No C 205/8 Official Journal of the European Communities 9. 8. 82 
Opinion on the communications from the Commission to the Council on the development of an 
energy strategy for the Community and energy pricing — policy and transparency 
A. LEGAL BASIS FOR THE OPINION 
At its 193rd plenary session held on 15 and 16 December 1981 the Committee, acting on a 
proposal from the Bureau, decided to deliver an opinion on the abovementioned subject on its 
own initiative. 
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 communications from the 
Commission to the Council dealing respectively with the 
'Development of an energy strategy for the Community' 
and with 'Energy pricing - policy and transparency', 
Having regard to the Bureau's decision of 14 December 
1981 instructing the Section for Energy and Nuclear 
Questions to draw up an own-initiative opinion on the 
subjects treated in these communications, 
Having regard to the opinion adopted by the 
above-named Section at its 70th meeting, held on 7 May 
1982, 
Having regard to the oral report made by the rapporteur, 
Mr Zunkler, at the meeting of the Section for Energy and 
Nuclear Questions held on 7 May 1982, 
Having regard to the discussions during its 198th plenary 
session held on 26 and 27 May 1982, 
HAS ADOPTED THE FOLLOWING OPINION 
by 71 votes to 28, with 10 abstentions: 
1. Introduction 
1.1. The two documents which have been submitted 
are a logical continuation of the energy strategy pursued 
by the Community after the first energy crisis. This 
strategy originated in the resolution adopted by the EC 
Council in September 1974, which sought to reduce 
dependence on oil in particular by a more rational use of 
energy, energy savings and greater diversification of 
supplies, without, however, thereby jeopardizing 
economic growth and social progress in the 
Community. 
The Commission has in the past already proposed a large 
number of concrete measures for achieving the 
abovementioned aims. The majority of these proposals 
were approved by the Economic and Social Committee. 
Mention should also be made of the Report entitled: in favour of an energy-efficient society' (Saint-Geours 
Report) and the annual reports which document, analyze 
and compare the effects of the Community's energy policy 
in the individual Member States. 
The Third Report on the Community's Programme for 
Energy Saving contains an outline energy programme 
which is recommended to all Member States. This outline 
programme was subsequently recommended by the 
Commission to the Council as part of the former's 
communication entitled: 'New lines of action by the 
European Community in the field of energy saving'. The 
importance of this programme for the Community's 
energy policy was stressed by the Economic and Social 
Committee in its opinion on the lines of action, which was 
adopted unanimously on 31 January 1980 (OJ No C 113 
of 7 May 1980). 
The abovementioned communication was followed by 
communications from the Commission to the Council on 
the energy-policy,objectives of the Community for 1990, 
convergence between the policies pursued by the 
individual Member States and Member States' investment 
programmes. All these communications were approved 
by a majority of the Committee's members and were 
subsequently embodied in the Council resolutions of May 
1980. 
1.2. On the basis of the abovementioned resolutions 
of May 1980 on the Community's energy-policy 
objectives for 1990 and convergence between the policies 
pursued by the individual Member States, the 
Commission published a report on 20 October 1981 
entitled: 'The development of an energy strategy for the 
Community'. The report took the form of a 
communication to the Council. 
Because of the special importance of pricing in a 
long-term energy stragegy, the Commission drew up - as 
the first of a number of proposals on individual aspects of 
energy policy - a separate communication to the Council 
entitled: 'Energy pricing - policy and transparency', 
incorporating a draft Council resolution (13 October 
1981). 
The following opinion refers to these two documents. 
9. 8. 82 Official Journal of the European Communities No C 205/9 
1.3. In its communication on energy strategy the 
Commission notes that, although there is agreement on 
the guidelines for future energy policy, 'it has not led to 
the implementation of an overall strategy comprising 
action by the Community, Member States and producers 
and consumers'. 
In order to tackle this deficiency steps should, in the 
Commission's view, be taken, in particular, to achieve a 
more rapid convergence of national energy policies; the 
Commission assumes that it must be in the interests of all 
the Member States that energy policy should have the 
same impact throughout the Community. 
