No C 1.14/20 Official Journal of the European Communities 7. 5. 79 
Opinion on the communication from the Commission to the Council on the introduction of 
a Community aid system for intra-Community trade in power-station coal 
The text referred to the Committee has not yet been published in the Official journal of the 
European Communities. 
A. LEGAL BASIS FOR THE OPINION 
On 13 March 1978 the Council referred the abovementioned proposal to the Economic and 
Social Committee in accordance with Article 235 of the Treaty establishing the European 
Economic Community. 
B. OPINION OF THE ECONOMIC AND SOCIAL COMMITTEE 
The Economic and Social Committee prepared its opinion on the above matter at its 161st 
plenary session held in Brussels on 12 and 13 July 1978. 
The full text of the opinion is as follows: 
THE ECONOMIC AND SOCIAL COMMITTEE, 
Having regard to the Treaty establishing the European 
Economic Community, and in particular Article 235 
thereof, 
Having regard to the request made by the Council of 
the European Communities on 13 March 1978 for an 
opinion, 
Having regard to the decision taken by its Bureau on 
29 March 1978 instructing the Section for Energy and 
Nuclear Questions to draw up an opinion and a report 
on the matter, 
Having regard to the opinion issued by the Section for 
Energy and Nuclear Questions at its 41st meeting held 
on 30 June 1978, 
Having regard to the oral report made by the 
rapporteur, Mr Picard, 
Having regard to the discussions at its 161st plenary 
session, held on 12 and 13 July 1978 (meeting of 
12 July), 
Whereas in order to help achieve the aims in respect of 
coal set out in the Community's energy policy objectives 
for 1985, the Commission submitted two proposals to 
the Council in 1977, namely the proposals with regard 
to Community aid for financing cyclical stocks of coal 
and coke (1) and aid towards the cost of building 
coal-fired power stations (2); Whereas the Committee issued opinions on these two 
proposals on 30 March and 22 June 1977 
respectively (3) (4); 
Whereas the abovementioned proposals have not yet 
been adopted by the Council; 
Whereas the Commission has kept these two proposals 
on the table but feels that there is also a need for a 
Community aid scheme aimed specifically at boosting 
coal sales, 
HAS ADOPTED THE FOLLOWING OPINION 
by 59 votes to six with three abstentions: 
1. General comments 
1.1. The Committee is pleased to note that the 
Commission is still concerned to frame a Community 
energy policy. The Committee reiterates the importance 
which it attaches, for both economic and social reasons, 
to measures designed to enable coal production targets 
to be achieved and to promote sales of coal. An increase 
in intra-Community trade in power-station coal is a step 
in the right direction. The question which arises is 
whether the proposed method is the most appropriate 
one. 
(!) OJ No C 32, 29. 1. 1977, p. 4. " (3) OJ No C 144, 11. 5. 1977, p. 24. 
(2) OJ No C 282, 23. 11. 1977, p. 6. (4) OJ No C 180, 28. 7. 1977, p. 32. 
7:5.79 Official Journal of the European-Communities No C 114/21 
2. Specific comments 
2.1. (Item 1 in the communication) 
The Committee agrees that an appropriate coal 
production capacity must continue to be guaranteed in 
the interests of the Community's security of supply of 
energy products. The Commission has called for a 
production capacity of approximately 250 million tee. 
This quantity should be regarded rather as an order of 
magnitude than as a fixed figure. 
2.2. (Item 2) 
The Committee shares the Commission's view that, at 
least as things stand at present, protectionist measures, 
such as import duties and quotas, would be unwise and 
undoubtedly ineffective. Imports are certainly necessary. 
Import restrictions would endanger the supply of coal 
and customs duties would put up the price. It is, 
however, vital that the Community's production 
capacity be maintained at the proposed level. While the 
issue of financial aid must normally be approached with 
caution, the proposed grant arrangements would seem 
to be an appropriate way of achieving this aim. 
2.3. (Item 3) 
Aid to coking coal set a good precedent as it made it 
possible to maintain a nucleus of Community 
production whose existence would otherwise have 
certainly been seriously endangered. The Committee 
agrees that the growth sector in which new aid 
measures should now be considered is that of 
power-station coal. 
2.4. (Item 5) 
There are many national support measures, both 
specific and non-specific, to promote the sale of 
Community steam coal. The Committee considers that 
these issues should be tackled in a spirit of Community 
solidarity and regrets that it has not been possible 
before now to introduce a scheme for the Community 
as a whole. Alignment or indeed standardization of the 
various national support measures is desirable. 
