ARCHIVESHISTORIQUES
DELACOMMISSION
COLLECTION RELIEEDES
DOCUMENTS "COM"
COM(79)322
Vol.1979/0121

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COMMISSION OFTHEEUROPEAN COMMUNITIES
COMMISSION REPORT TOTHE COUNCIL
ONMEASURES TOPROMOTE THE CONSUMPTION
OFCOAL INTHE COMMUNITY
REPORT BYTHE COMMISSION TOTHE COUNCIL
ONNATIONAL COAL PRODUCTION POLICIES INTHE COMMUNITY
REPORT BYTHE COMMISSION TOTHE COUNCIL
ONNATIONAL COAL IMPORT POLICIES
AND THE WORLD COAL MARKETCOM (79)322 final
Brussels ,21st June 1979
V L-?
C0MC79 )322 final

COMMISSION REPORT
on
measurestopromotetheconsumption of
coalintheCommunity

I
AttheCouncilmeetingof27March1979theCommission wasaskedtosubmit
areportonthefollowing pointsasquicklyaspossible :
-onthemeasures alreadytakenorinpreparation bytheMemberStatesand
bytheCommunity topromotetheuseofcoalforthegeneration ofelec­
tricity andforothersectors,inparticular industrial ;
-ontheresultsofthesemeasures ineachMemberState;
-ontheprogress likelytobeachieved andthenational orCommunity
legislative orfinancial measures whichmightproducesuchprogress.
Thereportisherebysubmitted.

Themeasures topromotetheconsumption ofcoalintheCommunity
INTRODUCTION
1.Whentheoilcrisisbrokeoutin1974,theCouncildecidedforreasons
connected withthesecurity ofenergysupplythattheCommunity'scoal
production shouldbestabilized undersatisfactory economic conditions
atalevelof270milliont(=250milliontee)until1985.
Coalimportsfromnon-Community countries werealsotobeincreased ,
2.Becauseofitslowerprice,coalimported fromnon-Community countries
iscompetitive andfindsamarketintheCommunity withoutanyaid
measures onthepartoftheimporting countries.Whenstakingoutits
'potential marketintheCommunity,imported coalissometimes evenhit
byrestrictive measures.
3.TheCommunity'scoal-mining industryisnotcompetitive onitsown.
Asaresult,becauseofthepolitically motivated production target,
supportmeasures havetoensuretheconsumption ofthecoalproduced.
4.Measures helpingtosolveenvironmental problems maybeofparticular
importance intheenergysectorbuttheyaffectthevariousenergy
sourcesindifferent ways.Therearewide-ranging environmental pro­
tectionmeasures inthecoalsector,too.However,becauseofregional
conditions ,theecological problems intheindividual countries areof
widelyvaryingimportance .Thereportdoesnotcoverthesemeasures.

-2-
II.Description ofthemeasures
A.National measures
Themeasures Listedbelowconcernonlythecoal-producing MemberStates.
Noneofthenon-coal-producing MemberStateshavetakenmeasures to
promotetheuseofcoal.Thesecountries would,however,makeasmall
financial contribution ifthey participate inthecommonfinancing
ofCommunity measures.
Subsidies
5.Themostimportant factorinmaintaining coalconsumption andthus
coalproduction antheCommunity isthefinancial measures takenby
theGovernments ofthecoal-producing MemberStates.Theproduction
companies aregivenaids,enabling themtoinvest,rationalize ,moder­
nizeandcompete,thusgivingthemachanceofsurvival.
6.Subsidies areprohibited underArticle4(c)oftheECSCTreaty.
ButtheCommunity established in1964/65^becauseofsocialandcoal
policyproblems,thelegalbasisforgranting aidstothecoal-mining
industry.Theactuallegalframework comprises :
-Decision 73/287/ECSC(thecokingcoalscheme)
-Decision 528/76/ECSC(generalsystemofaids)
-approval ofothermeasures.
•»i"-"»•"•••(49

-3-
7mTheGovernments oftheMemberStateshavemadevaryinguseofthe
possibility ofgranting variousformsofaidandhavetherebyacted
inaccordance withnational conditions andnational economic policy
considerations .Table AoftheAnnexlistsallthesemeasures andthe
amountsofaidpaidin1978.TheTablerevealsthefollowing points :
-Thecoal-mining industryisgrantedaidtocoverolddebtsinall
coal-producing countries,although theamountvaries.Theolddebts
arecostsarisingforthecompanies asaresultoftheclosureof
pits.Theaidscoveronlypartoftheactualolddebtsbutmakeit
easierforthecompanies tomeetthesecostsatall.
-Theindirect aidstopromotecurrentproduction concernspecific
measures ofsecondary importance :
-FederalRepublic :thegranting ofspecialdepreciation rate£for
thecompanies
-France :aStatecontribution toCERCHAR
-Belgium :varioussocialwelfaremeasures forcoal-miners .
-Thestructure ofthedirectaidstocurrentproduction variesbetween
Belgium andFranceontheonehandandtheFederalRepublic andthe
1
•UnitedKingdom ontheother.Belgium andFrancegrantaidsonlyto
coverlosses;theFederalRepublic andtheUnitedKingdomemploy
varioustypesofaid:
-Theaidsforcokingcoalareproduction aidswhichinpractice,
represent aidstocoverlosses.
-Overall,thevaryingfinancial situation ofthecoal-mining industry
leadstowidelyvaryingaidspertonne;theaidpertonnerateis
lowestintheUnitedKingdom.
1 ...^Therelatively lowamountrecordedforinvestment aidinBelgium
servesonlytomaintain thetechnical safetyofthemines.
^See"ReportbytheCommission onnationalcoalproductionpolicies
intheCommunity "(p.3and4).

