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COMMISSION OF THE EUROPEAN COMMUNITIES
C0MC83) 54 final
Brussels, 9th February 1983
WORKING PROGRAMME ON SOLID FUELS
(Communi àSìàpn f,rom the Commission to the Council)
COM(83) 54 final

TABLE OF CONTENTS
Page
Prefaoe 1
I. Wider use of solid fuels 1
II. Intra-Community trade in solid fuels 3
III. Modernization and rationalization (restructuring)
of the production of coal and other solid fuels 12
IV. The problem of stocks 16
V. Increasing the importation of coal 19
VI,.  Helping to solve the environmental problems
connected with the production and use of solid fuels 20
VII. '  Research, development and demonstration 25
Annex :  Summary table

- i -
Preface
In October 1931, the Commission presented to the Council guidelines and  
priorities for Community energy strategy aimed at reducing the Community’s  
dependence on imported oil through diversification of energy supplies and  
rationalisation of energy use” *. This approach was generally welcomed by  
the Council and by the European Parliament.
The Commission's Communication on energy strategy emphasised the particularly  
important role for coal and other solid fuels in the transition away from oil;  
and at its 787th meeting on 13 July 1982, the Council acknowledged that major 
progress in diversifying the Community's sources of energy supply could be  
made between now and the year 2000 only by increased use of coal and other  
solid fuels, as well as nuclear energy.
Meanwhile, there have been important developments on the world oil markets.  
Over the past 18 months there has been a decline of some 10% in the nominal  
dollar price of crude oil imports to the Community and an even steeper decline  
real terms. So far the effects have been to a large extent offset by the  
appreciation of the dollar against a number of Community currencies; but  
there is great uncertainty about future market developments and about their  
effects on consumer prices for oil products and on the competitivity of  
other energy sources.
C0M(81)540 final :  The Development of an Energy Strategy for the Community

The Commission is currently analysing the implications for Community energy  
strategy of recent trends and prospects and, before the next meeting of the  
Council (Energy), it will submit a Communication setting out its findings.  
Hitherto, Community energy strategy has been assisted by high and rising oil  
prices which have provided a significant stimulus to fuel switching, energy  
conservation and investment in new energy supplies and technologies. But this  
market stimulus is now weakening. A central issue for the Commission’s Commu­
nication will be whether and to what extent in these circumstances there should  
be some reinforcement of action by public authorities so as to sustain progress  
towards the Community’s long term energy objectives.
This is the context in which the Commission has drawn up the following
programme of work for the solid fuels sector. It is the logical continuation
of an approach to solid fuels towards which the Community has been working for
the past 12 months on the basis of separate Commission Communications on  
1 2coal and lignite and peat .  It follows three meetings of the Council which 
have debated solid fuels policy and an informal meeting of Ministers in  
Copenhagen on 16 December 1982, entirely devoted to this subject, at which  
Ministers made clear that they considered it in their common interest to seek  
progress towards a balanced and comprehensive policy for solid fuels.
Although this Communication indicates what Community actions are necessary on  
each of the main issues arising in the solid fuels sector., it does not quantify  
their cost. This is because the Commission is analysing in greater depth the  
implications of certain of the proposals outlined. But it is already clear  
that, if the Council agrees to move forward on the lines suggested, there would  
have to be a substantial increase in the budgetary credits available for  
Community action in this sector.-
-j
O.J. C105 of 26.4.1982- The r81e for coal in Community energy strategy
p
COM(82)649 final of 18.10.1 982 - Report on the Brown Coal and Peat Industries
in the Community

Wider use of solid fuels
The Commission underlines first of all that solid fuels strategy requires  
both a firm commitment and active policies by Member States to ensure  
that a substantial market for these products is developed and maintained.
The arguments for increasing the share of solid fuels in primary energy  
consumption are set out in the Commission's Communication of 10 February 1982.(]_)4
The industrial sector is the main area where consumption could be increased  
in the medium and long term. It deserves therefore particular attention. The  
Commission has already presented to the Council two sets of proposals in  
this area0
a) Two Recommendations to the Member States concerning measures to be  
taken to encourage investment in the conversion or reconversion to solid  
fuels of oil-fired plant in industry,  public buildings and in district­
heating systems.  Favourable opinions on these Draft Recommendations have
been given by the ECSC Consultative Committee (2), the European Parliament (3)  
and the Economic and Social Committee ( 4)·
b) A Regulation on the payment of financial incentives in support of categories  
of investment in the rational use of energy ( 5)0
(1) The rOle for coal in Community energy strategy, OJ C105, 26 April 1982
(2) OJ C147, 11 June 1982
(3) OJ 0149» 14 June 1982
(4) OJ C205, 9 August 1982
(5) OJ 0285» 30 October 1982. The European Parliament has entered a credit  
of 1 MECU under this heading in the 1983 budget.

