ARCHIVESHISTORIQUES
DELACOMMISSION
COLLECTION RELIEEDES
DOCUMENTS "COM"
COM(81)424
Vol.1981/0133

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COMMISSION OFTHEEUROPEAN COMMUNITIES
COM(81)424 final
Brussels.28thJuly1981
DRAFTCOMMISSION DECISION (ECSC)
amending Decision No73/287/ECSCconcerning cokingcoaland
cokefortheironandsteelindustry intheCommunity
\
\
\
(presented bytheCommission totheCouncil)
pf*-®>.m
UA durv^%f
C0M(81)424final

CONTENTS
Page
A.SUMMARY 1
1.Proposal 1
2.Legal objective , 1
t3.Economic objective 1
B.EXPLANATORY MEMORANDUM 2
THEPRESENT SCHEME ' ■ - ' ' 2
4.Origins and reasons ' -2
5.Thepresent machinery (aid-fund -prices ) 4
6-Guide price v 5
7.Contracts 5
8.THE FIRMS INVOLVED "ONTHE COMMUNITY MARKET ./ - '. 6
9.Coal mines 6
10.Coking plants - 7
11.Blast furnaces .8
\
12.THE INTERNATIONAL COKING-COAL MARKET 9
\
COKING-COAL AID • 11
1.3.Production aid 11
14.Changes inthealignment margins and .the rate ofsales aid 12
15.Community financing ,14
THE NEW PROPOSAL 15
16.Durât ion 15
17.Rate ofaid 16
18.Tonnage 16
19.Contributions 16
20.Draft enacting terms 18
21.Future outlook 16
TABLES (see next .page )

TABLES
Inthetext
A.Guideprice.,proceeds andproduction costs 11
B.Alignment marj"ins 13
C.Alignment margins andsalesaid 13
Separate fromthetext
I.Guidepricemovements since1970inUSdollars,EUA/ECU,andthe
currencies oftheproducing countries pertonneforthe
standard arade 19
II.Community coal1980 20
III.Application ofDecision No73/287-Distribution of
infra-Community deliveries 21
IV.Community coke1980 22
V.Blast-furnace coke-consumption -quantifies .received
inintra-Community trade 23
VI.Thecokerateinblastfurnace 24
VII.ImportsofcokingcoalintotheCommunity 25
VIII.Aidinrespectofintra-Community trade 26
IX.Rateofsalesaid 27

. EXPLANATORY MEMORANDUM
Considerations relatingtotheextension andamendmentofDecisionn°73/287/ECSC
of25July1973concerning cokingcoalandcokefortheironandsteelin­
dustryintheCommunity (1).
A.SUMMARY
1.TheaboveDecisionappliesuntil31December1981.TheCommissionis
proposingtoextenditsperiodofvalidityuntil31December1983whileslightly
adjustingcertaindetailsinordertobringthemintolinewiththepresent
situation (seeNo.16).
.Duringthetwo-yearextensiontheCommunityshouldestablish ageneral
coalstrategywhichshouldcoverthenewroleofcoalandmetallurgical coke.
Thisshouldbedonewithoutperturbing thesupplyconditions inthat
sector(seeNo.21). > v
2.Thelegalbasisforthecoking-coal schemeisthefirstparagraphof-
Article95oftheECSCTreaty,asaresultofwhichithasbeenpossibleto
establishmachinerycomprising :
(a)aCommunity schemecoveringtheMemberState'snationalaidtocoking-coel
producers,
(b)thefinancingofCommunityaidforsalesinthecontextofintra-Community
trade,
(c)pricingrulesextendingthealignmentpossibilities affordedto.thecoaL
firmspursuanttothelastparagraphofArticle60(2)(b)oftheECSCTreaty.
3.TheDecision'sbasiceconomicobjectiveisstillthemaintenance within'
theCommunityofsufficient cokingcoalproductioncapacitytoensureoptimum
collieryactivityandguaranteesecurecokesuppliesfortheiron.andsteel
industrya.treasonablecosts.
Theschemeestablishes Communitysolidarity againstthecontinuing
uncertainties .or>'theworldcoking-coal market;italsolaysdownconditions
fortransparency andnon-discrimination .
./2
(1)OJNo.L259,15.9.1973,p.36

B.EXPLANATORY MEMORANDUM
THEPRESENT SCHEME
4.Origins andreasons
Particularly sincethe1960s,cokingcoalhasoccupied aleading
placeintheMemberStates'andtheCommunity'scoalpolicyconsiderations ,
sinceitprovides,intheformofblast-furnace cokeforpigironproduction ,
anessential andexpensive rawmaterial fortheironandsteelindustry,
while wherethermalapplications areconcerned ,inparticular electricity
generation ,theothertypesofcoalandtheothersourcesofenergy (oiletc.)
aretoagreatextentinterchangeable .
IntheenergyProtocol of21April1964,theMemberStatestookthe
viewthattheCouncilshouldpayparticular attention tothequestion ofthe
Community 'slong-term coking-coal supplies (1),andintheProtocol of16Fe­
bruary1967,theMemberStatestookintoconsideration (2):
(a)activecompetition fromnon-member countryproducts ,and
'b)thesignificance ofintra-Communitytrade,
anddecided toestablish forthesectorinquestion :
(a)aspecialaidschemeforcoalfirms,and
(b)asctiemeforoffsetting burdens inrespectofintra-Community trade.
TheCouncil andtheConsultative Committee havebeenconsulted ,as
required byArticle 95oftheTreaty,onthesuccessive decisions takenbythe
Commission inthisfieldsince1967,andtheoutcomeoftheseconsultations
hasshownthatTheCommunity considers thatitisinthecommoninterest
oftheMemberStatesandofthecoalandsteelindustries toparticipate in
aschemewhichseekstoattainseveralobjectives setoutinArticles 2and
3oftheECSCTreaty.
./3
(i)OJNo69,30.4.1964 ,p.1099,point12
(2)0JiVo36,28.2.1967,p.561.

