9. 8. 82 Official Journal of the European Communities No C 205/3 
Opinion on the Commission communication to the Council entitled: 'The role for coal in 
Community energy strategy' 
The text referred to the Committee has been published in Official Journal of the European 
Communities No C 105 of 26 April 1982, page 1. 
A. LEGAL BASIS FOR THE OPINION 
On 22 February 1982 the Council referred the abovementioned communication to the 
Economic and Social Committee in accordance with Article 198 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 198th 
plenary session held in Brussels on 26 and 27 May 1982. 
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 198 
thereof, 
Having regard to the request made by the Council of the 
European Communities on 22 February 1982 for an 
opinion on the Commission's communication to the 
Council entitled: 'The role for coal in Community energy 
strategy', 
Having regard to the decision taken by its Bureau on 23 
March 1982 instructing the Section for Energy and 
Nuclear Questions to draw up an opinion and a report on 
the subject, 
Having regard to the opinion adopted by the 
above-named Section at its 69th Meeting on 2 April 
1982, 
Having regard to the oral report made by the rapporteur, 
Mr Zunkler, 
Having regard to the discussions during its 198th plenary 
session held on 26 and 27 May 1982, 
HAS ADOPTED THE FOLLOWING OPINION 
with no dissenting votes, but with 1 abstention: 
1. EC coal policy 
1.1. When the European Coal and Steel Community 
was founded coal mining was one of the key industries 
and a basic pre-requisite for economic growth. Five years 
later the oil boom plunged the coal industry into crisis. 
Coal has since passed through a painful process of 
adjustment, although since the establishment of the 
common market in coal, and the concurrent liberalization of international trade in pursuance of Articles 60, 65 and 
66, a large number of measures were, however, taken by 
the High Authority, to ensure effective competition by 
stabilizing production and the employment situation and 
by the provision of national aids for the coal industry. 
The aids covered rationalization measures as well as 
social measures. 
1.2. In general, the objectives pursued with these 
measures were achieved: production was adjusted to 
market conditions and concentrated in the most 
profitable collieries; regional and social problems were 
largely avoided in the coal-mining areas; changes in the 
conditions of competition for individual coal producers in 
the Community were minimal. 
1.3. The 1973/74 oil crisis led to a change in coal 
policy. The problem of the security of energy supplies 
came to the fore, while the rise in energy prices improved 
the competitive position of the coal industry. 
Between 1973 and 1977 national measures were taken 
with the aim of giving greater importance to available 
supplies and cancelling plans to reduce production. 
Within the framework of the Community, too, the 
realization gained ground - as a lesson drawn from these 
vicissitudes - that more had to be done to ensure the 
security of energy supplies, namely through more rational 
energy use and greater diversification of supplies, with an 
important role being assigned to coal. 
In 1980 forecasts were prepared of requirements in the 
1980s ('Coal 2000'). Considerable demands will be made 
on coal in the future, particularly if the Community 
wishes to make itself more independent of oil. In 1981 a 
proposal was accordingly submitted concerning the 
possibilities of converting industry from oil to coal. This 
has been discussed by the European Parliament and by the 
Consultative Committee. The Council has not yet taken a 
decision. 
No C 205/4 Official Journal of the European Communities 9. 8. 82 
2. The position of coal in the package of measures 
currently proposed 
2.1. Over the past few weeks and months the 
Commission has taken a series of additional, welcome 
initiatives and put forward a number of proposals with a 
view to adapting the Community's energy policy to meet 
current requirements and gearing it to the future. The 
Commission's communication to the Council on the 
'development of an energy strategy for the Community' 
forms a basic document here. 
2.2. In the abovementioned communication the 
Commission notes that, in spite of the expressions of 
political will and the taking of measures by the Member 
States, there is still no comprehensive overall strategy and 
that Community action must be taken as a matter of 
priority in the following fields: 
— investment, 
— pricing and taxation, 
— measures to avoid instability on the markets, 
— R&D, 
— relations with non-EEC countries. 
The Commission has submitted or announced individual 
proposals dealing with these priority areas. The 
Committee will be issuing separate opinions on these 
proposals. 
2.3. The role of coal in the Community is, however, 
rightly deemed to be so important that the Commission 
has submitted a separate communication to the Council 
on the matter. In this communication the Council has 
more closely defined the abovementioned priority fields 
with particular reference to coal. The communication, 
which is entitled: 'The role for coal in Community energy 
strategy', also incorporates two draft Council 
recommendations, which represent the first concrete 
measures setting the tone for action in this field. 
3. Gist of the communication 
3.1. The Commission starts off by considering the 
probable trend in the demand for coal in the Community. 