-  2 -
Of these categories,, the following are directed towards the wider  
use of solid fuels :
- generation of heat for remote-heating systems from solid fuels;
- conversion of industrial oil-fired plant to solid-fuel firing;
- preparation of solid fuels for users other than power stations  
and coking plants.
The Egpnamio and Sooial Committee (l)  gave a favourable opinion  
on this Draft Regulation and the European Parliament is preparing  
its opinion.
In the meantime the Council's subordinate bodies appear to have made  
sufficient progress in their talks on these two series of proposals  
for the Council to adopt both at one of its forthcoming meetings.
Finally/ the Commission recently introduced/ as provided for by the  
ECSC Treaty/ a system of interest rebates on industrial loans to help  
finance installations and equipment for the combustion/ transformation/  
handling and preparation of coal and for the treatment and disposal of  
effluents/ provided their purpose is to promote the consumption of Com­
munity coal (2).
Conclusions
Adoption by the Council of:
a) the two Recommendations concerning measures to encourage invest­
ment in the conversion to solid fuels of installations in in­
dustry, in public buildings and in district heating systems}
b) the Proposal for an EEC Regulation on the payment of financial
certainincentives in support of/categories of investment in the rational  
use of energy.
(1) Doc. CES 925/82/ 15 December 1982
(2) OJ C343/ 31 December 1982

- 3 -
II. Intra-Community trade in solid fuels
1.  General
Intra-Community trade in solid fuels is based almost exclusively on hard
coal and coke. Lignite and peat are of minor importance, as the Commission’s
1report on them showed .
All coal-consuming sectors share in this trade in hard coal and coke,  
with coking plants and steelworks consuming the lion’s share and power  
stations, other industries and domestic users sharing the remainder.
Germany is the* leading supplier, followed by Great Britain.
The trade has been on the decline for a number of years, despite a slight  
upswing in 1981. The figures for the last four years are set out below.
1980
Coking coal 7.0
Power station coal 5*5
Anthracite and other 4*7
Total coal 17*2
Coke 1.6
Grand total 24.8
The main reason for the 1981 increase in intra-Community trade in  
hard coal was that British coal producers, spurred by the shortfall in  
supplies from Poland, supplied an extra 3.6 million tonnes.
The total intrar-Community trade in hard coal and coke (expressed as  
coal equivalent) forecast for 1983 is equivalent to roughly 10$ of the  
Community’s indigenous production and 33$ of ■ f t i e  Community’s coal  
imports.(Million tonnes)
1981 1932 1983 (Forecasts)
7.9 5-8 5.9
6.8 6.9 6.8
5.2 3.9 3.1
19.9 16.6 15.8
6.9 5.6 5-9
26.8  22.2  21.7
Doc. C0M( 82)649 final of 18 October 1982

- 4 -
Very often this trade follows traditional trading patterns. Conse­
quently, the decline is often the direct result of the reduced re­
quirements - or even the complete disappearance - of specific custo­
mers. This is particularly true of the coking coal or coke deliveries  
traditionally made by German producers to steelworks in other countries,  
or, again, of the coal for briquettes for home heating^
Another factor which has helped curb the volume of intra-Community  
trade is the substantial price rebate granted on sales of Community  
coal in other countries, where customers frequently insist on prices  
aligned on those for coal imported from non-member countries.
Following the slight respite in 1981 - where the price of coal from  
non-member countries rose sharply under the impact of exceptionally  
high demurrage and loading charges - the gap between production costs  
for Community coal and the cif prices for imported coal(1) has been  
widening, despite the strong appreciation of the US dollar in 1982.
Whenever Community coal is shipped to European ports, where a substan­
tial proportion of, for example, the Community's steelmaking activities  
are based, the price alignment must also offset the transport costs  
incurred,which, as the few typical examples in the Table show, range  
from 5 to 19 ECU per tonne depending on the link in question, the ca­
pacity of the vessel and the form of the contract.
(1) Note that the differences between the cif prices  
for coal from non-member countries from one Com­
munity port to another are relatively insignificant.

- 5 -
Transport cost for coal
Link ECU per tonne(1)
Ruhr Dunki rk 
Ghent 
Rotterdam 
Genoa11
9
5
1 2
Yorkshire/
MidLandsLe Havre
Antwerp
Rotterdam
Hamburg
Copenhagen16 - 19
South Wales Genoa 19
For a number of reasons (distance, tariff regulations, method of  
transport) the cost of forwarding the non-Community coal from the  
ports where it is imported to the steelworks inland is often lower  
than the carriage costs for Community coal. In the final analysis,  
the transport differential militates against Community coal except  
where the consuming industry is located close to the coalfields (2).
As a result, coal producers are generally unwilling to sell at  
aligned prices - particularly in other Community countries - unless
a) they wish to maintain their production capacity - or perhaps  
even their sales outlets - and feel that it is cheaper to dis­
pose of some of their products in this way than to store the  
surplus for lengthy periods and/or take temporary measures to  
cut back production;
(1) Including .  costs for the haul from the mine to the port.
(2) Some examples of transport costs Ruhr-Lorraine
Ruhr-Liège
Saar-Lorraine
Aachen-Luxembourg
(coke)14 ECU per tonne  
6 ECU per tonne  
4 ECU per tonne  
13 ECU per tonne