-4-
8.Theamountspaid inaidonlypartlycoverthecompanies' losses.However,
thecompanies *remaining lossesafterthepaymentofaidaresolowthat
theyareabletosurvivewhileexperiencing difficulties ,
9.Apartfromtheamountsofaidrecorded inTableA,theMemberStates
grantaidsforcoalresearch.Thetotalsareasfollows :
-FederalRepublic ofGermany 115-0millionEUA
-Belgium 2.8million EUA
-France 27.5million EUA
-UnitedKingdom 40u0million EUA
10.TheGovernments oftheMemberStatesplanned nonewmeasures apartfrom
thoseindicated inTableAfor1978.Changesinthegrantofaidhave
occurred inthepastonlyasaresultofchangesintheamountsofaid.
Theamountsofaidhaverisencontinually since1975andreachedthe
levelindicated inTable Ain1978.
Protective measures
11.Forthesakeofcompleteness ,itshouldbementioned thattheMember
Statespossessvariousformsofspecialprotective measures (e.g.taxes
onfueloil)whicharenot,however,relevant inthiscontext.
12.NoneoftheMemberStatesimposesdutyoncoalimported fromnon-Com-
munitycountries thoughthereexistslegallyapossibility intheFederal
Republic ofGermany.
orCoalimportsaresubjecttorestrictive coordinating measuresaffecting
quantity asfollows :
-intheFederalRepublic asaresultofthemaximumannualimportquota
of5«,5miIliont;
-inFranceasaresultoftheCoordination ofcoalimportswiththesales
requirements oftheCharbonnages deFrance,conducted bytheATIC.

-5-
13.TheUKgovernmentrecentlyhasgivennoticeofitsintentiontorestrict
byLicensingtheimportofcokingcoalfromthirdcountries.
Othermeasures
14.ThespecificmeasurestopromotetheuseofCommunitycoalinpower
stationsintheFederalRepublicarebasedonthethirdelectricity-
from-coal law(seeTableA).Thislawprovidesforanannualcoalburn
averaging 33milliontonnesofCommunitycoalbypublicandprivate
electricity producersinGermanyupto1986.
15.TheFrenchandBritishGovernments persuadeandpresstheelectricity
industrytouseCommunitycoal.
Community measures
16.In1978theCommission financedthefollowingpaymentstothecoal-mining
industryfromtheECSCbudget:
-onthebasisoftheECSCTreaty:
*"Article54:interestsubsidies oninvestment loansforoneproject:
-onthebasisofDecision73/287:aidforcokingcoal:6.0millionEUA.
17.Loanstotallingalmost300millionEUAin1978weregrantedtothecoal
miningindustryunderArticle54whichsplitupasfollows:
18,TheCommission hasadopteddecisionsallowingtheGovernments ofthe
MemberStatestograntaidstothecoal-mining industry(seepoint69.0millionEUA
"Artide55:researchaids:16.0millionEUA
1"Article56:socialandredeployment measures:15.0millionEUA
Collieryinvestment (underground )
Collieryinvestment (surface)
Cokeovenplants
Powerstations/districtheating
Trainingfacilities191.67millionEUA
64»74millionEUA
5-80millionEUA
35«08millionEUA
0.26millionEUA
297.55millionEUA
above).
1estimated

-6-
Decision 73/287/ECSCsetsupaspecialaidsystemforcokingcoaland
cokeforthesteelindustry.
Decision 528/76/ECSCcreates aCommunity systemofmeasures takenby
theMemberStatestoassistthecoal-mining industry.
19.In1975directivesof theCouncilwere issuedtorestrict theuseof
fueloilandnaturalgasinpowerstations.
20.TheCommunity ishelpingtofinancedemonstration projects ofwhich
coalgasification andliquefaction couldbeofparticular significance
forfuturecoalconsumption ..(50million EUAfor4years).
&
21.TheCommission hassubmitted variousproposals totheCouncil :
-1977:aproposal foraCommunity aidsystemforfinancing cyclical
stocksofhardcoal,cokeandpatentfuel.
-1978:aproposal foraCommunity aidsystemforintra-Community trade
inpowerstationcoal.
-1978:aproposal foraCommunity aidsystemfortheconstruction of
coal-fired powerstations.
-1978:proposal forimproving andextending theexisting schemefor
cokingcoal.
Allthosemeasures areplannedforaperiodofthreeyearsinorderto
alleviate thecoal-mining industry'scurrentdifficulties .Theyare
alsointendedtocreatesolidarity inth«coalsectorbetweenthepro­
ducercountries andtheconsumer countries whensolvingtheCommunity's
energyproblems,andadecrease oftheintra-Community coaltradeshould
beavoidedbecausecoalproduction wouldbediminished consequently .

-7-
III.Results ofthemeasures
22.Itisdifficult toquantify theresults.Whatwouldhavebeenthetrend
ifnomeasures hadbeentaken?
TheuseofCommunity coalwouldcertainly havedroppedconsiderably
andcoaloroilimportswouldhaverisencorrespondingly .
Production -wouldcertainly havedroppeddrastically .Thisdropwould
havebecomeirreversible withthereduction incapacity.Companies would
probably havefolded,leadingtoallthesocialproblems andthecon­
,sequences forthesecurity ofCommunity energysupply.
23.Compared withthispicture,theactualdevelopment showsthatthe
measures havebeenmoderately successful ,although evidently ithasnot
beenpossible toovercomealldifficulties .
Thesubsidies enabledthecompanies topursueanappropriate price
policyandmarketsupportpolicyonthemostimportant marketsinorder
tostabilize salesasfaraspossible.Other,consumer-related ,measures
'hadacomplementary effect.Consumption couldnotindeedbeincreased
completely tothelevelofCommunity production -theproducers had
accumulated around57milliontofcoalandcoke bytheendof
1978buttheundertakings wereabletosurviveunderdifficulties
withoutlosingproductive capacity.'
Thenumberofproducing pitsintheCommunity hasdroppedbetween 1974
and1978(D=12,F=11,B=9,UK=39),buttheseclosures havebeen
madeforreasonsofrationalization (exhausted deposits,obsolete in­
stallations ,pitmergers).
24.Themeasures takenhavenotstabilized consumption inallMemberStates
orinallsectors (seesection AofTable C).
Coaldeliveries tocokingplantscouldnotbestabilized astteconsumption
ofcokebythesteelindustry droppedasaresultofthesteelcrisis.