It concludes that though overall annual demand will not 
rise as steeply as was earlier expected it will still increase 
by just under 60 % to a maximum of 500 million tonnes 
between 1980 and the year 2000. The most important 
element in the increase will be the rise in the demand from 
power stations for steam coal. 
3.2. The Commission considers that, in the interests 
of reducing the Community's dependence on oil and 
promoting a further increase in the use of coal, the transparency of the prices of Community-produced and 
imported coal must be improved. There is also a need for 
additional investment incentives to promote the use of 
coal, measures to perfect coal-utilization technologies 
and satisfactory solutions to the environmental problems 
arising as a result of the increased use of coal. 
3.3. The Commission notes that only a small 
proportion of coal production in the Community is 
profitable and competitive with imported coal, the major 
proportion being either unprofitable or of a border-line 
competitiveness with imported coal. In some cases 
production costs are about 100% above the delivered 
costs of imported coal. In order to improve the 
competitive position of Community-produced coal a 
number of measures are proposed, including more 
widespread application of modern technology, an 
increase in the utilization rate of mining equipment and 
further rationalization of the structure of the industry. 
3.4. As increased levels of coal imports to cover the 
Community's long-term requirements will in any case be 
necessary, the Commission concludes its communication 
by considering in greater detail how the problems arising 
as a result of the need for imports can best be solved. The 
Commission holds the view that competition should 
generally ensure reliable supplies of coal for the 
Community, given the fact that supplies come from 
different countries. The Commission therefore calls for 
the continued freedom of international trade in coal. In 
order to obtain a wider distribution of sources of supply, 
investments in the ACP countries in particular should be 
encouraged. Finally, in order to improve the flow of 
information on market developments, there should be 
regular consultations in the Community. A survey should 
also be carried out to establish the optimum level of stocks 
to be held by the Community and appropriate measures 
should be taken to cover the admittedly unlikely 
eventuality of a supply crisis. 
3.5. In the draft Council recommendations appended 
to the communication the Commission proposes that the 
Member States take measures to promote the conversion 
of existing oil-fired equipment to coal and that the States 
themselves take such conversion measures in public 
buildings and district heating systems. 
4. General comments 
4.1. The Committee is pleased to note that the 
observations and views of the Commission to a large 
extent coincide with its own views on the necessary 
further development of coal policy in the Community. 
The Commission's proposals follow on from its earlier 
policy of promoting the coal industry, with special 
attention being given to the world-wide changes that have 
taken place in the energy market over the past few years. 
In the present situation in particular, characterized as it is 
by falling energy prices and an apparent energy surplus in 
the world, long-term trends must be taken consistently 
9. 8. 82 Official Journal of the European Communities No C 205/5 
into account and, if necessary, political action must be 
taken. 
4.2. The Commission deserves praise in this respect 
for putting forward concrete proposals in the 
communication: (a) to strengthen, even against the 
present background of falling oil prices, the position of 
our home-produced primary energy source, coal, which 
offers long-term security of supply and (b) to promote the 
use and guarantee the supplies of imported coal as an 
additional means of reducing our dependence on oil. It 
would, however, have been desirable to have made it 
clear that coal imports from third countries must not 
supplant Community coal production (necessary for 
security of supply) particularly in periods of recession. 
4.3. Finally, the Commission should have reiterated 
as a summing-up that EC coal policy must continue to 
embrace all three major sectors, namely: 
— electricity generation, which is still too strongly based 
on oil and gas in some Member States, 
— industrial and domestic heating, including the 
desirable expansion of district heating on the basis of 
combined heat and power generation, 
— the supply of coking coal and coke to the iron and steel 
industry; the EC arrangements for coking coal 
constitute a valuable instrument and it is to be hoped 
that nothing will now stand in the way of an extension 
of these arrangements. 
4.4. The document concerned gives no idea of the 
potential impact on employment. Yet this consideration 
could influence policies regarding the breakdown 
between aid to: (a) coal production and (b) the structural 
and industrial conversion necessary for the use of coal. 