-  6 -
b) if financial aid from the national or Community authorities helps  
them to recoup a large proportion of the alignment rebates granted  
to customers in other countries.
On the other side buyers are not prepared to pay a higher price than 
that charged for coal from competing sources unless they feel that  
this would improve their security of supply at an extra expense which  
is not excessive.
In conclusion/ maintenance and promotion of intra-Community trade  
calls for a combined effort by :
- the producers who charge prices lower than their production costs  
plus transport costs;
- the buyers who must weigh up the relative costs and benefits of  
greater security of supply and of easy links with the suppliers  
close at hand;
/
- in some cases, the public authorities who can also intervene/ prin­
cipally for strategic/ regional or social reasons.
2. Coking coal and coke for the steel industry
The situation described above applies particularly to these products  
which account for the major share of intra-Community trade.
According to figures available at the end of 1982/ the difference  
between the Ruhr list prices and the guide price for imported coking  
coal (82 ECU) is DM 68 (28 ECU) per tonne of the same quality.
The transport differential in favour of Community coal and the align­
ment margin at certain typical points of consumption are of the follow­
ing order of magnitude (in ECU per tonne) :

- 7 -
Differential Alignment margin
Genoa 12 12 + 28 40
Rotterdam 3 3 + 28 31
Thionvilie 3 3 + 28 31
Liège 2 2 + 28 30
Under the present arrangements/ a proportion of this alignment  
margin is covered by national aid and another by Community aid  
which serves as support for intra-Community trade.
The Community arrangements for coking coal(1) have so far made it  
possible to maintain sufficient production capacities in the Com­
munity to ensure that the mines can work in acceptable conditions  
and to secure supplies for the steel industry on reasonable and  
non-discriminatory terms. It has also made a rational use of the  
existing coking plants possible.
This is of importance to both the coal mining industry and steel  
industry. The General Objectives for Steel 1985 and the restruct­
uring measures which are expected to follow necessitate a revision  
of these arrangements. This must be undertaken by the end of the  
year and - as the Commission has already indicated - become part of  
the Community's energy strategy.
The following features of the present arrangements should be maintained  
while respeoting the rul-es on competition laid down by the Treaty:
- Community rules on the calculation of national aid for coking coal  
production;
- national and Community aid to be granted solely on tonnages supplied  
under regular long-term contracts;
- publication by the Commission of a guide price for coking coal on  
the world market.
(1) These incorporate three elements: national aid/ financing of  
Community aid/ pricing rules.

-  8 -
The maximum volume of trade in respect of which Community aid  
may be granted could be set at 10 million tonnes per year in­
stead of the current 14 million tonnes, in view of the overall  
reduction in the steel industry's coking requirements and the  
changes in traditional patterns of trade as recorded in the Gene­
ral Objectives for Steel 1985.
The average rate of marketing aid - which is currently fixed at  
3.10 ECU per tonne - should be appreciably increased to take  
account of the gap between Community coal production costs and  
the delivered price for imported coal.
World market prices are expected to fall this year and this could  
lead to a further increase in the alignment margin. Community aid  
might also be gradually reduced so that by the time the arrange­
ments expire the cost of coke supplies are borne in full by the  
steel industry.
This would mean that the amount of Community aid for coking coal  
would, at least for some years to come, have to be appreciably greater  
than it has been.
The maintenance of a sufficient production capacity for coking  
coal helps to strengthen the rôle of coal in supplying the Com­
munity's energy requirements.
This measure could also improve the general employment situation  
and could favour the harmonious development of economic activity  
both upstream and downstream of the mining industry, thus contrib­
uting to the achievement of the Community's essential aims.

- 9 -
In view of these circumstances, the Commission considers that  
the action falls within the framework of the EEC's activities.
The Commission will present to the Council an appropriate Draft  
Regulation, based on Article 235 and will provide for the in­
sertion of a heading for this purpose in its preliminary Draft  
for the 1984 budget.
It is intended that the other parts of the coking coal system  
relating to national aids and the commercial rules will continue  
to be dealt with in the framework of the ECSC Treaty and will  
form the subject of the appropriate Commission decisions according  
to need.
3. Other types of coal
The arrangements described above for coking coal might also be  
considered mutatis mutandis for intra-Community trade in indus­
trial or domestic coal since they would ensure greater security  
of supply and a greater volume of trade.
The pattern of trade in domestic coal rarely necessitates alignment  
and tonnages are small and highly fragmented.
As regards steam coal for which there are greater tonnages, the Com­
mission submitted a proposal for a Council Regulation for a Community  
aid system for intra-Community trade in power station coal(1) in 1978.
Under this proposal, aid of 10 ECU per tonne would be granted for  
such deliveries provided they do not exceed 10 million tonnes of coal  
per year, to be divided in the form of annual quotas among the five  
producer countries (Belgium, Federal Republic of Germany, France,  
Ireland and the United Kingdom).
(1) 0J N° C243 of 13 October 1978

At the end of ^$82 the difference between the cost of Community steam coal  
and the price of imported steam coal (around 62 ECU per tonne) amounted  
to at least 30 ECU per tonne before account is taken of the transport costs  
indicated on page 5 above.
The Commission proposes to examine with the Member States the desirability of  
developing long-term intra-Community trade in steam coal, taking into account  
the latter*s availability and the requirement for security of supply. If the  
development of such flows should appear possible, the Commission would be  
ready to propose launching them through the medium of limited Community aid.
Coal users are well-placed to assess the security value of a develop­
ment in intra-Community trade. The Commission intends therefore to consult  
with interested associations on this issue.
Lignite and peat
As the Commission’s report concludes, there is little intrar-Community trade  
in these products owing to their nature and no aid would hence be necessary  
in the present circumstances.
Transport
The Community has a highly developed surface transport network (rail and  
inland waterways). The road network plays a small role for local transport  
operations.
Intrar-Community transport has been steadily modernized but is not used  
to capacity today. Its cost is relatively high compared with sear-going  
vessels, which can carry the equivalent load of at least 30 European  
trains.
There are many well-equipped sea ports which can handle international coal  
traffic. Their handling capacity often exceeds the tonnage of vessels  
normally used to carry coal by sea.

