policies; 
Whereas the Treaty does not provide the specific 
powers necessary for these purposes, 
HAS ADOPTED THIS REGULATION: 
Article 1 
This Regulation concerns financial incentives for the: 
1. modernization of hard-coal production; 
2. reduction of stocks held by undertakings 
producing hard coal; 
3. production of brown coal and peat. 
SECTION I 
Modernization of hard-coal production 
Article 2 
Under the conditions laid down in this Regulation, 
the Community may grant undertakings producing 
coal non-repayable aid as a financial incentive 
towards investment in hard-coal production. 
Article 3 
To qualify for the aid provided for by Article 2, coal 
undertakings must first have obtained Commission 
approval for the modernization and restructuring 
programme for their workings, covering the period 
from 1984 to 1988 at least and possibly entailing the 
closure of highly uneconomic and obviously 
uncompetitive capacities. 
The programme must indicate forecasts for the 
following in particular: 
— technically-exploitable hard-coal reserves, location 
of the deposits and grades of coal; 
No C 232/8 Official Journal of the European Communities 30.8.83 
— the deposits being prepared; 
— the deposits where closure is planned for the 
period 1984 to 1988; 
— the annual production schedule for each pit; 
— estimated average productivity at each pit (under­
ground output per manhour); 
— estimated sales; 
— changes in annual stock levels; 
— total annual investment by the undertaking. 
Article 4 
Within the deadline which the Commission lays 
down, undertakings applying for the aid provided for 
in Article 2 in respect of a project under the 
programme referred to in Article 3 shall send the 
Commission a file covering in particular: 
— a detailed description of the project and of its 
likely impact, particularly on productivity; 
— the position which the project occupies in the 
programme referred to in Article 3; 
— the time-scale for carrying out the project; 
— the cost of the project and the financing 
arrangements proposed; 
— the timetable of annual investment expenditure; 
— details of any financial support received or 
expected from the Community or from the 
Member States; 
— current and forecast production costs; 
— evaluation of the possible effects on the 
environment; 
— the impact of the project on the employment 
situation; 
— any other information which may justify the 
Community support requested. 
Article 5 
1. The undertaking shall send a copy of the 
programme and of the project referred to in Articles 
3 and 4 to its national authorities. 
2. Prior to deciding whether to grant the aid 
provided for by Article 2, the Commission shall ask 
the national authorities to give their opinion on the 
programme and on the project within one month. 3. The Commission shall decide on the granting of 
Community aid to each project for the annual 
expenditure foreseen for its realisation. This decision 
shall be notified to the undertaking and 
communicated to the national authorities. 
Article 6 
1. Investment projects shall be eligible for the aid 
provided for in Article 2 where they concern under­
ground capacity which has, before investment, an 
average annual underground output of at least 380 kg 
(kg = kg) per man/hour or, in the case of new 
capacities, for which the planned output is at least 
600 kg (kg = kg) per man/hour. 
2. Structures and equipment, machines and 
buildings directly associated with the preparation 
(washing, screening, blending) of the coal shall be 
eligible investments. 
Article 7 
1. The aid referred to in Article 2 shall not exceed 
a maximum of 25 % of the eligible investment 
expenditure over the period for which this Regulation 
applies. 
2. Several Community aids may be combined 
towards the investment, up to a limit of 30 % of the 
eligible investment expenditure. 
Article 8 
1. By 31 January of the year following the 
expenditure for carrying out the project eligible for 
aid, the undertaking shall send the Commission all 
the relevant supporting documents together with a 
progress report on the project. 
2. Payment shall be made by the Commission once 
a year, on the basis of the undertaking's spending on 
the project over the preceding calendar year and 
within the limits of the cumulative total set out in 
Article 7 (2). 
3. The undertaking may request the Commission 
to pay it advances of up to 90 % of the amount of 
aid granted by the Commission. 