\ .»
f ' . .
-3- -■■·!■
\ -
Themaintenance withinJheCommunityofanadequatecoking-coal and
cokeproduction capacityinconnection withtheconsiderable volumeof
intra-Communitytradeincoalandcokeisintendedtohelpensuregoodsecu­
rityofsupplyfortheironandsteelindustryintheCommunity asawhole.
TheCommunitycoal-mining industry'sproduction costsarecoveredbyselling
pricestotheironandsteelindustrywhichareascloseaspossibletothe
worldpricesforcomparabletransactions ,plusspecificaidcalculated in
accordance withCommunitycriteria.Thisestablishes conditionsfortranspa­
rencyandnon-discrimination withintheCommunity andapricelevelcomparable
withthatobservedforcompetingironandsteelindustries'.Inthisway,it
ispossibletoavoidtransferring partoftheCommunity demandforcokingcoal
totheworldmarket,sincethismighttriggeralargeincreaseinthelevel
ofworldcoalpricesingeneral.
5.Thepresentmachinery
TheDecisionnowinforce(No73/287/ECSCof15July1973(1)),was
initiallyadoptedforsixyears.Itwasextendedforafurtherthreeyears
asaresultofDecision No1613/77/ECSCof15July.1977(2),andcertain
procedures werealteredbyDecision No3058/79/ECSCof19December1979(3).
ThetextwhichnowapplieswaspublishedinOJNoC26of13February1980,
page2.Itappliesuntil31December1981.
Thedetailedrulesforimplementing thisDecisionweresetoutin
Decision No3544/73/ECSCof20December1973(4),whichhasremainedvirtually
unchangedsincethen.Thescheme,whichwassetuponthebasisofthefirst
paragraphofIrticle95oftheECSCTreaty,hasthreemainaspects:
(1)0JNoL259,15.9.1973,p.36
(2)0JNoL180,20.7.1977,p.58
(3)0JNoL344,31.12.1979,p.1
(4)OJNoL361,31.12.1973,p.18
1

-4-
(a)ACommunity systemoffinancial aidtofirmsproducing cokingcoaltobe
Aids usedintheformofcokeinblastfurnaces (1)
IfthecostpriceofCommunity coalexceedsthepriceofcoalonthe
worldmarket,theMemberStatesmaygrantproduction aid,supplemented ,
whereappropriate ,bysalesaidinrespectofdeliveries toremoteareas
orothercountries ,
(b)Inthecaseofdeliveries tootherCommunity countries ,salesaidmaybe
repaidviaaCommun_ity_f undtowhichspecialfinancing rulesapply(2).
Fundintervention coversnomorethan15milliontonnesperannum,subject
Fund toaceilingof47million ECU.Fundingisfromthreesources :theECSC
(6million ECU),theironandsteelindustry (17million ECU)andthesix
MemberStatesnormally involved inthetradeinquestion (24million ECU
atmost,lessifthefund'srequirements arelessthan47millionECUK3).
For1980theaveragerateofCommunity salesaid(whichvariesdepending
ontheblastfurnace'slocation )was3.10ECU,whiletheaveragerateofpro­
ductionaidpertonneintheproducing countries wasasfollows :
Belgium 42ECU
Germany 21ECU
France 24ECU
UnitedKinqdom 16ECU.
(c)PMcincjrulesextending thealignment possibilities afforded tocoalfirms
bythelastparagraph ofArticle 60(2Kb)oftheECSCTreaty.
./5
(1)Article 1and2ofDecision No73/287
(2)Articles 6,7and8ofDecision i\lo73/287
(3)TheUnitedKingdomironandsteelindustry'scontribution ispaidto
theUnitedKingdomprovided thatthecokingcoalproduced intheUnited
Kingdomcoversatleast75%oftherequirements ofitsblastfurnaces
(Secondindentandlastparagraph ofArticle 6inconjunction withthe
penultimate paragraph ofrecital IV).