-  11 -
Three countries (Greece, Ireland and Italy) are planning to build coal­
handling ports with a view to importing more coal. The Commission is  
unable at present to quantify the scope of the investment and the  
corresponding costs but is ready to examine, on the basis of information  
to be provided by the Member States, the advisability of Community 
intervention.
Investment aid for infrastructures of this kind may already be obtained
for Greece, Ireland and Southern Italy under the Community’s regional
policy. They might also be eligible for EIB loans from its own resources
or the NCI. Ireland and Italy may also quality for interest rebates on
1some of these loans under the European monetary system .  ECSC loans may be  
granted to facilitate Community coal trade.
6. Conclusions
(a) At the end of March 1983, the Commission will present  
a draft Council Regulation for coking coal based on  
Article 235 of the EEC Treaty and dealing with the  
financial aspect of the coking coal system. The Com­
mission will consult the Council on other aspects in  
accordance with the rules of the ECSC Treaty.
(b) The Commission will obtain from the Member States the  
information necessary to complete its evaluation of  
the problems of intra-Community trade in, and trans­
port of steam coal. In the meantime, it will gladly  
welcome any suggestions that might be made by the other  
Community institutions.
Regulation EEC 1736/79 which expires on 31 December 1983  
O.J. L200 of 8 August 1979

-  12 -
III. Modernization and rationalization (restructuring) of the production  
of coal and other solid fuels
In a paper on the rôle of coal·*·, the Commission has emphasized the  
importance of having an indigenous solid fuels industry. This means  
modernization measures to improve operating methods and restructuring  
measures to put the finances of the companies on a sound footing.
I. The modernization of coal mining
In the first place there must be an increase in investment in the  
Community coal industry aimed at modernising economic production  
capacity (or capacity that is at present only marginally uneconomic).
2Following the objectives defined in 1980 ,  the main aim of such in­
vestment must be :
- construction of new collieries;
- the creation of new pits linked with existing collieries, or
- the construction of new production capacities in existing collieries  
in order to increase or stabilise coal production.
Total investment of this kind has exceeded 5 thousand MECUS in the  
Community as a whole during the past 3 years. Of this total, 807 MECU  
have been financed by ECSC loans on the basis of Art. 54*1» some of them  
attracting interest-rate subsidies amounting in total to 14 MECU0 The  
latter amount has been limited by the financial resources of the ESCS  
budget.
10J C 105 of 26 April 1982, paragraphs 37-42  
20J 79 of 29 March 1980

- 13 -
For the 1983 financial year the Commission intends to make use of a  
sum of 9 MioECU for interest rate rebates on new loans to encourage  
investment in the production and marketing of coal (1st. and 2nd. sub­
sections of Article 54 of the ECSC Treaty).
This appropriation enables rebates to be granted on only about 25% of the loans  
that are eligible according to the criteria mentioned above.
To give further support to the modernization of coal mines it will be  
necessary to have available greater financial means. The Commission expects  
the Council to express its opinion on the desirability of such an increased  
effort. Later on, the Commission would make proposals about the means of  
financing that could be applied.
2. Lignite and peat industry
The Commission’s analysis of this industry showed that lignite and peat  
formed reliable and economically viable energy sources and that production and  
investment financing deserved some encouragement. More use should be made  
of the Community’s financial instruments (EIB, NCI and interest rate rebates  
within the EMS system as envisaged in Regulation (EEC) 1736/79)·
3. Restructuring of the coal industry
Further restructuring of the coal industry will certainly mean closing down  
a number of unprofitable pits. The process will necessarily be spread over  
several years so that the resulting difficult economic and social problems  
can be solved.
The provisions of Article 56(2)(a) and (b), which are already being applied,  
aim to provide useful measures in connection with restructuring.
See Doc. COM(82)649 final of 18 October 1982

- 14 -
a) Re-training of workers
In application of Article 5 6 paragraph 2b - and in accordance with bilateral  
agreements between the Member States and the Commission - the latter provides  
half of the redundancy aid given to mine workers made redundant by granting  
non-repayable aid towards :
a) the payment of tideover allowances to workers to help them find new jobs;
b) the payment of allowances to undertakings to enable them to pay such of  
their workers as may have to be temporarily laid-off as a result of under­
takings’  change of activity;
c) the payment of resettlement allowances to workers;
d) the financing of vocational training for workers having to change their  
employment.
In 1982, applications for the commitment of appropriations under this  
heading were related to 11 5 00 miners and amounted to 42 MioECU whereas 
the average for the previous seven years, including 1982,  was 20.4 MioECU/  
year (some of it in EUA.), divided as follows between the four main producers:
UK - 52.9$, D - 25.6$, P - 16.156 and B - 5*4$.
While it is expected that requirements for 1983,  which are likely  
to remain at the same high level as appropriations committed for  
1982, can probably be covered by the regular resources of the ECSC  
operating budget, there are also very heavy calls on the same limited  
resources as a result of the continuing rapid rate of job losses in the  
steel industry and the margin for manoeuvre will at best be very narrow.
The Commission therefore proposes to review carefully its expenditure  
forecasts on the basis of information it will seek from the Member States  
about their expectations concerning the employment requirements of the  
industry and the programmes of réadaptation and social measures with  
which they intend to support restructuring.