-8-
Decreases werealsorecordedindomestic andotherindustrial sectors,
althoughstabilization canbedetected since1975*
Themeasures havehaddistinct consequences inthepowerstations.
Coalconsumption hasincreased ;theamountofelectricity generated
fromcoalisincreasing whilethatgenerated fromhydrocarbons has
decreased .
Electricity generation intheCommunity (TWh)
fromcoal fromoilandnatural gas
1974 294.2 438.4
1978 377.0 1 414.0
Theformertrendforcoal-generated electricity tostagnate andelec­
tricityfromoilandnaturalgastoincrease considerably –which
couldbeobserved upto1974-hasbeenhalted.
25.Therelatively favourable trendtowardscoalintheelectricity sector,'
however,givesrisetothefollowing comments :
–Theincreaseinconsumption doesnotalterthefactthatGermanyand
theUnitedKingdomaccountfor80$ofthesolidfuelsusedforthe
generation ofelectricity intheCommunity .
-Investment innewcoal-fired powerstationshasnotkeptpacewiththat
inoil-orgas-fired plantleadingtoadeteriorating positionfor
theformercomparedtothelatterandaggravating theaverageage
andthermalefficiency gapbetweenthetwotypesofgenerating facilities ,
AscanbeseenfromTableB,only4»487MWofnewcoal-fired power
stationcapacitywillbetakenintoserviceintheCommunity in1979
and1980.

26.Trendsofinvestment inelectricity generating installations upto1985
indicatethattherateofinstallation ofoil-andgas-fired capacity in
theCommunity ismuchgreaterthanthatofsolid-fuel-firedcapacity tas
thefollowing Tableshows:'
TheDevelopment ofPowerStationCapacity intheCommunity
(SourcesMemberStates'1978National Programmes )
GW(Net)
. 1221 1221 1222....
SolidFuels 103.4 119.1 130.2
OilandOas 105.0 132.5 .126.0
Hydro 35*5 39*6 41*8
Nuclear 18.5 84.9(79.6)154.8(140.7)
()aDownwardrevisionofnuclearcapacityforecastsincemid-1978
Itshouldbenotedthat,eveniftheprojected increase insolid-fuel -.
firedcapacityto120GWby1985isinfactachieved ,thiswillbebarely
sufficient ,atcurrentplantutilisation rates,toabsorbthe176m.t.c.e.
ofsolidfuelcontribution toelectricity production forecastforthatyear.
Furthermore ,itisforeseenthattheoiluseinpowerstationsin1985
willbe30$(18m.t.o.e.)greaterthanin1978,despitetheabovesolid
fuelcontribution ,andtheoilusemaybeevengreaterifthecurrent
reducednuclearcapacity estimates arereflected inincreased oilburn.
Itshouldalsobenotedthatthe130GWofsolid-fuel-firedcapacity
shownintheaboveTablefor1990includes muchnewplantforwhichfirm
decisions havenotyetbeentaken.Thereduction inthenuclearcapacity
estimates ismuchgreaterthanthatfor1985andtheachievement ofthe
140GWcurrently forecast mustbeopentodoubt.Inthissituation the
possibleincreased recoursetooilcouldbeevengreaterthanin1985.
Plantutilisation ratesaredependent ,interalia,ontheagestructure of
thesolid-fuel-firedcapacity *Preciseindications ofthestructure arenot
g^gu^rently available ,buttheservicesoftheCommission hopetohavetheseinaxCHi^afiirTn thenearfuture.

-10-
Thisundesirable trendofincreasing oilconsumption canbehaltedonly
byMemberStates'efforts to:
-ensurethetimelycompletion ofcurrentcommitments forincreased
solid-fuel burningcapabilities }
-takeearlydecisions onfurther newsolidfuelcapabilities .
27.Iflookingatthetrendoftotalconsumption countrybycountry(section B
ofTableC),thefollowing pictureemerges:
-ThedownwardtrendinGermanymainlyreflects theweakeconomicposition
ofthesteelindustry .
-Consumption isincreasing inPrancebecauseofthelargeramountsused
forgenerating electricity .
-Thesituation isBtableintheUnitedKingdom }ithasbeenpossible to
compensate forthedropindemandinvarioussectorsofusebyincreasing
consumption forthegeneration ofelectricity .
Ingeneral,coalconsumption doesnotseemtoriseintheothercountries
since1976.
28.Community coalhasnotbeenabletokeepupwithimported coalasregards
theconsumption trend(seesection CofTableC).Theincreaseincoal
importsconcerns onlypowerstationcoal.Theimported powerstationcoal
haslargelyfoundanoutletonnewmarkets,inparticular inPranceand
Denmark,asitwouldhaverequiredconsiderable financial sacrifices to
supplyCommunity coaltothesemarkets.
29«Theintra-Community tradeincoal,85foofwhichisaccounted forbyGerman
coal(mainlycokingcoal),declined upto1977becauseoftheweaknessof
theCommunitysteelindustry (seesectionDofTableC).Therewasno