Undertheserules,sellingpricesmaybealigned onworldmarketprices
evenifthereisnoactualcompetition withcokingcoal6rcokefrom >
non-rmember countries atthepointofconsumption (1).
'TheDecision alsocontains thefollowing provisions ,whicharedesigned
toguarantee theCommunity character 4oftheoperation ofthisschemeandcom­
pliancewithcertainlimits,including financial limits:
6.periodical publication ofagujde_grjcebytheCommission :calculated
:<onthebasisoflong-term supply *contracts forcoking-coal fromfree-market -
economycountries,thisvalueissupposed torepresent allthe.financial
1 .• /• i •
burdensarisingfortheEuropean ironandsteelindustry in.connection with
.itscokingcoalsupplies fromnon-member countries ;ittherefore consti-
^tutesthebasisforcalculating production aidinthefourMemberStates
•s • .
concerned andthebasisforsalignment wherealltransactions involving
Community coalorcokeareconcerned (2). .»■V</::;■■■",•;\ ;'■■■
TableIindicates howtheguidecifpriceARAhasalteredsinceitwas
firstpublished (1970-81 )inUSdollars,EIA/ECUandthecurrencies of
theproducing countries .Table Abelow(page11)enables acomparison
» . V !
'tobemadeofrecentdevelopments intheguideprice,production costs
andproceeds intheCommunity . ^ .
7.Provisions concerning long;term_contracts forsuppliestotheCommunity ,(3):
the-above aidandalignment arrangements applyonlytoquantities covered
1 v ■■
bysuchcontracts ;thesecontracts,whichallow ,forreasonable margins,
enablethetwopartiesconcerned toplanaheadandhelpreducethe
problemofstocks(4).' . ■
M - ■' '. ' 1
,(1)Article 's3and4ofDecision No73/287 *
(2)Article 5
(3)Article2(c)ofDecision No73/287andArticle 3ofDecision Np3544/73
(4)Theimplications ofprovisions relating tolong-term contracts werethe
subjectofaCommunication dated30December 1974(0JNoC160,30.12.1974 ,
p.1).-Theconditions relating totheperformance oflong-term contracts
wereamendedfor1977and1978byDecision No2216/77/ECSC(0JNoL256,'
7.10.1977,p.12)andDecision No2287/78/ECSC(0JNoL275,30.9.1978,p.78)
inorderto'takeaccountofthesituation inttieironandsteelindustry .

8. THE FIRMS INVOLVED ONTHE COMMUNITY MARKET
Asemerges from thedescription given above ,thescheme relates to
the supply chain constituted bythe coal mines ,the coking plants and the
blast furnaces ,and isintended tohelp these sectors ofECSC activity to
operate efficiently .The situation ineach ofthese three sectors isexamined
below .
9. Coal mines
Much ofthe Community production will still beloss-making inthe
foreseeable future .
The scheme has sofarmade itpossible tomaintain coking-coal pro­
duction capacities atthe desired level ,aswell asthe requisite workforce
and the corresponding level ofsales .
In1980 ,the amount ofcoking coal produced inthe Community for
coking plants totalled 62million tonnes ,or25%ofthe coal produced ,the
remainder being forthermal applications .Thepercentage varies from country
tocountry (Belgium 62%,Germany 46%,France 25%and United Kingdom 8%).
Itwas lower than inearlier years ,because ofthe reduction iniron and steel
production andthe increase inimports ofcoking coal andpetroleum coke from
non-member countries .After power stations ,the iron and steel industry still
represents aconsiderable outlet for Community coal .Coking coal isavital
source ofactivity formany mines and regions .
./7

-7-
Itaccounts foroverhalfthevolumeofintra-Commumty tradeincoal.
Moreover,mostofthecoaltradedishi^h-grade coalwhichisonlyavailable
insmallquantities ontheworldmarketandwhich,'whenusedinablend,
makesitpossible tomakegreateruseofthecheapertypesofcokingcoal.
V I'
Theamountofcokingcoalandblast-furnace coketradedwithinthe
Community fellfrom20milliontonnescoalequivalent in1974to14million
tonnesin1980,thenadirbeing12milliontonnesin1977(1).
,Forcokingcoalandtheothertypesofcoal,thecoalminesplayan
,important stockpiling rolewhichisoftenofoutstanding service.
■ ' •.<; v
,TableIIprovidesdata relating to1980forthefourproducing countries
concerning coalproduction ,deliveries tocokingplantsandintra-Community
-trade. ' '
, Î
TableIIIindicates fortheperiod1973-77theannualaveragefor :
intra-Community deliveries tocountries ofdestination ,andthedistribution -
betweeninlandandcoastalareas-ofquantities eligible forCommunity aid.
ι
10.Cokingplants •
yCokingplantsrepresent avitalaspectofthesecurity ofsupplyof
blastfurnaces .Thecokeproduction capacity intheCommunity isatpresent 1v
around80milliontonnes;production in1980exceeded 66milliontonnes,
necessitating asupplyof86mi11ion»tonnesofcoal. -
Ofthistotal,64%wasfromindigenous resources,8%fromelsewhere
in.theCommunity and28%fromoutsidetheCommunity .Thetotalfigurleof72%
forCommunity coalrepresents acomparatively highdegreeofsecurity .
■ "/ ./8
• : '\
(1)Onetonneofblast-furnace cokebeingcountedas1i33tonnesofco.al.

Thequantities producedinCommunitycokingplantscovervirtuaIly
alltherequirements oftheironandsteelindustry.Withoutexception,thefew
importsfromoutsidetheCommunity concerncokebreeze.
Ironandsteelindustrycokingplantsaccountforalargeproportion
(53%)ofthetotalcapacity.Mine-owned cokingplantsplayadecisiverole
inintra-Community tradeincoke(7.5milliontonnesin1980),andhelpoffset
fluctuations incoalproduction andthedemandforcoke.Theexistenceof
certainmine-owned cokingplantsisdependent onoutputfromamineinthe
vicinity,andinsomecasesalsoonoutputfromblastfurnacemoreorlessin
thevicinity.Mine-owned andindependent cokingplantsalsocovercokerequi­
rementsoutsidetheironandsteelindustry.
Underthecoking-coal scheme,therulesrelatingtothepriceofblast-
furnacecokerequirecoverageofthecokingplants'netcokingcosts,since
theviabilityoftheexistingcokingplantsshouldbepromoted soasnotto
I
increaseundulytheinvestment requirements inthissector,particularly ata
timewhentheironandsteelindustryisundergoingrestructuring .
TableIVcontainsdatarelatingto1980forthecoke-producing coun­
triesasregardsproduction,deliveries toblastfurnacesandintra-Community
trade.
11.Blast-furnaces
Atleastuntil1985,steelmaking intheCommunitywillcontinuetobe
basedmainlyonblastfurnacepigironandhencetheuseofcoke-oven coke.The
hopesplacedinthealternatives havebeendisappointed .Formedcokeisstill
atthedevelopment stage,theinjectionoffueloilintoblastfurnaceshas
ueclinedconsiderably asaresultoftheriseinthepriceofoil,resulting
inamarkedincreaseinthespecificconsumption ofcokepertonneofpigiron.
Thisincreasehastosomeextentoffsetthereductioninpig-ironoroauction
observedinrecentyears.Researchisofcoursecontinuing withaviewtoredu­
cingthecokerate.
Blast-furnace cokeconsumptionfellfrom60milliontonnesin1974to
46milliontonnesin1980,
./9