- 15 -
b) Industrial reconversion
Article 56 paragraph 2a of the ECSC Greaty and the Commission's  
Communications based on this Article provide for loans to be granted  
to economically sound undertakings which create jobs suitable for  
former workers in the ECSC industries on condition that the under­
takings give first refusal for such jobs to ex-ECSC workers (recon­
version). These reconversion loans can be accompanied by an interest  
rebate, granted under certain conditions. Commitments for this purpose  
amounted to 43 MioECU in and will be at a similar level in 1983·
At present, it is difficult to give precise figures for future financial  
requirements in this area because they depend on the rate at which  
restructuring occurs. The Commission will examine the financial needs,  
taking into account the augmented rôle that the other financial instruments  
(including, in particular, the actions envisaged under the terms of the  
"non-quota" section of the ERDF) will play in the future in the field of  
reconversion and in relation to the progress achieved in restructuring the coal  
industry. The Commission will make proposals as necessary on this point, using  
as a basis the measures that it has proposed for reconversion in the  
steel sector.
4. Conclusions
(a) Council opinion on the advisability of giving further  
encouragement to investments for the modernisation of  
mines and preliminary debate on the financing procedures.
(b) Use· of other existing Community financial instruments to  
encourage production and investment in the lignite and  
peat industries.
(c) Review, if necessary, of the finance required to support  
the restructuring of the coal industry.

-  16 -
IV. Hie problem of stooks
1. Hie present situation
Hie difficulties of matching coal production to the fluctuations  
of demand are well known. Rises and falls in stocks are normal  
phenomena for the Community's ooal industry (as well as for other  
mining industries).
Nevertheless, sinoe 1980, Community produce»1 !  stocks of ooal and coke  
have oontinued to grow at a tremendous rate, reaching a total of  
51 million tonnes of coal and 14 million tonnes of ooke at the end of  
1982, i.e. 21 and 23 % respectively of Community production.
2. Financial problems
Hie advantage of holding stooks is that it enables the producers to meet  
a sudden increase in demand e.g. if the economy picks up.The role  
of stooks in the security of supplies is therefore important. However,  
stook levels should not be excessive. If they are, the consequences  
for the companies and their employees are serious. As soon as the  
technical limits of stock-holding have been reached - as is the case  
at present in Germany and the United Kingdom - production has to  
be out either by part-time working (a very expensive measure) or by  
dosing pits (an irreversible measure).
Hie total value of the 51 million tonnes of coal and 14 million tonnes  
of coke held by producers at the end of 1982 was 5 000 million ECU.
To finance these stooks companies either have to run up debts with
banks or reduce their investment in modernization of production. In
view of the present high interest rates it may be estimated that the
annual costs of stock-holding - for the amounts in stock at the
end of 1982 - are 650 million ECU, or 10 ECU per tonne - in other words
22j6 of the total sum paid out in national subsidies for current coal
production.

- 17 -
3. Measures already proposed
As early as 1977 the Commission proposed introducing a system  
of Community aid for financing cyclical stocks of hard coal,  
coke and patent fuel(1). The system, on which the European Par-  
liament(2) and the Economic and Social Committee(3) gave favour­
able opinions, would have worked as follows :
- stocks equivalent to roughly one month's production (20 mio t  
of Community production) would be regarded as normal and hence  
excluded from the aid system;
- stocks in excess of one month's production and up to a level of  
two months' production (between 20 and 40 mio tonnes) would be  
regarded as cyclical stocks and hence qualify for partial finan­
cing by the Community;
- stocks in excess of 2 months' worth of production (over 40 mio t )  
would not qualify for the financing system; the cost of financing  
these stocks would be borne by the undertakings;
- the system should remain in force for three years.
Examination of this draft by the Council proved inconclusive and  
the Commission withdrew its proposal. One of the reasons put for­
ward against the proposed system was the risk of creating a prece­
dent for other industrial sectors.
The political question is whether stocks of solid fuels at present  
deserve specific treatment with a view to facilitating
in the mining industry investments for modernization which  
clearly have an interest for the Community.
(1) 0J C87 of 7 April 1977, p.6
(2) 0J C241 of 10 October 1977
(3) 0J C180 of 28 July 1977