4. The Commission shall establish once a year on 
the basis of paragraph 3 the amount of aid still due to 
the undertaking, or to be reimbursed by the under­
taking should the advances have exceeded the 
definitive total for the year. 
30.8.83 Official Journal of the European Communities No C 232/9 
5. The undertaking shall compile, and send to the 
Commission, a final technical and financial report on 
each project completed, within three months of 
completion. 
SECTION II 
Reduction of coal stocks 
Article 9 
Under the conditions laid down in this Regulation, 
the Community may grant Community undertakings 
producing coal non-repayable aid related to the level 
of destocking in 1984, 1985 and 1986. 
Article 10 
1. To qualify for the aid provided by Article 9 coal 
undertakings must first have obtained from the 
Commission approval for a modernization and re­
structuring programme including reduction of its 
stocks and must have obtained investment aid in 
accordance with the provisions of Section I. 
2. Account shall be taken only of reductions in 
those stocks of coal which were produced by the 
undertaking holding those stocks. As at 1 July 1983 
these stocks must represent more than one-twelfth of 
its coal production for 1983. The undertaking must 
bear the cost of forming and maintaining the stocks. 
Article 11 
1. The grant referred to in Article 9 shall apply to 
reduction of a total of 10 million tonnes of coal, coke 
and patent fuel each year for all beneficiary under­
takings. 
2. The rate of aid shall be 10 ECU per tonne of 
stock reduction. 
3. The rate shall be reduced if made necessary 
because: 
(a) the budgetary appropriations referred to in 
Article 22 below are not sufficient to grant 10 
ECU per tonne of stocks produced in one of the 
periods referred to in Article 12 paragraph 1; 
(b) the total figure by which the volume of stocks is 
reduced in a given period exceeds 10 million 
tonnes. Article 12 
1. The assessment base for the Community aid 
shall be worked out for each undertaking at the end 
of each of the three twelve-month periods following 
the date on which this Regulation enters into force. It 
shall be equal to the reduction in stocks between the 
beginning and end of that period, the tonnages of 
coal, coke and patent fuel being counted together 
tonne for tonne. 
2. The assessment base for the Community aid 
shall not include: 
(a) any reductions in stock caused by the undertaking 
transferring amounts of coal to a storage agent 
during that period; 
(b) any reductions in stock caused by the undertaking 
maintaining amounts on its own premises at its 
own expense after transferring them to a third 
party; 
(c) any amounts which the undertaking has 
transferred to third countries during the period 
under consideration over and above amounts 
marketed in these countries during the 1983 
calendar year; 
(d) any stock reductions which bring the under­
taking's stock down, by the end of the period, to 
an amount which is equal to or less than one-
twelfth of its production of coal in that same 
period; 
(e) any stock reductions which are offset by the 
reconstitution of stock during the period to which 
the provisions in this Section apply. 
3. Undertakings shall supply the Commission with 
any reports on stock levels and any storage 
agreements which the latter considers necessary, 
giving details of the period to which they apply, 
breakdown by product, the location and ownership of 
the stocks and any information relating to marketing 
in other countries. 
4. The Commission shall pay to those undertakings 
which apply for them at the end of each period any 
amounts due to them. 
5. If an undertaking reconstitutes stocks as 
referred to in paragraph 2 (e), it shall repay the 
amount of the aid which it has unduly received. 
Article 13 
In the event of an undertaking knowingly supplying 
false information, the Commission may impose upon 
it fines which may not exceed 1 % of its annual 
turnover. 
No C 232/10 Official Journal of the European Communities 30.8.83 
SECTION III 
Production of brown coal and peat 
Article 14 
Under the conditions laid down in this Regulation, 
the Community may grant undertakings producing 
brown coal and peat non-repayable aid as a financial 
incentive towards investment in brown coal and peat. 
Article 15 
To qualify for the aid provided for by Article 14, 
undertakings must first have obtained from the 
Commission approval for a long-term development 
programme covering at least the period from 1984 to 
1988. 