The Commission also considers that there is a need for 
specific Community action 'where this is required by the 
provisions of the Treaty or where it will be more effective 
than the sum of national measures even when these are 
properly coordinated'. 
In the Commission's view there are five main priorities for 
Community action: 
(a) ensuring an adequate level of investment both in 
alternatives to oil and in the more rational use of 
energy; 
(b) the development of a common approach to energy 
pricing and taxation; 
(c) the establishment of measures of Community 
solidarity to avoid instability on the markets; 
(d) the reinforcement of common policies in the fields of 
research, development and technological 
demonstration; 
(e) the further development of common approaches and 
initiatives in external energy relations. 
2. General comments 
2.1. The Committee has examined both documents 
carefully and thinks that - in conjunction with the other 
communications on energy policy matters - they provide 
a useful summary of the various proposals already 
produced by the Commission. 
In common with other bodies that have considered the 
documents, the Committee observes that the priorities 
fixed meet with general approval, but it is of the opinion 
that a series of individual points in the documents need to 
be checked to ensure that they are mutually consistent and 
fit in with other Commission proposals. 
2.2. As regards the general objective of the energy 
strategy, the Committee reiterates its view that everything 
must be done in the Community bodies to further speed 
up the necessary convergence of national efforts in the 
area of energy supplies. To this end, it is certainly necessary to improve and, 
above all, harmonize the flow of information between the 
Member States and the Commission. In the Committee's 
view, however, there is a more important need, namely 
coordination of energy policy and medium- and 
long-term economic and social policy as a matter of 
priority (already referred to in an opinion - OJ No C 113 
of 7 May 1980). Only when this has been achieved can, in 
the Committee's opinion, a consistent energy strategy be 
fully effective. In this connection, the Committee notes 
with satisfaction that the Commission does not intend to 
infer a need for a new supervisory interventionism in the 
energy sector. 
2.3. The Committee agrees with the Commission's 
forecast of the future supply situation in the Community 
and the contributions that each of the primary energy 
sources will have to make for the security of future 
supplies. The Committee would, however, make the 
stipulation that the energy supply situation and the 
opportunities for saving energy must not be the only 
determining factors; consideration must also be given to 
the social aspects, such as the creation of jobs and the 
protection of the environment, as well as the 
requirements of industry and private households. The 
Committee refers in this connection to the findings of the 
Saint-Geours Report commissioned by the Commission, 
which dealt with not only economic and energy aspects 
but also the entire social and cultural spectrum in the 
Community. 
3. Specific comments (on the priorities) 
3.1. Investments 
The Committee has already dealt with this matter in 
considerable depth in connection with the opinion of 
24 September 1981 (OJ No C 310 of 30 November 
1981). However, it is so important that the problems in 
this field be pinpointed and resolved that the Committee 
would like to recapitulate its views on the matter: 
— The Committee agrees with the Commission's 
observation that investment in energy projects in the 
majority of the Member States is impeded by 
misgivings among the public - and also by legal 
uncertainties in the environmental protection 
legislation of some Member States regarding 
authorization for the construction and operation of 
new plants. It proposes that the Commission should, 
despite all the difficulties standing in its way, take the 
initiative in drawing up, in conjunction with the 
Member States, as uniform as possible outline 
conditions for authorization procedures in the field of 
energy supplies. 
— The Committee reiterates its view that public 
misgivings cannot be disregarded, but should only be 
expressed within the limits set by the rule of law. 
NoC 205/10 Official Journal of the European Communities 9. 8. 82 
— The Committee welcomes the initiative envisaged by 
the Commission for informing the public not only of 
the potential uses of the various sources of energy but 
also for the risks involved. This should be done on the 
basis of both environmental and profitability 
considerations. 
— The current standstill or even decrease in energy 
prices must not lead to a continuing wait-and-see 
attitude regarding energy conservation, the more 
rational use of energy and the substitution of other 
energy sources for oil with its political uncertainties -
rather, special efforts in the energy-policy field are 
needed to overcome the wait-and-see attitude. The 
Commission should put forward concrete proposals 
to this end as soon as possible, so that the Community 
will not become more dependent on oil again when 
there is an economic recovery. 