increaseuntil1978whenGermancompanies supplied Denmark,Pranceand.
Belgiumwithmorepowerstationcoaldespitetheconsiderable financial
sacrifice .
30.Thetrendofcoalproduction intheCommunity (seesectionEofTableC)
showsthat,despiteallthesupportmeasures ,ithasnotbeenpossibleto
preventadeclinetoalevelwhichisrelatively farbelowthe"stability-
oriented"production of270milliont(t=t).Thisisduetotworeasons:
-Asitwasnotpossible tofindanoutletforalltheproduction between
1975and1977»thecompanies accumulated largestocks(62milliont
attheendof1977»57milliontattheendof1978)»leadingtopart-
timeworkparticularly intheFederalRepublic .Thismeasureprevented
thelossofproduction capacity asaresultofashortage inoutlets.
–Pitsareoftenclosedforrationalization purposes .OnceCommunity
production stabilized andmarginalpitswereclosed,theexisting
modernized ornewlyopenedpitshadtoincrease production ;sofar,
thishasnotbeendonetothenecessary extent,partlybecauseold
capacity wasnotscrappedatthesametimethatnewcapacity was
createdandpartlybecausethemarketdoesnotjustifyanyincrease
inproduction .
IV.Potential progress
31.Themeasures takenbytheGovernments ofthecoal-producing countries-
listedinChapterIIofthisreport-showthatextensive effortshave
beenundertaken withahighfinancial outlay.
Thereisnoreasoninthepresentsituation torecommend thattheGovern­
mentsofthecoal-producing MemberStatestakenewmeasures .Ifthe
situation ofthecoalmarketshouldchange,thesubsidysystemssetup
bytheCommission givesufficient scopefortakingneworabolishing
existing measures .

-12-
Pastexperience hasalsoshownthatitisnotpossible toaskthe
Governments ofthecoal-producing MemberStatestoincrease theamounts
ofaidfortheexisting measures inordertoeasethedifficulties of
thecoal-mining industry.Production capacity servingintra-Community
trademayhavetobecloseddownasthe"export"ofthehigh,subsidies
onthesesupplies cannolongerbebornebythepublicbudgetofthe
producer country.Community production couldnotbestabilized ifthis
occurred .
32.Compared withthenationalefforts,theCommunity'sfinancial measures
arefew.
Community measures would'therefore beusefulinsuchasituation ,although
itmustbeensuredthattheycomplement ,andsodonotconflict with,
national measures .IfCommunity solutions wereputforwardaccording to
thesecriteria ,thiscouldrepresent progress towardsdistributing the
costofproducing Community coalatleastpartlyamongstallMemberStates
inordertoprovideabetterguarantee ofstableCommunity production .

Table A
Financial measures (1)awarded "bytheMemberStates
infavourtothecoalindustry in1978
million EUA(2)
Belgium Germany FranceUnited
KingdomCommunity
General measures
a)Aidtocoverinherited
liabilities 0.4 203.4 70.7 ι22.0 296.4
b)Aidforcurrent
productioni
i)indirectaids 17.4 9.1 5.9 32.4
ii)directaidsfor
-investment and
innovation (3) 7.0 319-9 326.9
-qualified personnel 43.1 5.2 48.3
-stocks 48.0 56.2 104.2
–ateancoal 45.8 45-8
-covering losses 144.5 431.6(4)76.9 653.0
B.Aidforcokingcoal 80.4 442.3(4)1.7 7.7 532.1
C.Otheraids : 1
1692.3(5) 692,3
Ρ·Total(A+B+C) 249-7 1.758.1 509.8 213.8 2,731.4
ESUApertonneof
production 37.89 19.51 26.01
t11 11■*1.75 11.47
Financial measures inthesocial~ecv;'-fieldarenotincluded
1EUA-2.60IM
5.63FF
41.00 BFA
0.65UKL
3Estimatedtotalinvestment in1978inthecoalindustry (million EUA):Germany310,
Belgium24,France48,UnitedKingdom556*
ΑProvisional
^Third"Vers*ronrungsgesetz "

Table B
Solid Fuel Burning Capabilities
(Public supply only )
(inMW (Net))
I
INew capability added
from 1974 to1978
(inclusive )Newcapability expected
toenter service
in1979 and1980
IByconversion New plant Byconversion New plant
Belgium -706
Denmark 582 808 980
Germany 4,301 1,782
France 2,470
Ireland 37
Italy 1,220 1,796
Luxembourg
Netherlands 692 1,223
United Kingdom 3,617
* 1|502
Community 5,670 7,955 2,604 4,487
Source :UNIPEDE

TableC
Development ofcoalconsumption intheCommunity
milliont(t»t)
À*Byconsumer groups
!1974 1975 1976 !1977 I1976
IPowerplants 129,3 127,0 149,6 151,5 159,2
ICokingplant8 107,0 102,6 99,5 89,0 82.6
IIndustry (incl.steel) 18,3 16,1 15,5 16,1 15,9
IDomesticuse(incl.patentfuel)33,8 28,0 25,6 25,2 25,1
IOthers 8,0 '6,7 4,6 5,2 4,6
JTotal296,4 280,4 294,8 287,0 287,4
B*Bycountries
IBelgium . I18,6 I14,8
85,715i8 15,6 I16,7
IGermany 97,7 89,0 81,2 81,6
IDenmark 3,0 3,4 4,6 5,4 5,7
IPrance J 39,9 36,9 43,2 41,9 43,2
IIreland 0,8 0,6 0,7 0,8 0,8
IItaly 13,3 12,3 12,7 12,6 12,1
ILuxembourg 0,6 0,5 0,6 0,5 0,6
INetherlands 4,2 3,8 4,8 4,7 5,3
IUnitedKingdom 118,2 |I122,4 123,4 124,3 121,4
C«Byorigin
IImportedcoal(fromthird jI II
Icountries ) 38,0 41,1 43,9 46,0 44,9
ICommunity coal 258,4 239,3 250,9 241,0 -242,5
Intra-Community exchange
ITotaldeliveries I19,8 I I1Z5 I_
18,3
Ithereofs
IfromGermany i' i13,4 11,6 12.2 15,5
IfromtheU»1C«1.71.9 1,1 |1,7 2/1
E«Coal .production
IBelgium . 8,1 .7,5-1 7,2 7,1 6,6
IGermany 101,5 99,2 96,3 91,3 90,1
IPrance 22,9 22,4 21,9 21,3 19,7
IUnitedKingdom 109,2(1)127,8 122,2 120,7 121,7
INetherlands 0,8
Total 242.5 256,9 247,7 240,4 238,1
(l)Industrial dispute