-  18 -
4. Stocks in the lignite and peat industry
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  .  ..... 1 . .  _  .  .In
 a recent report on the lignite and peat industries ,  the Commission 
noted that production of these two fuels was economically viable. Almost  
all the lignite is used for generating electricity. In the case of  
both lignite and peat, production and consumption are both managed by a  
single undertaking so that adjusting production to consumption is an  
internal short- and medium-term organisational problem.
Nevertheless, peat production undergoes seasonal fluctuations by reason of  
the drying process, which can only take place in summer. It i^ therefore,  
inevitable that stocks of this product build up if the power stations,  
whose consumption is continuous, are to be kept supplied. By contrast  
with hard coal, here it is not the market which fluctuates, but the  
level of production. This does not appear to pose problems at present  
but the Commission would be ready, if necessary, to study the question  
further.
The problem of cyclical stocks hardly arises in the production of  
lignite and peat briquettes.
5· Conclusions
(a) Discussion in the Council on the desirability of
a Community intervention to help meet the costs of  
cyclical stocks.
(b) Analysis by the Commission of all the problems of  
storage.
Doc. COM(82)649 final of 18 October 1982

- 19 -
V. Increasing the Importation of coal
Because the Community has limited reserves of eoonomioally workable  
ooal, it is likely that its increasing coal requirements will have to be  
met by imparting from outside the Community, There is therefore a need  
for an external supply policy.
Community operators already enjoy a strong position on the international  
ooal markett which generally operates satisfactorily. It is in the  
Community's interest to ensure that this freedom of trade in ooal is  
maintained.
In the Commission's view, it would therefore be worth developing the  
oontaots whioh already exist, between the Community and the ooal-exporting  
countries. Since there is institutional machinery already in place for  
regular oonsultations, this could be used to encourage the examination of  
areas of the international coal trade whioh are of special interest and perhaps  
to discuss possible obstacles to increasing international trade in coal.
Finally, the Commission draws attention to its suggestion about extending  
the arrangements concerning notification- of the price of steam ooal imported  
from non-member countries^ which has, in the meantime, been submitted to the  
Council, and which will be useful for following the development of the coal  
market in a systematic manner.
Conclusions
a) The Commission will maintain a regular dialogue with the main coal­
exporting countries so as to ensure that external supplies are fur­
nished under conditions that are as safe as possible.
b) Beoisicm of the representatives of the governments of the Member States  
of the ECSC, meeting in the Council, concerning improvement of Community  
surveillance of ooal imports from non-member oountries.
Decision 77/707 ECSC of 7 November 1977;
OJ L292 of 16 November 1977

-  20 -
VI. Helping to solve the environmental problems oonneoted with the production  
and uae of solid fuels
Increasing the use of coal will have major environmental repercussion in  
the following three areas :
1. emissions from oombustion
2. additional waste on spoil heaps
3. an increase in the volume of ash
1. SC>2 emissions
Obviously swift action will have to be taken to reduoe emissions, and  
lay down limits. The phenomenan of acid rain is becoming more widespread  
and in June 1982 the conference in Stockholm on the subject proposed  
taking action. The Community's third action programme proposes establishing  
emission standards, and this has already been discussed ty the Council  
of Environment Ministers. At international level, the work being done by  
the Convention on long-range transboundary air pollution seems to be  
working towards the same end.
The measures whioh the Commission has taken, or intends to take, under 
the environment programme are designed to:
- proteot public health and environment by fixing limits for the con­
centration of certain speoific substances in the atmospherej
- reduoe or limit emissions of these substances by fixing emission 
standards for the main sources.
None of these Community measures is direoted exclusively towards coal or  
other solid fuels, but they do tackle the problem in general. Air pollution

-  21 -
oaused fey the burning of solid fuels is covered by the following  
measureBi some already taken and others still in the pipeline:
a) Directive 80/779/EEC on air quality limit values and guide values  
for sulphur dioxide and suspended particles limiting values for  
the concentration of SOgj
b) h, proposed Directive on air quality standards for NOg in the atmosphere;
o) p proposed Directive on the approximation of the laws of the Member  
States oonoerning the control of air pollution from industrial plants
and consecutive legislative acts in the Community;
) the environmental research programme includes research contracts on  
the measurement of air pollution and the attenuation of air pollution  
and its effects. It also coordinates research on the conversion of  
atmospherio pollutants. The Joint Research Centre programme includes  
research on the impaot of conventional power stations on the environ­
ment.
The measures referred to in (o) would not seem to raise insuperable
problems for new plants. The increase in investment cost between 15 and 20$  
for oomplete desulphurisation of the gases can be borne by the industry  
without reducing its competitiveness vis-à-vis oil. It would be beneficial  
to take swift action to lay down emission limits beoause this would reduce  
uncertainty and encourage technical innovation (by setting a standard to be 
aohieved.)

-  22 -
Existing plants are in a different position. The requisite equipment  
could prove extremely expensive and the best that can be hoped for is  
a programme for adaptation to ^installations with a sufficiently long  
life expeotanoy. Investment and costs would then have to be spread over  
a number of years.
2. Emissions of CO,
A more general problem connected with the combustion of all types of  
fossil fuels is the inorease in the concentration of COg in the  
atmosphere. Much scientific research is being oarried out, some of it in  
the Community, to evaluate the possible global and regional impact of 
higher concentrations of COg on climate and agricultural yield. Ihis is  
a problem whioh, in the long term, could become of critical importance for  
energy policy as a whole.
3. Mine waste on spoil heaps
In mining areas;the most serious environmental problem will be disposal  
of colliery spoil. As principle the cost of the measures required to prevent  
pollution should be borne by producers. The equipment and infrastructure  
required to treat colliery spoil should therefore be considered as part of  
the costs of developing the coal industry.
New ooal areas should require no direct financial support from the  
Community (unless it is justified for other reasons, e.g. regional policy).  
However, it is important to develop new methods of handling or reduoing  
quantities of waste. It would therefore seem appropriate to allocate 
limited Community support, chiefly for research and development and for  
studies into the development of suitable storage methods.