-9-
Thegrowingproportion ofpig-ironproduction accountedforbymodern
blastfurnacesentailsmorestringentrequirements asregardsthequalityof
thecokeused.Theserequirements canbesatisfied asaresultofcooperation
betweenCommunitycoalmines,cokingplantsandblastfurnaces.''
TableVindicatesfor1975,1977and1980thetrendintheconsumption
ofblast-furnace cokecountrybycountry,andtheproportion accountedforby
suppliesofcokefromotherCommunitycountries (5,8milliontonnesin1980).
Table\ifIgivesthetrendinthecokerate(specificconsumption ofcoke
pertonneofpigiron)inthedifferentcountriesfor1975,1977and1980,and
forecastsfor1981,
12."THEINTERNATIONAL COKING-COAL MARKET '
Cokingcoalhasaspecialpositionintheworldcoalmarket.Until1977,
itWasinfactthefocalpointofthismarket.
Since1979,this.rolehasbeenplayedbysteamcoal,thesubstitution
ofwhichforoilinthermalapplications hasboostedtheinternational market
(198milliontonnesin1978,229milliontonnesin1979and232milliontonnes
in1980),eventhoughfewnewexportingcountries havecommencedactivities .
Cokingcoalaccountsforaround130milliontonnesofthistotal,which
indicatesthattherehasbeenaslightreductioninrecentyears.Anupturnin
economicactivitywouldreversethistrend.Manyconsumingcountries have
acquired,orareendeavouring toacquire,controloverreservesinnon-member
countrieswhichwouldenablethemtodiversifytheirsupplies,butdeliveries
totheCommunityfromtheseminesarestillonthe'smallside,andsignificant
resultswillbeachievedonlyinthemediumterm.
.!<···
TableVIIindicatesthetrendincoking-coal importsintotheCommunity .
In1979,32%ofworldcoalexportswerefromNorthAmericaand30%
fromEasternEuropeandtheSovietUnion. «
./10

-10-
Althoughrecordtonnageswereachievedin1980,certainfundamental
difficulties andbottlenecks inthecoalsupplychainalsoappearedintnese
twoandotherareas.Theverysignificant reductionindeliveries ofPolish
andRussiancokingcoalforanindefinite periodiscallingintoquestion
muchoftheprocessofdiversificationwhichhasbeengoingonformanyyears.
Thisiscompounded bydelaysaffectingloadingintheUnitedStatesofAmerica
asaresultofportcongestion since1980andthestrikebyunionized minecs
fromMarchtoJune1981.Deliveries fromothermajorsuppliers-Australia and
SouthAfrica-couldremainlimitedinthenearfuture.
Onamarketthatisalwayssensitive,Communitypurchasers canexDect
toencountervariouskindsofdifficulties inthenextfewyears,inparticular :
(a)anexpansioninthecoking-coal requirements ofothersteel-producing
countries (e.g.Japan-anincreaseof5milliontonnesbetween1980and
1985,Brazil,Korea,Canada),
(b)aswitchinthedemandforsteamcoaltocertaincommercial gradesof
cokingcoalwithproperties thatareattractive asregardspollution-control
regulations (sulphurcontentetc.),
(c)effortsbythosesellingcokingcoaltokeepupwiththepriceincerases
acceptedbythosebuyingsteamcoal,
(d)limitedcapacityinseveralportsofloadingintheexportingcountries .
Thesedifficulties ofadjustmentexplainthefeelingofinsecurity
experienced byEuropeanconsumerswheretheshortandmedium-termsupply
conditions ontheworldwoking-coal marketareconcerned.Theyshowthatthe
transfertotheworldmarketofasignificantproportionofCommunitydemand
couldcomeupagainstquantitative andqualitativelimitsandtrigger5further
pricerise.Afteraperiodinwhichpricesrosemoderately (by10%early
1979andlate1980),coking-coalpriceshaveonceagavistartedtoclimb
steeply.Itshouldberecalledthatbetweenearly1974andmid-1975theguide
pricerosefrom32to62dollarspertonne(28to50ECU).InApril1981it
was80dollars (76ECU).
./11