5. Specific comments 
5.1. Price transparency 
The Committee agrees with the Commission on the 
desirability of a fundamental improvement in price 
transparency, especially with a view to providing a firmer 
basis for particular coal-policy measures to be taken in the 
future, such as measures to coordinate supplies of 
Community-produced and imported coal, but also with a 
view to giving the private consumer a better picture of the 
price situation in the domestic fuels sector. The 
Commission's desire to include additional consumer 
information in the publication of list prices for 
Community coal may therefore be a step in the right 
direction. On the other hand, it should also be noted that 
in no other energy sector is there such a large number of 
notification obligations as in the coal industry. Although it would certainly be desirable to have similar 
information on imported coal as well, this objective must 
be viewed with a certain scepticism. In addition to the 
quarterly returns to the Commission, some Member 
States publish monthly figures giving the value at the 
frontier of imported coal subject to duty. These figures 
are, however, only average values and constitute merely a 
rough guide, as the prices under individual contracts vary 
considerably depending on the quality, country of origin 
and the state of the market. Improvements in the 
publication of average prices are therefore desirable but 
they cannot form a substitute for the detailed market 
research the individual consumer requires in order to 
determine the most favourable source of supply of coal of 
the appropriate quality. 
To this extent improvements in market transparency 
through the official publication of prices can generally 
never be a means of directing demand towards the most 
favourable sources of supply, a function to which market 
transparency owes its importance in economic theory. If 
account is taken of this limitation and if no attempt is 
made to get round this deficiency by instituting what 
would, in the final analysis, be ineffective bureaucratic 
registration procedures, but instead improvements in 
price transparency are regarded merely as a means of 
observing long-term trends and as a basis for 
energy-policy measures, then the Committee can agree 
with the Commission's viewpoint. 
5.2. The stimulation of investment 
The proposal made in the communication that the 
Member States take measures to promote investment in 
the conversion of oil-fired equipment to coal is of topical 
importance. The Committee shares the Commission's 
view that such measures are particularly necessary in 
those Member States which have an especially high degree 
of dependence on oil because they have no coal 
production of their own. It is a fact that many parties are 
reluctant to risk investing in such conversion at the 
present time since the price differential between oil and 
coal has further decreased and there is uncertainty about 
future price and exchange-rate trends. Their reluctance is 
further increased by the current doubtful general 
economic prospects in a number of fields. 
The Committee welcomes and supports the 
Commission's views on this matter and, in particular, the 
two draft Council recommendations on measures to 
promote investment in coal-fired equipment in 'general 
industry' and in public buildings and in district heating 
systems. The Committee considers that natural gas-fired 
installations should also be covered by the draft 
recommendations. In the Committee's view it is 
particularly necessary, at the present time, that such 
measures should give the industries concerned confidence 
in the continuity of energy policy and the emerging 
greater use of solid fuels. 
No C 205/6 Official Journal of the European Communities 9. 8. 82 
The Commission should, however, pay attention to the 
need for the gradual elimination, as national aid policy is 
developed, of the overlapping between production 
subsidies and consumption subsidies. The coexistence of 
subsidies in both fields leads to undesirable distortions 
and falsifications of competition in the Community. In 
the Committee's view, therefore, continuous assistance 
should be confined to the production sector; measures in 
the area of consumption should be supported only in so 
far as the desired replacement of oil cannot be achieved 
without aid. For the rest, in the granting of such support 
preference should be given to consumers who make a pro 
rata commitment to use Community coal. 
5.3. Refining the technology of coal use 
Improvements in coal application techniques are in the 
interests of the long-term consolidation of the position of 
coal on the energy market. The Committee therefore 
welcomes the Commission's proposals in this field. 
The prospects for the economically viable conversion of 
solid fuels into liquid and gaseous products remain very 
uncertain, however. There is undoubtedly a need for 
further research on basic principles and processes in order 
to keep up with developments in this field in other 
countries. Priorities must be fixed here on account of the 
limited funds available and the fact that the technologies' 
prospects of economic viability vary. The Committee 
expects the Commission to indicate more clearly whether 
preference should be given to one of the technologies -
liquefaction or gasification - and, if so, which. 
There are, on the other hand, more obvious research 
projects which can be successfully carried out in the short 
term and which should be promoted as a matter of 
priority. Examples of such research projects are, in 
particular, improvements in boiler installations and their 
control systems and the production of modern, less 
polluting forms of coal, such as pulverized coal. 
5.4. The treatment of environmental problems 
The Committee notes with interest the Commission's 
view that 'there is no reason on environmental grounds to 
qualify the commitment of the Community to greater coal 
use'. The Committee does, however, recognize the 
difficulties involved in the increased use of coal in the 
Community from the point of view of possible harmful 
effects on the environment. It acknowledges the need, as 
foreseen by the Commission, for the Member States to 
observe and apply uniformly the Community's 
recommendations on permissible emissions of pollutants. The Commission has an important monitoring role here, 
which should also involve promoting research and 
investigations in this sphere, for example as regards the 
optimum sites for coal-fired or coal-processing 
installations in view of their S02 emissions. 
The Committee therefore also supports the Commission's 
proposal for support for R&D on combustion 
techniques which cause only minor pollution. 