— In this context the Committee would once again point 
out that if consumers are to have a secure and 
reasonably-priced supply of energy, it must be 
possible, in addition to the measures listed above, to 
site energy generating plant in accordance with 
demand. This applies in particular to the 
capital-intensive forms of energy that are tied to 
transmission networks, namely electricity and remote 
heating. 
3.2. Prices and taxation 
3.2.1. The Committee is pleased to note that the 
Commission and the Council attach special importance to 
energy pricing policy in the Community's energy strategy. 
Price and tax policy plays an important role of course, but 
it is by no means the sole or decisive factor. It is at least 
equally important that substitutes for oil be made 
effectively available in sufficient quantity and above all 
that there be sufficient willingness to invest in 
substitution. 
As already pointed out in previous opinions, and most 
recently in the opinion published in OJ No C 113 of 
7 May 1980, the Committee basically welcomes the 
Commission's attempts to further align national pricing 
and tax policies; nevertheless, the Committee foresees 
difficulties in implementing the proposed measures. After 
all, pricing policy is a highly complex problem with 
disparate, conflicting elements. Basically it is a specific 
aspect of overall economic and social policy. In the 
Committee's view, therefore, satisfactory coordination in 
the energy sector cannot be achieved independently of a 
general alignment of national economic and social 
policies. 
3.2.2. As regards the principles governing pricing, the 
Committee agrees with the Commission that: 
— consumer prices must allow adequate investment in 
energy supply and induce industrial and private consumers to use energy efficiently, hence consumer 
prices must not be kept at an artificially low level, 
— differences in energy prices (before taxes) within the 
Community are considered to be warranted in so far 
as they are due to competitive advantages, e.g. 
foresighted investment in new technology, 
— one must reject price differences not justified by such 
factors, particularly those caused by different levels of 
taxation, in so far as these are not necessary in order 
to make sufficiently clear the different degrees of 
shortage of the primary energy sources. 
The Comittee is, however, critical of the fact that the 
Commission's basic demands seem to conflict in part with 
the Council's statements and that in practice it will hardly 
be possible to find a common denominator. How are the 
following demands to be achieved sumultaneously when 
the market price of oil, which, viewed in the long term, is 
a scarce and expensive commodity, suggests a surplus as 
at present? And can concrete inferences really be drawn 
for practical pricing policy when the following demands 
are made at the same time: 
— 'consumer prices should reflect representative 
conditions on world markets, taking into account 
long-term trends' (Council press release ot 
3 December 1981, point 2), 
— '. . . ensuring that prices genuinely reflect. . . market 
conditions', 
— 'consumer prices must permit an adequate level of 
investment in energy supply and encourage energy 
efficiency' (Council press release of 3 December 
1981, point 2.1), 
— 'prices should provide reliable market signals on the 
price of energy relative to those for other goods and 
services', 
— 'differences in pre-tax energy prices within the 
Community may arise from the existence of a genuine 
competitive advantage (arising for example from 
favourable location, prudent investment, superior 
productivity or specific market conditions) or 
alternatively from the existence of priorities 
consistent with the Community's own energy 
objectives, in particular the objective of reduced 
dependence on oil' (Council press release of 
3 December 1981, point 2.2)? 
The Committee hopes that further clarification and 
information will be provided in the supplementary 
Commission report which the Council has called for by 
9. 8. 82 Official Journal of the European Communities NoC 205/11 
the end of February 1982. A stand should also be taken on 
the question whether energy prices for private 
househoulds should take account of social considerations 
or whether - "and this is the Committee's view - this task 
should, as in other spheres, be assigned to general tax or 
social policy, which if necessary should encourage 
investment in energy-saving appliances and assist 
low-income groups. 
3.2.3. The Committee reiterates its misgivings about 
the use of fiscal measures to influence energy decisions; 
such measures can easily lead to distortions of 
competition, increased inflation and serious 
disadvantages for particular groups of consumers - both 
private and industrial; this must be avoided at all 
events. 