- 23 -
If mining zones have "been abandoned for a long time (or if there is no  
longer a polluter), the "polluter pays" principle can no longer he regarded  
as preventing the Community from granting aid to improve sites.
Where mining areas are also in receipt of regional state aid, the  
Community will already he granting aid under the quota section of the  
ERDF to improve the site and to reclaim the land for other purposes.
4· Ash
There are ways of using ash (particularly fly ash) hut these alone  
are not sufficient to ahsorh all quantities which arise. It is  
essential to encourage the development of new uses, and of stable  
and expanding markets for known uses and to overcome user reluc­
tance and transport cost problems. The Commission could organize  
a seminar or conference, at its own expense, to allow the Member  
States to share their various experiences and thus help to improve  
the situation.

- 24 -
5· Pollution by coking plants
As regards oombating pollution by ooking plants, the Commission is  
supporting research projects under the R&D programme on safety and  
health at work. The technical research programme on 'coal is currently 
also considering problems of protecting the environment in connection  
with combustion plant find surface installations at mines.
6. Conclusions
(a) The Commission will prepare proposals fixing emission limits for  
pollutants in the atmosphere and taking account of the specific  
circumstances of existing plants. The proposals will be transmitted 
to the Council during the second half of 1983·
(b) As regards waste from the mining of solid fuels, there should be  
increasing use of the ERDF to improve sites and reclaim
land .
(o) Community aid programmes, particularly for R£D, should be continued  
and in some oases extended in order to develop new pollution  
control methods.
(d) Current studies, particularly on the increasing concentration of  
COg in the atmosphere, should be continued.
(e) Member States should pool information on the use of fly ash.
•A

- 25 -
VII. Research, development and demonstration
On several occasions the Commission has underlined the great 
importance of Community action in the field of R,D & D in 
helping to meet the Community's energy policy objectives and 
especially to reduce its dependence on oil.
Against that general background the Community has already adopted 
in the solid fuels sector Community programmes of coal R&D under 
the ECSC Treaty and of demonstration in liquefaction and gasifi­
cation. The necessary mechanisms have also been set in force to 
ensure better consistency and cooperation.
Given the Community interest in increasing the rôle of solid fuels 
in energy strategy, the Commission believes that existing R,D & D 
activities ought to be strengthened and broadened with a new focus 
on new technologies of solid fuel use.
1. Demonstration projects
Two proposals for regulations concerning demonstration projects 
in (a) alternative energy sources, energy saving and conversion 
from oil and gas and (b) the liquefaction and gasification of 
solid fuels are currently before the Council's subordinate bodies.
Favourable opinions on these draft Regulations have been expressed 
by the European Parliament(1) and the Economic and Social Committee(2).
(1) OJ C304, 22 November 1982
(2) OJ C326, 13 December 1982

-  26  -
The purpose of the first Regulation is to develop new techniques for  
handling, transporting, burning and processing solid fuels and the  
waste substances deriving from them.
2The Regulation on the liquefaction and gasification of solid fuels  
also covers pilot industrial projects (smaller and less expensive than  
demonstration projects) so that technology which could be quickly put  
to commercial use when needed can be acquired. The impetus for  
development of gasification and liquefaction technologies was provided by  
the two oil shocks which set in train a search for new and diversified ways  
of substituting for expensive oil in short supply. Against the background  
of recession and the excess of oil products, the actions undertaken at  
world level have now slowed down. Some undertakings have even stopped  
their projects.
The importance of these technologies in the Community’s energy strategy  
thus raises the question as to whether simply proceeding with existing  
Community action is sufficient, or whether such action should be  
increased.
Proposal for a Council Regulation (EEC) on the granting of financial  
support for demonstration projects relating to the exploitation of  
alternative energy sources, energy-saving and the substitution of  
hydrocarbons (O.J. C227, 1 September 1982). For solid fuels, the  
appropriations available in the 1983 budget for this type of action  
amount to 5 MioECU.
'Proposal for a Council Regulation (EEC) on the granting of financial  
support for pilot industrial projects and demonstration projects  
relating to the liquefaction and gasification of solid fuels (O.J.  
C261, 6 October 1982). The appropriations available in the 1 983 
budget for this type of action amount to 5 MioECU.