The programme must indicate forecasts for the 
following in particular: 
— technically exploitable reserves of brown coal, 
location of the deposits, and grades of brown coal 
and peat; 
— the deposits being prepared; 
— the annual production schedule for each site; 
— the annual sales; 
— total annual investment by the undertaking. 
Article 16 
Within the deadline which the Commission lays 
down, undertakings applying for the aid provided for 
by Article 14 in respect of a project under the 
programme referred to in Article 15 shall send the 
Commission a file including: 
— a detailed description of the project and its likely 
impact, particularly as regards increases in the 
undertaking's production in the long-term; 
— the position which the project occupies in the 
programme referred to in Article 15; 
— the time-scale for carrying out the project; 
— the cost of the project and the financing 
arrangements proposed; 
— the timetable of annual investment expenditure; 
— details of any financial support received or 
expected from the Community or from the 
Member States; — an assessment of the possible effects on the 
environment; 
— the impact of the project on the employment 
situation; 
— any other information which may justify 
Community support. 
Article 17 
1. The undertaking shall send a copy of the 
programme and of the project referred to in Articles 
15 and 16 to its national authorities. 
2. Before deciding whether to grant the aid 
provided for by Article 14, the Commission shall ask 
the national authorities to give their opinion of the 
programme and of the project within one month. 
3. The Commission shall decide on the granting of 
Community aid to each project for the annual 
expenditure forecast for its realization. This decision 
shall be notified to the undertaking and 
communicated to the national authorities. 
Article 18 
Investment projects shall be eligible for the aid 
provided for in Article 14 where they result in a long-
term increase in the undertaking's production 
capacity compared with 1983. These projects may 
take one of two forms: 
— preparation of sites for production, 
— structures, machines and buildings directly 
relating to the production of brown coal and peat 
in bulk or briquetted. 
• Article 19 
1. The aid referred to in Article 14 shall not 
exceed 25 % of eligible investment expenditure over 
the period for which this Regulation applies. 
2. Several formal Community aids may be 
combined towards the investment up to a limit of 
30 % of the eligible investment expenditure. 
Article 20 
1. By 31 January of the year following the 
expenditure for carrying out the supported project, 
the undertaking shall send the Commission all the 
relevant supporting documents together with a 
progress report on the project. 
30. 8. 83 Official Journal of the European Communities No C 232/11 
2. Payment shall be made by the Commission once 
a year on the basis of the undertaking's spending on 
the project over the preceding calendar year and 
within the limits of the cumulative total set in Article 
19 (2). 
3. The undertaking may request the Commission 
to pay it an advance of up to 90 % of the aid granted 
by the Commission. 
4. The Commission shall establish once a year on 
the basis of paragraph 3 the amount of aid still due to 
the undertaking, or to be reimbursed by the under­
taking should the advances provided for paragraph 2 
have exceeded the definitive total for the year. 
5. The undertaking shall compile and send to the 
Commission a final technical and financial report on 
each project completed, within three months of 
completion. 
SECTION rv 
General and final provisions 
Article 21 
The Community aid must not adversely affect the 
conditions of competition in a manner incompatible 
with the principles of the ECSC and EEC Treaties. Article 22 
The aid provided for by this Regulation shall be 
granted only within the limits of the appropriations 
entered in the General Budget of the European 
Communities for this purpose. 
Article 23 
The Commission, the Court of Auditors or persons 
empowered by them shall have access to all infor­
mation on each investment or stock project for which 
a grant has been awarded. They may carry out on-
the-spot checks or inspect documents in order to 
follow progress with the project or stock movements 
and in order to ascertain how the Community grant is 
being used. 
Article 24 
The Commission shall report regularly to the Council 
and the European Parliament on the application of 
this Regulation. 
Article 25 
This Regulation shall enter into force on 1 January 
1984. 
Sections I and III shall apply until 31 December 1988. 
Section II shall apply until 31 December 1986. 
This Regulation shall be binding in its entirety and 
directly applicable in all Member States.