REPORT BYTHECOMMISSION
on
National Coalproduction policies intheCommunity

Atitsmeeting on27March1979,theCouncilconcluded that;since
Community production isofstrategic importance forthesupplying ofthe
Community /,theCommission shouldbeinvitedtoprepare ananalysis of
nationalpoliciestobringoutthecommonfeatures andthelimits-notably
economic-ontheMemberStates'andtheCommunity'sactioninthisfield".
Thatreportisherewith submitted ,

National coatproduction policies intheCommunity
IINTRODUCTION
1.OfthenineMemberStatesoftheEuropean Community,onlyfiveproduce
hardcoal:Belgium,theFederalRepublic ofGermany,France,Great
BritainandIreland.Irelandhasnotbeenconsidered inthisreport,
sinceitproduces onlysome50000tannually.
2.Inits1974decisions theCouncil recommended thatCommunity coal
production bestabilized atits1973level(270milliont,t=t)under
satisfactory economicconditions asacoalpolicytarget.
3.Stabilization ofCommunity outputdoesnotmeanastabilization ofthe
outputofallpits,coalfields orcountries.Varyingcircumstances
requirethatoutputbereducedinlow-productive coalfields andincreased
inthosewithhighproductivity .
Notonlyproductivity ,butalsootherfactorssuchasthetechnical
condition ofthepits,geological conditions ,thesizeofreserves,etc.
playapartintheclosingordevelopment ofpits.
4.Ownership playsapartinthepolitical measures takenbythegovernments
oftheMemberStatesinrespectofcoalproduction .Theminingindustry
isnationalized inFranceandBritain,sothatthegovernments ofthose
countries areabletoexertadirectinfluence .
Belgium'scoalindustryisprivate,bytthegovernment isableto
influence coaloutputthroughthegranting ofsubsidies.Thesameapplies
totheFederalRepublic <ofGermany,whereminingcompanies arealso
privately owned,exceptintheSaar.
5.Subsidies payedin1978areindicated inTableAoftheCommission's
reportonmeasurestopromotetheconsumption ofcoalintheCommunity.

-2-
II.Nationalpolicies
A.BELGIUM
6.TheBelgiancoalindustryisingreatfinancial difficulties .Returns
fromthesaleofcoalcoverbarely50%ofproduction costsandthe
largesubsidies provided bytheBelgianGovernment areaconsiderable
strainonthenational budget.Thelimitsto'theamountofstrainit
willbeararediscernible ,foroutputisnotmaintained inallcoal­
fields.
7.Thesituation isnotthesameinbothBelgiancoatfields :
i)Production willceaseby1981intheSouthcoalfield.Theclosureof
pitsissetoutinagovernment programme andclosures havebeenstag­
geredinsuchawaythattheywitInotcauseregional andsocialpro­
blems.
ii)Production intheCampinecoalfield istobekeptat7milliont
annually withthehelpofsubsidies,tosupplytheBelgiansteel
industry withcoke.;
B.FEDERAL REPUBLIC OFGERMANY <
8.ThecompetitivityoftheGermancoalindustryispporandthefinancial
situation oftheminingcomc?-ies difficult,eventhoughcost-covering
pricesareobtainedforpowerstationcoalunderthethirdelectricity -
from-coal law.Theindustry needsrelatively highsubsidies (particu­
larlyforcokingcoal),whichplaceanoticeable strainontheFederal
Government'sbudget.Limitswillbecomeevidentiftheindustry'sneed
forsubsidies continues'to grow.'
Germanoutputconsists mainlyofcokingcoal.
9.Thesubsidies grantedbytheFederalGovernment takeanumberofforms
andareintended mainlyas

-3-
i)coverforinherited .liabilities
i"Pinvestment aidsand
iii)cokingcoataids,
10.TheFederalGovernment isatpresentbasingitsplanson'theassumption
thatoutputistobestabilized atalevelofsome90milliont.
SinceGermanundertakings exportsome28milliontofcoalandcoketo
otherCommunity andnon-Community countries everyyear,itisanopen
question whetherthesedeliveries ,whicharesustained bylargepublic
subsidies,shouldbemaintained attheirpresentlevel, '
mι
Thetwomajorcriteriaforgrantingsubsidies aretheavoidance of
regional andsocialproblems andtheensuringofthenation'senergy
supply.
11.Thetechnical andeconomic situationsin altGermancoalfields aremore
orlesscomparable ,'
C.FRANCE
12,ThecompetitivityofFrance'scoalfields varies.Allcoalfields need
government subsidies tocovertheirfinancial losses.Thesesubsidies
placeaheavystrainontheFrenchnational buget.Inanycase,coal
production doesnothaveahighpriority onFrance'slistofenergy
sources :
i)Insomecoalfields production cannotbeincreased forgeological
reasons. -
ii)Production coverst£ssthan50%ofFrance'scoalrequirements and
onlyabout7%ofitsoverallenergyrequirements .
iii)Heavyuseismadeofopportunities tosupplythecountrywithcheap
imported coal-someofitfromFrench-owned minesintheUSA.