- 27 -
2.Technological research
The Commission, pursuant to Article 55 of the ECSC Treaty, is 
encouraging research projects which are concerned with the im­
provement of mining technology and coke oven techniques. It has 
accordingly set aside relatively large sums from the ECSC budget, 
and its contribution currentlyrepresents about 10% of the coal 
producing Member States' outlay in this field.
It has now become necessary to take further steps to promote the 
increased consumption of solid fuels. For reasons already set out 
above (general interest for the economy and for the development of 
the Community's energy strategy limited ECSC budget), the Commission 
will include in its third energy R&D programme - now in preparation - 
a chapter containing a sub-programme for solid fuels covering : 
heat and electricity generation; transport; handling and certain fun­
damental research. Problems of environmental protection in the sectors 
mentioned will also be included. The third R&D programme will be for­
warded to the Council shortly.
The sub-programme in question has already been included in the frame­
work programme transmitted by the Commission to the Council on 
21 December 1982 (Doc. C0M(82) 865 final).
3. Conclusions
(a) Adoption by the Council of the two draft Regulations 
concerning demonstration projects.
(b) Preparation by the Commission of a sub-programme for 
technologies using solid fuels, under the third Com­
munity energy R&D programme which will be transmitted
to the Council before the end of the first half of 1983.

S u m m ary  table
SubjectProposals before the Council which 
the C om m ission wishes to see 
adoptedProposals and analysis in prepa­
ration which the Com m ission will 
send to the CouncilDiscussions which the 
Commission wishes the C oun­
ci l to hold
I. Increased use of solid Adoption by the Council of :
fuels a) the tw o recommendations 
concerning measures to encourage 
investment in the conversion to 
solid fuels of installations in 
industry, public buildings and in 
district heating systems ;
b ) the Proposal for an E E C  regu­
lation on the paym ent of financial 
incentives in support of categories 
of investment in the rational use 
of energy.
II. Intra-Community coal a) A t the end of M arch  1983 b) The Commission will ob-trade the Com m ission will present 
a  draft Council Regulation for  
coking coal based on Article 
2 3 5  of the E E C  Treaty and 
dealing with the financial 
aspect of the coking coal 
system. T he Com m ission will 
consult the Council on other 
aspects in accordance with 
the rules of the E C S C  Treaty.tain from the Member  
States the information  
necessary to complete it:  
évaluai ion _of the pro­
blems of intrar-Community  
trade and transport of  
steam coal. In the mean­
time, it will gladly  
welcome suggestions that  
may be made by the other  
---Community institutions.

S u m m ary  table (continuation)
SubjectProposais before the Council which 
the Com m ission wishes to see 
adoptedProposais and analysis in prepa­
ration w hich the Com m ission will 
send to the CouncilDiscussions which the 
Com m ission wishes the C o u n ­
cil to hold
III. Modernization and
restructuring of the 
productiona) Council opinion on the 
advisability of giving 
further encouragement to 
investments for the m oder­
nization of mines and preli­
minary debate on the finan­
cing procedures.
b) U se of other existing 
C om m unity financial instru­
ments to encourage produc­
tion and investment in the 
lignite and peat industries.
c) Review, if necessary, of 
the finance required to 
support the restructuring 
of the coal industry.
IV . Stocksb) The Commission will analyse
all the-problems connected,  
with storage.a) Discussion in the  
Council on the desirability 
of a Community intervention­
to help meet the costs of  
cyclical coal stocks.

S u m m ary  table (continuation)
SubjectProposals before the Council which 
the Com m ission wishes to see 
adoptedProposals and analysis in prepa­
ration w hich the Com m ission will 
send to the CouncilDiscussions which the 
Comm ission wishes the C oun- 
cil to hold
V . Coal imports from  third 
countriesDecision of the representatives of 
the governments of the M e m b e r 
States of the E C S C , meeting in the 
Council, concerning improvement of 
the C om m unity surveillance of coal 
imports from  non-m em ber countries 
(1).
VI. Environment (2) a) Proposals fixing emission 
limits for pollutants in the 
atmosphere and taking account
of the specific circumstances of 
existing plants. T he proposal 
were be transmitted to the C o u n ­
cil during the second half of 
1983.
b ) A s  regards waste from  the 
m ining· of solid fuels, there 
should be increasing use of the 
ERDF to improve sites and  
reclaim land.
c) C om m unity programme, 
particularly for R  8  D , should 
be continued and in som e cases 
extended in order to develop 
n e w  pollution control methods..
d) Current studies, particularly 
on the concentration of C O 2 in 
the atmosphere should be conti­
nued.
(1) This concerns, moreover, the pursuit of a  regular dialogue with the m ain coal-exporting countries, within the framework of 
existing procedures.
(2) In addition to the activities indicated in the table, the Com m ission proposes to organize a  seminar or a  conference on ash 
which will facilitate an exchange of experience am o n g  the M e m b e r States and will hence improve the possibilities for ash
I i - f  i I  t y inn.

S u m m ary  table (continuation)
SubjectProposals before the Council w hich 
the Com m ission wishes to see 
adoptedProposals and analysis in prepa­
ration w ich the C om m ission will 
send to the CouncilDiscussions w hich the 
Com m ission wishes the C oun- 
cil to hold
VII. Research, development 
and demonstrationa) Adoption b y  the Council of the 
two draft Regulations concerning 
demonstration projects.b ) Preparation b y  the C om m ission 
of a  sub-programme for techno­
logies using solid fuels, under 
the third C om m unity energy R  8  D  
program m e w hich will be trans­
mitted to the Council before 
the end of the first half of 
1983.