-11-
COKING-COAL AID
13.Production aid
TableAbelowmakesitpossibletocomparethecostpricesofCommu­
nityandimportedcokingcoal.Itshowsthatthecompetitive situationof
> *
»■'·_*'■■■■■\
TABLEA''/
valuepertonne/
YearGuideprice(1)
Dollars USDM .EUA
ECUNet
.for
DMproceeds
producers
EUA
ECUProduction cost
DM EUA
■■'ECU
1976 63 ;159 5615354 -155 55
1977 62„145 55 13852 160 ·.60.
1978'·62 125 49 123'48 168 .66
1979 65 120 ;48;.11546/178 71"
1980 69 ■126 50.125 >50'■200 79
(1)DeliveredNorthSeaport(ARA:Amsterdam,Rotterdam,Antwerp).
Thefollowing commentsarecalledforwherethistableisconcerned :
(a)theguidepriceexpressedindollarsincreasedbylessthan10%,butonly
asfrom1979; /
(b)theequivalentvalueexpressedinDMfellbyover20%,despitea5%rise
in1980,asaresultofthefallinvalueofthedollar.Thenetproceeds
forproducersfollowedthesametrend;
(c)theproduction c6stexpressedinDMrosebynearly30%.Thedifference
betweennetproceedsandtheproduction Costrosefrom2to75DM(orfrom1
to30EUA/ECU)pertonne.
Thedifference betweenproduction costsandproceedsreflectsthealignment
ofsellingpricesonworldcoking-coal prices,takingintoaccountthe"cokeand
i -x
coalstockpiling costsbornebyCommunitycoalfirms.
Production aidinGermany,whichhasbeennilsince1974,roseto13.50
DM/tin1977,41DM/tin1978,48.50DMin1979and53DM/tin1980(0.5,16,
19and21EUA/ECUrespectively).
../12
I

-Id-
.Atthebeginningof1981thetrendwouldseemtobeintheopposite
direction .Theguidepriceexpressedindollarsrosebyover10%insixmonths
comparedwiththe1980average,asaresultoftheincreaseinthevalueofthe
dollar,andtheequivalent valueinDMrosebyover20%(approx.25DMor
10ECU).Communitycoalfirms'proceedsin1981maybeexpectedtoincrease
byslightlymorethanthecostprices.InGermanythedifference betweenthe
worldmarketpriceandthecostofproduction iscurrently (July1981)about
25DM(10ECU)/tonne.
Oneofthereasonsforthischangeinthetrendisthefactthattrans­
portation costsforcoalfromnon-member countries haveforsometimebeenri­
singmoresteeplythanintra-Communitytransportation costs.Forexamplethe
Atlanticfreightcharge(USA-ARA)componentoftheguideprice,whichstood
at16DM/t(6ECU)in1980-asitdidin1974-hadreachedthefigureof'
27DM/t(11ECU)inthefirstquarterof1981,and34DM(13ECU)inthesecond
quarterof1981,including demurrage charges.Ittherefore exceedsthecostof
carriagefromtheRuhrtoGenoabyseaortoLorrainebyrail(approx.31DMor
12ECUpertonne).Thisfreightchargeisworkedoutchieflyonthebasisof
long-termcontracts .Thespotmaritimefreightchargesarehigheratpresent.
14.Changesinthealignment marginsandtherateofsalesaid
TableBbelowsummarizes thechangesbetween1972and1981inthealign­
mentmargins,.i.e.thedifference betweenthepriceofnon-member countrycoking
coalandthatofCommunitycokingcoalatthepointofconsumption .Coalfirms
areauthorized bytheDecisiontograntrebatesnotexceedingthisdifference .
TakingGermancoalbywayofexample,fivetypicalpointsofdeliveryareconsi­
dered:fourremotefromcoalfields (twoonthecoast,twoinland)andone
closetoacoalfield .Thedifferences areexpressed indollarsandEUA/ECUper
tonne.
./13

-13-
TABLEΒ
♦
1.7.72 1.1.78 .1.1.81
tDollar EUA/ECUDollar EUA/ECUDollar EUA/ECU
Genoa(It) 13 12 36 26 45 34
Rotterdam (NL)10 9 31 23 35,27
Liège(Β) 8 7 26 ,·19 32 24
Thionville (F)7 6 24 17 34 26
Duisburg 5 4 22 16'25.,19·ι
Thefollowing remarksarecalledfor:
(a)allthealignmentmarginshaveincreasedsignificantly inrecentyears;
(b)thealignmentmarginincreasesthefurtherawaythecoalfieldis;
Cc)themarginisgreaterinthecaseofcoastalsteelworks-whichiswhytwo
differentratesofproduction aidhavebeenset(seeTableIX).
TableCbelowindicatesthe.trendinthedifference betweenthealignment
marginsforDuisburg (D)andthoseforthefourotherpointsofdelivery,on
theassumption thattheproduction aidcanattaintheleveloftheDuisburg
alignmentmargin.
TABLEC
Genoa(It
Rotterdam (NL)
Liège(B)
Thionville (F)1972
Dollar EUA/ECU
8 8
5 5
3 3
2 21978
Dollar
14
9
3
2EUA/ECU
14
7
3
11981
Dollar
20
.10
-7
9EUA/ECU
15
8
,5
7
Itshouldbenotedthatinint'ra-Community tradethesalesaidcovers
adecreasing proportion oftheabovedifference .
-/14