-4-
13,TheGovernment hassetupproduction programmesfortheindividual coal­
fields:
i)By1985theNord/Pas-de-Calaiscoalfieldwillreduceitsoutputto1
to2milliontandtheCentre-Midi fieldto2to3million.Pitsare
beingcloseddownaccordingtoplan,inordertoavoidregionaland
socialproblems.
ii)Annualproductionisbeingkeptatsome10millionti.ntheLorraine
coalfield,sinceitsfinancialsituationisrelatively goodandthe
coalisneededtosupplythesteelindustrywithcoke.
DUNITEDKINGDOM
14.TheBritishcoalindustryistoincreaseitsproduction;itscompetitive­
nessisgoodandthefinancialsituationoftheNCBisrelativelysatis­
factory,althoughsomesubsidiesareneededforunderground mining.The
productivity ofitsopencastpits(annualoutput:some14milliont)
isoutstanding.
Britain'sproductionconsistsmainlyofpowerstationcoal.
15.Outputwillbeincreasedto130milliontormorein1985.TheBritish
Governmentisprovidingfinancialsupportforthemodernization ofpits
andtorelievetheNCBofextraordinary costs.
Becauseofcurrentlylargestocks,thoughtisbeinggiventopossibilities
ofexportingcoaltootherCommunitycountries.However,prospectsare
notgoodbecauseofthefinancialsacrifices involved.
16.Productivity andfinancialsituationvaryconsiderably betweenthe
individualcoalfields.Productionplanningforthecoalfields andthe
industryasawholeisinthehandsoftheNCB.'
TheNCBhassteppedupinvestments considerably andextensivemeasures
havebeentakentomodernizepitsandbuildnewones.TheSelbyfieldis
beingnewlydevelopedandistohaveaproductioncapacityof10milliont
asfrom1985.

-5-
III.CONCLUSION
17.Despitedifferingnationaltrendsthereareprinciples whichareobserved
byallgovernments inthesameway:
a)closingdownofmarginalandworked-outpitsforreasonsofrationa­
lizationwhiletakingregionalandsocialproblemsintoaccount.
b)Development ofgoodpitsandfieldstoreduceproduction costsand
cheapenthesupplyofcoal.
c)Cokingcoalproductionisgivenprimaryimportance asasourceof
supplyforthesteelindustry. .
18.Addinguptheestimatedoutputsoftheindividual MemberStatesgivesa
totalof240to250milliontfortheCommunityintheyear1985.This
quantityisnotfarfromthe270milliontwhichtheCouncilwasaiming
atforthesameyear.
Comparedtothisforecasttheactualproduction of238,1milliontis
lowerbutcouldbeincreasedagain.Itshouldhoweverbepointedout
thatclosureswhicharesubjecttothecriteriaofoperational rationa­
lizationbyundertakings andofregionalandsocialproblemscouldnot
besynchronized withthetotallydifferentcriteriaofinvestmentinnew,
up-to-dateplant.Theconstruction periodsarelongandtheopportunities
forprovidingfundsforfinancingtheinvestments aredifferentineach
undertaking.Inshort,clo^*downs andnewventurescanbebalancedout
onlyoverlongperiodsoftime.
19#Becauseofthestrainimposedonpublicbudgetsbythegrantingof
subsidies,limitsarediscernible,alongwithathreattothefuture
development ofCommunityproduction.Ifaids-andsupplies-areli­
mitedbytheproducingcountriestotheirownmarkets,becausetheir
governments arenolongerpreparedtofinancetheburdenofsubsidizing
exports,andnoCommunityaidwhatsoeverwillbemadeavailable,itap­
pearsoutof.theQuestionthataCommunityproductiontargetof270million
twillbemet.in1985.

REPORT BYTHECOMMISSION
on
National CoalImportPolicies
andtheWorldCoalMarket

I
AttheCouncilmeeting on27March1979theCommission wasaskedto
present areport
"onthevariousnational approaches,withintheCommunity/regarding
coalimportsandastudyonthepresentsituation ofandtheprospects
ofdevelopment forthe(world.)coal market".
m
TheCommission submitsthisreportherewith#

•CHAPTER' I •
.• I >
I
National coalimportpolicies
$
I.INTRODUCTION
1.Cheapcoalavailable ontheworldmarketprovides animportant
stimulusfortheconsumption ofcoalinsteadofoilintheCommunity /
particularly byelectricity producers.Likewise,thepriceofcoking
coalandcokeisanimportant factorinthecompetitiveness ofthe
Community'ssteelindustry,and"theneedtoobtaintheseatlowest
costcompatible withsecurity ofsupplyconsiderations is,therefore ,
paramount .
2mTableAintheAnnextracesthedevelopment ofcoalimportsintothe
MemberStatesduringthepast5yearsunderdifferent angles.
TheCommunity'slargestcoalimporters areFranceandItaly.Themajor
coalsuppliers in1978werePolandandSouthAfrica.Thesteepincrease
intheCommunity'scoalimports wascausedbytheriseinsteamcoal
imports.
II.NATIONAL IMPORTPOLICIES ^
ι
3.TheECSCTreatyprovides thatintheeventofacoalshortage,the
Community'scoalproduction isallocated toallcoalconsumers inthe
Community onaneven-handed basis(Article 59).Therearenocounter­
vailingobligations onconsumers withregardtocoalimportedintothe
Community insuchgreatlyincreased quantities orundersuchconditions
astocausesubstantial injurytoCommunity coalproducers.
""TheECSCTreatydoesnotprovideforacommontradepolicyincoaland
steel.Nevertheless ,theChapter X'ofthatTreatyempowertheCommission
totake,undercertaincircumstances ,actioninthetradepolicyfield,
-andtoIssuerecommendations ,totheMemberStates'• '

Uptonow,nosuchactionshavebeentakenonCommunity Level;thediffe
rentrulesrelatingtoimportsofcoalfromthirdcountries arenational
policies.Thefollowinglistillustrates thevariousnationalconcepts
regarding coalimports".
/ '
Belgium :Irrf.^rtsaresubjecttovariablelicensing .
«
»
Germany:Duty-free importsofupto5.5mtperannumpermitted in
principle,subjecttoadministrative licensing.Thisquotaisopenmainly
tosteamcoalquality.Importsarerestricted totheNorthGerman
region.
France:.Subjecttoimportlicences andhandling byagovernment
sponsored importagency(ATIC),'the policyhasbeentoimport?ro*.thirc
countries thequantities requiredafterensuringdisposal ofthe»
government-planned levelofindigenous production andofanysupplies
negotiated fordeliveries fromotherCommunity countries.
UnitedKingdom :Theoretically unrestricted under"opengenerallicence"
butpressure onthes'tate-owned steelandelectricity generating indus­
triesrestricts importstocoalofspecialqualities notreadilyobtain­
ablefromindigenous sources.TheUnitedKingdomGovernment hasnow
notifiedtotheCommission itsintention torestrict bylicensing the
importpfcokingcoalfromthirdcountries.
Denmark,Ireland,Italy,Luxembourg ,Netherlands :Donotrestrict
imports.
* •
♦ .
TheonlyCommunity measuresdirectly bearingonimportsfromthird
countries onwhichagreement hassofarbeenachieved between Member
Statesconcernthetransmission ofstatistical dat3aboutcokingcoal
importsforblast-furnace useandsteamcoaldestinedforpowerstations
TheirpurposeistoenabletheCommission closelytofollowmarket
developments .