Although the proposed measures are apparently not 
linked to existing measures, the communication does 
not make this point clear. It is also not clear whether 
the proposed measures are to be applied in addition to 
existing national measures. The Committee also notes 
that the amount of the proposed aid is in no way comparable with national aid already being granted to 
coal mines. The Committee thus wonders whether it 
will be possible to increase intra-Community trade in 
power-station coal to the proposed level. 
2.5. (Item 7) 
The Commission has estimated that intra-Community 
trade in coal could be increased to 12 million tonnes 
from its present level of between 3 and 3-5 million 
tonnes. These estimates were essential in order to assess 
the quantities which would qualify for the subsidy. The 
Committee agrees with the Commission that all 
12 million tonnes should qualify for Community aid. 
2.6. (Item 8) 
The Committee agrees that the different grades should 
be converted to standard grades, in order to avoid 
discrimination as a result of different calorific values. 
2.7. (Item 9) 
The proposed system must not lead to a situation 
whereby most of the additional sales are made by one 
single coal-producing country. The Committee would 
therefore very much like to know how the aid is to be 
apportioned. In the absence of any clarification of this 
admittedly delicate point by the Commission, the 
Committee is unable to take a stand. It does, however, 
expect to be consulted on this matter in due course. 
2.8. (Item 10) 
The Committee also shares the view that measures 
should be taken to prevent Community subsidized 
power station coal from being sold on domestic markets 
in competition with other coal. Preventive measures will 
require special consideration. 
2.9. (Item 11) 
The question arises as to whether the aid should be paid 
to the producers or to the consumers. The Committee 
agrees that it would be simpler to pay the grants to 
producers. Nevertheless, some Member States may have 
already proposed alternative arrangements. The 
Committee therefore urges that all doubt as to the total 
No C 114/22 Official Journal of the European Communities 7. 5. 79 
aid granted should be dispelled, irrespective of to whom 
it is paid. 
2.10. (Item 12) 
The Committee agrees that deliveries to both public and 
private power stations should qualify for the same aid. 
2.11. (Item 13 and Item 14) 
2.11.1. The Committee recognizes the desirability of 
helping Community coal producers to align their prices 
on market prices, but two much more delicate questions 
arise here: 
(1) What prices are to be used for reference purposes? 
(2) How effective is an aid scheme which cannot cover 
the entire price differential? 
2.11.2. Two points arise with regard to the above. 
Firstly, unrealistic prices relating to insignificant 
quantities should not be used as a reference. Secondly, 
even if the consumer is prepared to contribute towards 
the cost of ensuring his security of supply — and this 
would be desirable — he must not, however, be obliged 
to accept terms which are not largely comparable with 
those offered to non-EEC consumers. 
2.11.3. As regards the second question, Community 
producers may in certain cases regard as inadequate, 
subsidies which cover only 30 % of the losses which 
they incur by taking over markets from 
non-Community suppliers. Could not this percentage be 
increased, subject to the subsidy being applied to a 
Done at Brussels, 12 July 1978. smaller quantity of coal? Be that as it may, it is agreed 
that the subsidy must be limited to 120 million EUA if 
the scheme is to have a chance of success, which it 
certainly would not have if the subsidy were higher. 
2.12. (Item IS) 
The inevitable question of 'who pays?' also arises here. 
It is out of the question that the power stations should 
pay as they would inevitably have to pass on the extra 
cost. This would severely strain the Community 
economy. It would also be unreasonable to expect only 
the coal producing Member States to pay as the scheme 
will, in the final analysis, benefit the Community as a 
whole, if only because of the security which it will 
afford. Under these circumstances it is up to the 
Community itself to provide the aid which should 
therefore be financed from the general budget. 
3. Conclusions 
3.1. The Committee appreciates the Commission's 
efforts to propose measures which pave the way for a 
common energy policy. The Committee regrets, 
however, that the proposed measures are piecemeal and 
limited to a single field. An overall policy still has to be 
sought and implemented. 
3.2. The Committee considers that the proposed 
measures will have to be applied for a limited period, of 
say three years, so that their effectiveness can be judged 
in the light of experience and in order to provide the 
necessary information to decide whether or not the 
measures should be continued. 
The Chairman 
of the Economic and Social Committee 
Basil de FERRANTI