-"|Λ_
In1973,therateofaid-setat2EUA(2.46dollars )pertonneon
average-covered roughly 20%ofthehighestdifference in1972andallof
thelowestone.In1978,witharateof2.10EUA(2.67dollars )pertonnethe
proportions werestillmoreorlessthesame.In1981,witharateof3.10ECU
(4.30dollars )pertonnetheaverageratenowcovershalfthelowestdifference
and20%ofthehighest one.Infact,asaresultofthetwodifferent rates
(2.60ECUforinlandworksand4.40ECUforcoastal works)45%ofthediffe­
renceiscovered inthecaseoftheformerand30%inthecaseofthelatter.
15.Community financing
TheCommunity financing arrangements fortheaidpaidinrespectof
intra-Community tradeareasfollows :
(a)from1967to1969:contributions fromtheMemberStates
(b)from1970to1972:contributions fromtheMemberStatesandfromtheECSC
Budget
(c)from1973:contributions fromsixMemberStates,theECSCBudgetandthe
ironandsteelindustry .
Therespective amounts havebeenasfollowssince 1January 1980:
(a)ECSC: 6millionECU
(b)Ironandsteelindustry :17million ECU
(c)SixMemberStates : nomorethan24million ECU.
OnlytheMemberStatesbenefit fromthesavingarising fromthefact
chat,atpresent,asthevolumeoftradeisbelowthe15milliontonnesper
annumceiling,thefinancing requirements arebelowthe47million ECUmaximum .
Thisisaspecific financing systemreflecting verypragmatically the
interests oftheparties concerned andgivingexpression totheclosely-
intertwining natureofthethreecomponents ofthescheme :aid,commercial rules
andfinancing .
./15

Thepossibility ofthecoking-coal fundbeingfinancedviatheGeneral
Budgethasbeenraisedseveraltimes,andinparticular in1979-firstofall
byParliament andsubsequently bytheCouncil.
Basically,theCommission wouldbepreparedtoproposesuchamethod
offinancingoncetherequisitepre-conditions werefulfilled.However,such
aproposalwouldhavetobepartofthe^frameworkofamorestructured andfi­
nancially.betterendowedCommunityenergypolicythanatpresent,andonein
whichprovision wasmade,therefore,forcoalpolicyasanintegralpartof
energypolicy,andinparticularforthecoking-coal aidscheme.
Pendingtheculmination ofsuchanoverallplan,itwouldseemtobe
appropriate toextendthepresentcoking-coal aidschemetemporarily forat
mosttwoyears. '
Withregardtotheextensionoftheexistingsystem,itshouldbespe­
cifiedthattheoperationof.theCommunityfundisregularlycheckedbythe
CourtofAuditors,andthattheCommissiondepartments responsible formanaging
itregularlyprovidethedepartments intheMemberStateswithbackgroundin­
formation ontheusemadeofthefunds.
TheCommission'sinspection departments and/ortheMemberState'sfi­
nancialcontroldepartments checkthefirms'operations whichgiveriseto
financingatnationalorCommunitylevel. ■ .,
TableVIIIshowsthetrendinaidinrespectofintra-Community trade
from1975to1980.• ,- ~
ν·' .Ϊ''' "·' ·'·.· ~
'THENEWPROPOSAL / '
16.Inthelightoftheforeseeable medium-term situation,theCommission
isproposing : "
(a)toextendtheperiodofvalidityofthepresentDecisionforafurthertwo
years,i.e.until31December1983;- .
(b)tomakeaslightimprovement intheratesofsalesaid;-
(c)toreducethemaximumtonnageinvolvedinintra-Community tradetowhich
Communityfinancingapplies.

-Io-
17.Inthecaseofsalesaid,itwouldbeaquestion ofslightlyraising
Rateofaidtheextenttowhichsalesmarginsarecovered (seepoint14above)withaview
tofacilitating intra-Communi tytrade.Themaximumrateofsalesaidwouldbe
increased (1):
(a)from4.40to4.70ECUpertonneforworkssupplied bysea,and
(b)from2.60to2.80ECUpertonneintheothercases.
(TableIXshowstrendinsalesaidsincetheschemestarted).
18.Themaximumquantity towhichCommunity financing applies wouldbe
lonnage reduced from15to14million tonnesinordertotakeintoaccountthetrend
inintra-Community tradeobserved inrecentyearsandthemedium-term forecasts .
19.Themaximum amountofCommunity financing wouldstillbe47million ECU,
thethreecontributions wouldstaythesame(ECSC6million ECU,ironandsteel
industry 17million ECU,MemberStates24million ECU),andthesamescaleof
payments bythesixMemberStateswouldapply :
Gerrnany 7.75million ECU
Belgium 3.25
France 7
Italy 3
Luxembourg 1.50 '
Netherlands 1.50 ' '
20.Thetextofthedraftenacting termsisattached (p.18).
21.FUTURE OUTLOOK
Thecokingcoalschemewasestablished onthebasisofpolitical consi­
derations intheCommunity andtheMemberStatesin1967.Ithas,withcertain
modifications ,beenrenewedseveraltimesandhasthusbeenapplicable for14
years.Meanwhile ,andespecially sincethelastprolongation ofthescheme,the
problems oftheCommunity'senergysupplyandthesituation ontheworldcud
markethaveundergone profoundchanges.Ingivingitselfnewenergyobject „e.
for1990,theCommunity hasbeguntoadaptitsstructure anditsconditions ot
supplyandconsumption .TheCommunitysteelindustry,too,ispassingthrou^'
adifficult periodofstructural change.
(1)Decision No77/287/ECSC,Artide 1(b).