-3-
CHAPTER II
Thesituation anddevelopments ontheworldcoalmarket
I.THESITUATION ONTHEINTERNATIONAL COALMARKET
6aOnlyasmallproportion ofworldcoalproduction issoldthrough
foreigntrade.In1977thisfigurewasaround200milliontonnes
outoftotalcoalproduction of2,500milliontonnes#Approximately
138milliontonnesor5.5%ofworldproduction onlyweresupplied via
1theworldmarketproper,ofwhich90milliontonneswereaccounted
forbycokingcoal.Themajorpartofproduction issoldwithinthe
producing countries.Fewcountries onlyexportmorethantheyuse
themselves .
7.Thestructure oftheworldcoalmarketin1977isoutlined inTableB
intheAnnex.
In1977theCommunity tookathird(46milliontonnes)ofallworld
marketsupplies,thesecondlargestimporterafterJapan.
8.Geological miningconditions aregenerally betterinthemajorcoal
exporting countries thanintheCommunity .Thispartlyaccounts for
thefactthatworldmarketpricesforsteamcoal(CIFEuropeapproxi­
matelyt35pertonne)andforcokingcoal(CIFEuropearoundt63per
tonne)arelowerthancoalproduction costsintheCommunity.
II.FUTURE DEVELOPMENTS ONTHEINTERNATIONAL COALMARKET
A.Demand
»
9.Demandontheworldmarketiscertaintoriseinthefuture.General
economic expansion andtheconcomitant riseinenergydemandwilllead
toanincrease indemandontheworldmarket.Production costsforcoal
soldontheworldmarketarelow,particularly forsteamcoalwhose
production costsaremuchlowerthantheworldmarketpricesforoil.
1Foreigntradeafterdeduction ofintra-Community trade,internal COMECON
tradeandUSAsuppliestoCanada.

10.Anyincreases inproduction costsforworldmarketcoalinthefuture
willundoubtedly haverepercussions onworldmarketprices#Prices "will,
however,riseifdemandontheworldmarketrisesmorequicklythan
supply.Thismightwellbethecaseiftheroleofnuclearenergyisless
important thanenvisaged sofarandifthetechnical processes ofcoal
gasification orliquefaction becomecommercially exploitable#
11.ItcanbeassumedthatpapanandWesternEuropewillcontinue inthe
futuretodominatethepatternofdemandontheworldmarket,importing
additional quantities ofpower-station coalinparticular# Demandfor
cokingcoalwillriseless,sharply ontheworldmarket,increasingly
shifting,geographically ,tothenewsteelproduction centres.High-
qualitycokingcoalwill,however,remaininshortsupply.
*
Demandforworldmarketcoalinsmallerindustrialized andanumberof
developing countries islikelytorisemoresteeply,inpercentage terms,
thanthatofJapanandWesternEurope.However,inviewofthemininal
absolute amountsinvolved,therewillbelittlechangeinthepresent
structure ofdemandontheworldmarket.
12.According tonational government forecasts,theCommunity'snetcoal
importswillrisetoapproximately 80milliontonnesby1990.The
Commission'sinitialenergysupplyscenarios fortheyear2000point
toafurthersubstantial increase intheCommunity'simportrequirements .
ι
AspecialreportoncoalbytheECSCConsultative Committee assumes
thattheECcoalmarketwillgrowto450-600millionteein2000of
which200-300milliontonneswouldhavetobeimported fromthird
countries.

-5-
B.Supply
13.Anumberofdifferent typesofstudyhavebeencarriedoutrecently
bydifferent bodiesthroughout theworldintothepossible development
ofworldcoalproduction andworldmarketsupplies uptotheendof
thiscentury.Thefindings ofthesestudies canonlybesummarized
verygenerally inthisreport.
Worldcoalproduction estimates fortheyear2000rangebetweentwo
alternatives <5or6,000milliontee).Thedifferences betweenthe
twosetsofresultsaremainlyattributable todifferent assumptions
regarding economic growth,realpricelevelsforenergy,theadvance
whichwillbemadebynuclearenergyandtheintensity ofcoalpolicy
strategytopromotetheuseofcoaltoreplaceoil.
14.Thestudiesallconcuronthefollowing pointswithregardtocoal
supply :
<a)Thethreemajorcoal-producing countries,theUSA,USSRandChina,
(approximately 60%ofpresentworldcoalproduction )willprovide
thebullcofadditional production butwillalsousealargeshare
tomeettheirownneeds.However,assumingthatthereisnochange
intheproportion oftheirproduction available forexportsthe
USAandUSSRwouldprovide agrowingvolumeofcoalfortheworld
market.Furthermore Chinamaybecomeamedium-sized worldsupplier.
(b)Coalproduction willbesteppedupinthecoal-producing countries
oftheEasternBlock.ButPoland'ssuppliestotheworldmarket
arelikelytoriseonlytoamodestextent.
ι
(c)Withinthegroupofmorerecentworldmarketsuppliers,Australia's
production willexperience thehighestrise,themajorshareof
whichwillbeexported.Increased production inCanadaandSouth
Africaisnotexpectedtobeasexport-orientated .
i
Coalandlignite