5.5. The Community coal industry 
The Committee can only endorse the Commission's view 
that Community coal production is the best insurance 
against adverse price developments on the world market 
and the most effective weapon for dealing with OPEC's 
price whims. The opening-up of new productive mines 
and the promotion of measures to further boost 
productivity in the Community coal industry constitute 
significant progress in this direction. The Commission 
would be well-advised to continue to mobilize available 
Community aid and urge Member States to adopt 
additional Community support measures as part and 
parcel of the long-term energy strategy. Since energy 
supplies have to meet conflicting requirements - on the 
one hand, reasonable prices, on the other, the greatest 
possible security of supply - it is necessary in the 
Committee's view to agree a coal production capacity to 
be maintained in the Community for strategic reasons in 
the interests of the Community's security of supply. As 
Community coal production will generally be more 
expensive than coal imports, such a capacity can be fixed 
as a matter of priority only on the basis of political and 
strategic considerations, although the economic aspect 
(what does security of supply cost and who pays for it?) 
must not of course be left out of account. Such a guide 
capacity will be very important from the point of view of 
security of supply for all the Member States as the 
Community's coal requirements rise considerably in the 
coming years, entailing a steep increase in coal imports 
from third countries, in addition to domestic coal 
production. The Committee considers such an initiative 
essential in order to avoid a by no means impossible new 
dependence on imports, quite apart from the impact that 
this initiative can make on employment and in the 
socio-political sphere. 
In this connection it should — as the Commission has 
proposed - be checked whether Article 59 of the ECSC 
Treaty can continue in force unchanged or whether the 
altered circumstances call for a revision. In reappraising 
this Article particular care should be taken to ensure that 
only those users who took delivery of Community coal 
under long-term contracts even during periods when this 
was to their financial disadvantage (and thereby 
maintained Community coal production) have a prior 
claim when there is coal shortage and thus enjoy 
9. 8. 82 Official Journal of the European Communities No C 205/7 
precedence over other users who opted not to conclude 
long-term contracts and were not prepared to bear part of 
the cost of maintaining Community coal production. 
5.6. Coal imports 
The Committee agrees with the Commission that coal 
imports are needed in addition to domestic production in 
order to reduce the dependence on oil; the Committee 
considers, however, that the Community must state 
clearly that coal imports are permissible only to the extent 
that the Community's coal requirements exceed the 
domestic production capacity needed for strategic 
reasons; in other words, imports must not supplant 
domestic production. 
The Committee fully agrees with the Commission that 
free international trade in coal is the best means of 
ensuring optimum supplies of imported coal for the 
Community. The fact that the loss of supplies from 
Poland has been compensated for without any problems 
has once again demonstrated the validity of this thesis. 
However, the Committee thoroughly approves of the 
Commission's exhortation to Community companies 
involved in coal supply with a view to stepping up 
information on market trends and on the policy to be 
followed for the submission of suggestions to the 
Commission for action, if appropriate, at Community 
level. 
The Committee would endorse the Commission's 
statement that the handling and transport of the rising 
coal imports will entail additional investment in 
infrastructure, particularly in the Member States with no 
coal production of their own, since port facilities and 
transport systems will have to be expanded. 
Done at Brussels, 26 May 1982. An exchange of views within the Community would be 
useful on the question of which countries should provide 
the Community with its coal imports. Particularly 
appropriate sources of imports would be the ACP 
countries, in which available Community resources 
should if necessary be concentrated. The promotion of 
primary energy production in the ACP countries would 
appear to be one of the most sensible forms of 
development aid, since it would provide these countries 
with the energy base required for both industrial 
development and long-term economic relations with the 
industrialized countries. 
The Committee has serious doubts whether the proposed 
regular exchanges of information on short-term market 
trends between Community companies involved in the 
coal-import trade can achieve the desired results. 
Experience has shown that the trade associations set up 
for such purposes are unable either to plan or adopt 
'specific action to meet the problems that are identified, 
taking full account of competition rules'. 
The Committee can only welcome the idea of a 
Community-scale survey of existing stock levels in view of 
the possibility of bottlenecks in supplies. Community 
measures should be designed to ensure that uniform rules 
on the maintenance of stocks are adopted in the Member 
States and that consumers hold stocks sufficient to cover a 
specific period of consumption. If the Commission were 
to envisage the establishment of a Community-financed 
'European coal reserve', which would have to consist of 
both domestic and imported coal, a discussion of this 
issue would be useful, provided it were made clear that, in 
the event of a crisis, any claims for a share of reserves 
could only relate to this strategic Community reserve. 
The Chairman 
of the 
Economic and Social Committee 
Tomas ROSEINGRAVE