-17-
Ittherefore seemsLogicaltore-examine,inthecontextofa
coherentenergypolicy,alltheproblemsrelatedtoacommoncoalstrategy
includingthoseofthesupplyofcokingcoalandcokeforthesteelindustry.
Therenewalofthecurrentschemefortwoyearswillprovideasuitable
periodtofacilitate thedefinitionofthisnewapproachinliaisonwiththe
(
partiesconcernedwhileavoidingtheintroduction intothepolicyofprejudicial
uncertainties ordiscontinuities .
1Annex
9tables(numberedItoIX)
\

ANNEX
DRAFT
COMMISSIONDECISION ^ECSc)
amendingDecision No73/287/ECSCconcerning cokingcoalandcokefortheiron
andsteelindustryintheCommunity
Article 1
Decision Mo73/287/ECSCisherebyamendedasfollows :
1.Article 1(b)shallreadasfollows :
"asalesaidapplyingtodeliveries madetoareasremotefromthecoalfield
oreffectedbywayofintra-Community trade.Therateofanysuchaidmay
notexceed4.70ECUpertonneofcokingcoalinthecaseofdeliveries to
installations whichcanbesupplieddirectbyseaorwhereinthecaseof
intra-Community trade,carriagebyseaisnecessary,and2.80ECUpertonne
ofcoalinallothercases.NoscaleadoptedbyaGovernment shallintroduce
anyelementofdiscrimination intotheaidsrelatingtothedeliveries made
bythecoalundertakings ".
2.Article 7(1)shallreadasfollows :
"TheCommunityfinancing arrangements shallcoveranannualquantityofcoel
amountingtonomorethan14milliontonnesandanamountofnomorethan47
million ECUperyear".
3.Thesecondandthirdparagraphs ofArticle13shallreadasfollows :
"Thisdecisionshallceasetohaveeffecton31December 1983.
ThisDecisionshallbebindinginitsentiretyanddirectlyapplicable in
allMemberStates".
Article2
ThisDecisionshallenterintoforceonthedayofitspublication inthe
OfficialJournaloftheEuropeanCommunities andshalltakeeffectfrom1Ja­
nuary1982.
ThisDecisionshallbebindinginitsentiretyanddirectlyapplicable inall
MemberStates.
DoneatBrussels,
FortheCommission

TABLEI
1.^.1931GUIDE-PRICEMOVEMENTS SINCE1970INU$DOLLARS,EUA/ECl)ANDTHECURRENCIES
OFTHEPRODUCING COUNTRIES PERTONNEFORTHESTANDARDGRADE<1)(2)
(1)Annualaverages,butquarterlyfigures.for1981
(2)Properties :ash 6%(drybasis)
moisture 5%•
sulphur 1%(drybasis)
volatilematter 24%(drybasis)
•-sizerange •0-30m/mYear DOLLAREUA/ECU ...DM BfrsIIPOUND
1970 18.75 18.35 68.63 937.50 .104.15-
1971 23.75 22.67 86.93- 1187.50 131.93.-
1972 23.93 21.33 77.11 1072.44-12242
m-
1973 26.43 21.46 79.49 1116.65 129.77 -11.19
1974 45.31 37.99 117.97 1776.35217.99 19.33
1975 61.70 49.73 151.30 2262.77 8264.41 27.75
1976 63.14 \56b47 '159.49 2441.22300.04 34.S9
1977 62.13 54.45 144.79 2231.92'305.65 35.6S
1978 61.93 48.61ι 125.-:"1959.79-279.90,,32.37
1979 65-29 47.64 119.57 19ia39 277.22 30.82
1980 69.16 49.67 125.65 '2021.55 292.08 29.91
1.1.1931 75.70 .57.80,, 147.74 2379.783¿2.24 31.500
1

2U-
:il
COMMUNITY COAL1930
6(10tonnes)
Production •Deliveries tocokingplants Intra-Communi tytrade C1)
(a) (b). <% (c)
total ofwhichcoking
.•. coalandblast­
.■... ' • furnace coke(c)
• ' - , *
6 4 62 1 0.2
95 43 ..46 20 14
18 5 25 1
12? 10 8 4
247 62 25 26 14
expressed intonnesofcoal,
ageincluded in(b).

TACLEIII
'<AmL1'r-'tionofDecisionNo73/287
Distribution ofintra-Community deliveries
•Annualaverage1975-1977
(10^tonnes)
'
Tonmqos delivered Tonnoηseligible foraid(1) ';
Supplies toTotal
(a)I
C1)
l·of
whichcoke(2)
(b)TotaI
(cadbase
+e)
%,ofwhichforinland
works
(d)
XforcoastaI
works
(e)
y.
LieU,ique 2.2I
J'0.2
- 1 .■·2.0 (100)1.7 C84)0-3 (16)
frcr.ce 6.7
I2.2 6.3 (100)5.4 (85)0.9 (1·ν.
Itdli'-J 2.6/
0 2-0 (100)M» C0)2-0 (100)
l.uxcrr.kourg 2.7 2.2 2.7 (100)2.7 (100)-(co
.'L'ccrIjnd 1.0 0.2 0.9 (100) (0)0.9/(1CIC)
15.2 4.8
•14.0 (100)9.3 (70)4.2 (3->
C1)Including cokeexpressed intermsofcoal.
(2)t=t.

-tl
COMMUNITY COKE19S0TAlilIIV
(10tonnes)
OU.itryProduction
(a)Quantities received
byblastfurnaces •
(b)(VIntra-Commumtytrade
Total ofwhichofwinchb.~f.coKe
(deliveries )
r
!
L
L'K
FMP6.
29
11
8
2
10
665
17
10
6
2
2
4(2)
460.3
6.0
0.4
0.5
0-3
7.St>.4
0.4
5.8(?)
Includingintra-Commumtytrade,
-ereducedduetostrike.
>"or.nugr.'Sincludedin(c2)ofTableII.