-6-
(d)Agroupofnewcomers (India,Columbia/etc.)willbolsterthe
supplyoftraditional worldmarketsuppliers inthemediumterm,
particularly thatofsteamcoal.
15.Theseestimates couldbesummerized ,insimplified terms,bythe
following twoalternatives :
1.Coalproduction (incl.lignite)
in1,000mtee
Westernindustrialized countries
Developing countries
State-trading countries
Total
2.Worldmarketsupplies inmtee
Ontheseassumptions theCommunity shouldalsobeabletobuyalarger
volumeofcoalontheworldmarketinthelongterm.IftheCommunity's
shareofimportsinworldtraderemainsunchanged,inpercentage terms,
importswillrange-instrictlyarithmetical terms-between 115and
230miIliontee.
16.Intheseestimates wehaveassumedthattherearesufficient coal
reserves intheworld.Geological miningconditions inthenon-Commu-
nitycountries mentioned makeproduction cheap;alargenumberofdepo­
sitsareconveniently placednearthecoastforexport.Theprobable
realriseinoilpricescausedbyshortage ofsupplywillspurinvest­
mentinexpanding production capacity.Furtherdelaysorrisesinthe
costsofdeveloping nuclearenergywouldbefurtherincentives .The
transport andhandlingcapacities ofthemajority oftheexporting
countries arebeingexpanded andmaybefurtherextended bytheend
ofthecentury.TheCommunity'spresentportcapacity shouldbeable
tocopewiththeexpected 100%riseincoalimportsby1990.
1Ofwhichhardcoalproduction :Westernindustrialized countries 0.9?
Developing countries 0.28
State-trading countries 1.281977 2000
II
1.0
0.3
1.5
2.8
1401■1.7
0.6
2.7
5.0
3502.4
0.7
2.9
6.0
700
Total 2.53

-7-
17.Problems mayarisewiththeincreaseinproduction andexportsdescribed,
iftheincrease insupplyisprovided mainlybytheWesternindustria­
lizedcoal-producing countries.IntheUSA,forexample,whichisof
specialimportance here,therelatively wide-spread environmental
consciousness willhinderarapidincrease incoalproduction and
consumption *Infrastructure wouldalsohavetobeexpandedtocopewith
amajorriseinexports.
C.Conclusions
18.itisgenerally acceptedthatcoalmustmakeagrowingcontribution
totheprimaryenergyrequirements oftheCommunity inthecoming v
decades. '' '
Coalconsumption maydoublebytheyear2000anditiscertainthat
imported coalwillplayanincreasingly important role.However,
quantitative forecasts havefrequently provederroneous inthelight
ofunforeseen political andeconomic events.:
Notwithstanding vastandcheaplyrecoverable reserves ofhardcoalin
overseas countries andthepotential forgreatlyexpandedproduction
insomeofthese,itcannotberuledoutthatvariousconstraints may
impederapiddevelopment oftheinternational coalmarket.Risingdemand
duetoslowernuclearexpansion ortoashortfalt inoilmayconvert
thepresentbuyer'smarketforcoalintoaseller'smarket.Asa
consequence ,thepresentgapbetweenworldmarketpricesandCommunity
production costsforcoalmaynarrow.
Furthermore ,coalproducers inexporting countries mayfaceobstacles
suchasenvironmental legislation ,inadequate transport facilities or
shortages oftrained manpower.Asaresult,theworldmarketforcoal
mayprovelessreliable thanitappearstoday.
Inanycase,forthesakeofsecureenergysupplies,theCommunity must,
pursueadualpolicywithregardtocoal.Ontheonehand,itmust
maintain asubstantial andeconomically viablecoalindustrytoavoid
stillgreaterdependence onimported energy.Ontheother,reliable
traderelations withavarietyofcoal-exporting countries mustbe
developed tomeetgrowinglong-term requirements forcoal.

TableA
BREAKDOWN OPCOMMUNITY COALIMPORTS
(milliontonnes}tat)
A.Byimporting countries
1974 1975 1976 1977 1978
IBelgium 4.3 2.4 3.5 3.2 2.7
Denmark 3.5 4.1 4.2 4.6 5.0
IGermany 4.8 5.8 5.4 5.6 5.7
Prance 8.8,10.9 13.8 15.5 15.7
IIreland 0.7- 0.5 0.5 0.7 0.7
Italy 9.3 9.6 10.0 10.3 9.6
ILuxembourg 0.1 0.1 0.1
INetherlands 3.0 2.8 3.8 3.8 3.4
UnitedKingdom 3.4 5.0 2.6 2.1 2.0
ICommunity 38.0 41.2 43.9 46.0 44.9
B.,Bymajorexporting countries
IUSA 12.8 13.8 14.2 10.7 7.6I
IPoland 15.2 14.6 16.0 14.8 14.9
IAustralia 3.8 5.8 4.5 6.7 6.7
ISouthAfrica 1.2 1.6 3.5 7.8 10.5
USSR 4.1 3.7 4.1 4.2 3.2
IOther 0.9L_^Z 1.6|1,8 2.0
ITotal 38.0 41.2 43.9.46.0 44.9
C.Bytypesofcoal
l
!Steamcoal 14.4 20.0 20.0 24.2 I24.3 I
1Cokingcoal 19.4 .17.8 19.9 17.5 17.1
IOther 4.2 ■3.4 4.° 4.3
ITotal 38.0 41.2 43.9 46.0 44.9

TableB
.y.ir>c':
STRUCTURE OPTHEWORLDCOALMARKET IN1977
(milliontonnes)
Majorexporting countries Majorimportingcountries J
USA 33.7 Japan 60.8
Australia 35.5 Community 46.0
IPoland 22.1 Finland 4.3
USSR 13.2 Spain 3.9
ISouthAfrica 12.7 Brazil 3.5
IOther 21.0 IOther 19.7
Total138.2|_138.2I
Foreigntradeafterdeduction ofintra-Commxmity trade,internal COMECONtrade
andUSAsuppliestoCanada