TAP!1V
BLAST-FURNACE COKE
Consumption (a)
"Quantities receivedinintra-Community trade(b)
Percentage (b:a)
(10tonnes)
Country 1975I
11977-
1980/
-'
ab
a!
'a.;b
aab
a
95.00.3 64.60.1 2 5.3-1.019
D15.0-0 14 -017-4-0
F9.52.223 9-12-730 10.02.424
IT5-4 0 5-4 -0 5.5 -0
L2.02.1105 1.81.689,1.9 1.91C0
NLv1.90.211 1.8 0 1.90.421
SB
\7A 0 7-3 -0 3.7(1)-0
EUR46.24.810 444.4io45.75.813
(1)Reduction duetostrike.

-24-
TAUl.f.VI
THECOKERATEINBLASTFURNACES
(kgpertonneofpigiron)
ountry
Β
fX
UK'W4
563
517
552
499
|538
470
596
5371977
526
.477
504
477
:497
!450
'603
5051930
545
515
520
455
545
430
580
5141961
(estimate )
545
520
530
460
550
430
575
518

--
IMPORTSOFCOKINGCOALINTO
THECOMMUNITYTAQLCVII
(10"tonnes)
orm;rrj
U.S.A.
/.jc;ralia
PoLand
USSR
OtherTonnage:»received
1974 1977 1980
8.5 .8-2 •13■
2.3;3Jb 3.1
5.2 U 2.7
».
1.4 1.1 0.7
-•10.3 0-5Tonn.'igpscontr.ict•*_
1980 1981(1)
15-7 .'10-4
5.2 4.8 ,
5-3 5.1
0.9 0-9
Ϊ0Τ/!. 17.4
(1)Provisional .,17.4 20 27.1 21-2
DELIVERIES FROMEASTERN BLOCCOUNTRIES
inthefirstquartersof1980and1981
PoLand
USSR1/80
1.1
0.21/81
0,5
0,06
> •
/

*'•IDI•'J.RESPECT OF_INTRA­-C0W.UNIÎY TRADE™COKINGÇ0-ALWANDCOKE
YSrâF- IM5 mt' W7. 1978 1979 19SO'
Tc^-3~eseligibleforaid<mt) '-
D 14.7-12.9 10.6111,3 13,Ζ 1-.V. ,
Β - -
.,-" - 0.1.
F ---
«!0,2' Cr2 0.0?
Total 14.7 12.9-.
'10.6j11,5.
,'13,4 13.-1
Contributions totheCommunity fund(MEUA)■»
StateSteelTotaljstateSteelTotalStateSteelTotal]StateSteelToiaIjStateSteelTotalStateSteelTotal
D 2.36.23.52,0,5.7.'7.71.75,1.6.31.95.57.42,2 ,6.45.65.67,C12,6
θ 0.9 3.00.82.02.80.7v1.6-2.30.8.1.92.70.92.13.02,32,2",5
F 2.04.06.01.83.75.51.c·3,04.51.72.84.52.03*65.65.0.¿..o'9.3It 0.92.33.20.92.02.90.71.42.10,71.92.6 '0.82*02,82.22,2-4.4-
L. 0,7.0.81.5 •0.70.71.4C.60.61.20.60.61.2'0,70.81,51.10,81·9
NL 0.40.81.20.40.71.10.30*60.90,40.71/10.4-0.81«21·13,Sr.9
EUR-6 7.216.223.4 6*-614.821,45,5.12«t317.86.113.419.57,015.722.7(17.317.034,3
ECSC - 5.9- -5.4- -4.4 - -5.0'5,7--6,0
Total 29.3 26*8 22.2 24.5'
28*4 40.3
UK 3.0" 3.2
.2p4•.23.2.8•'1'Ό
AmountsrepaidviatheCommunityfuns(MEUA)
r-c
Β-293 268 222 242 28.1 39,8
F '- - - 03 0»3ϋ·h
0.'
Total /293 268 222 245 28.4 *
•¿C.3
Nationalproduction aidinrespectof(Ä)tonnages
(EUA/t)MEUA(EUA/t)MEUA (EUA/t)MEUA(EUA-¡χ')MEUA
D - - 5.1 54.116.1 182.119.3 255,C29.2376,3
Β 1 - - - - -45,5 6,1
F – ■ - - 33.3-6.743.6 8.7 C>4
Total -541 1888 2637 3828
Repayment (c)inrelationtototalaid(C)+(D)(%)
D
Β100.100 1.:' -29
;12 9,9'9.6
^L
F
ι- 6.0 4,8 3.77c
«o

RATEOFSALESAIDPERTONNE(COKINGCOAL)
YearNo (1) (2) (3)(4) (5)
Calendaryear 1973 1974 1975 1976 1977
(Décision No)
1973 UA 5 3 3 3*2.60*
(73/287) 1.60 1.60 1.60 1-60*1-^0*
1976 EUA
1977 EUA*
3.165 2.743*
(2963/76) 1.6831.477*
3-165
(751/77) 1.688
1977 EUA ' 3165
(1613/77) U6SS
1979 EUA
(3058/79)
1981 EUA
(draft)
*Ratescancelledandreplacedasaresultofnextdecision.(6) C7)(8)(9)(10)
1978 1979 1980 1981 19S2
2*
1*
2.110*
1.055*
2-110*
1.055*
3.165 3.165
1.688 1.688
J
4.40 4.40
2.602.60,'
N>
X
4.70,
2-50
'■ I5*Pirn