As already indicated, additional fiscal measures may be 
justified in so far as they are necessary in order to 
emphasize the different degrees of shortage of the 
individual primary energy sources. So as to limit the 
resultant extra burden and to prevent governments from 
regarding such taxes as an additional general source of 
revenue it would be desirable for the proceeds to be 
devoted specifically to the same energy policy aims, 
namely energy saving and replacement of oil, for example 
in the form of aid for investment in conversion to solid 
fuels. 
The Committee would like to see every Member State 
review its energy tax system to ascertain whether the 
taxes, some of which were introduced a long time ago for 
specific purposes - almost without exception to provide 
new sources of revenue for the national budget - are still 
justifiable and consistent in the light of present day energy 
strategy objectives. 
The Community would have to help in this review by 
providing the Member States with the comprehensive 
comparative analyses and criteria needed for any 
adjustments. 
3.2.4. The Committee would underline the call by the 
Council and the Commission for greater transparency in 
energy prices. Industrial and private consumers must 
receive the market information they need in order to make 
their own decisions. The Committee can also understand 
the counter-arguments of those who see this as a possible 
breach of the confidentiality of major bilateral contracts; 
this can often do more harm than good in the endeavours 
to arrive at competitive prices. The Committee therefore 
feels that transparency should not go beyond what is 
necessary in order to implement a Community energy 
strategy. 
For these reasons the Committee cannot go along with the 
Commission's claim that a Community energy strategy 
will require special arrangements with a view to complete 
transparency at Community level so as to ensure that the 
Community's rules on competition and the agreed energy 
pricing principles are observed. In this respect the Committee considers that market information should not 
become an end in itself. 
3.3. Instability on the markets 
The Committee has fundamental objections to the 
introduction of a set of interventionist instruments to deal 
with even limited supply shortfalls. For serious supply 
difficulties there is already intervention machinery (1EA, 
Article 59 of the ECSC Treaty), as the Commission has 
recognized. In this connection it must, however, be 
pointed out that such a set of instruments can be 
effectively used only if it is backed up by a sufficiently 
large potential; the Committee considers that the 
Community must therefore cooperate closely in this 
sphere with the other leading industrialized countries. 
For the rest, the Committee hopes that the other 
Commission proposals on energy matters (a 
communication has already been issued on the effects of a 
limited oil shortage, on which the Committee is to deliver 
a separate opinion) will be more specific in their 
statements and in the list of required measures. 
3.4. Research and development 
As has already been indicated in previous opinions 
(OJNoC 113of7Mayl980andOJNoC 138of9June 
1981), the Committee welcomes the Commission's 
initiative in this area as a necessary component of the 
energy strategy. The large degree of dependence on oil 
with its political uncertainties and the generally limited 
reserves of primary energy sources call for the immediate 
adoption of comprehensive and coherent research and 
demonstration programmes to promote new 
energy-saving technologies. A lot can be done in this area, 
but not without making a greater persuasive impact and 
above all allocating considerable public funds. 
Support should therefore be given not only to research 
and development in the narrower sense but also to those 
projects which genuinely have the character of a 
demonstration and hence serve to disseminate the results 
of research. But so that resources are used sparingly and 
efficiently, support should not be extended in areas which 
could be covered by the commercial interest of industry. 
The Committee considers that otherwise there will be a 
danger of distortions of competition, which would be 
incompatible with a coherent energy policy. Support 
should also as far as possible be given to concrete projects 
that can be implemented in the short term. Although 
research on the gasification and liquefaction of solid fuels 
must be of particular importance in the long term, this 
should not obscure the fact that there are more immediate 
research subjects where economic feasibility has been 
established beyond question but where technical 
perfection has yet to be achieved. Examples are 
improvements to boilers and their control systems, firing 
systems and the use of pulverized coal, for example in the 
steel industry. 
No C 205/12 Official Journal of the European Communities 9. 8. 82 
The Committee notes that it is difficult to find objective, 
coherent criteria for deciding whether government 
support in necessary or not in a given case, but considers 
that it would be useful to define such criteria. The 
Committee therefore regrets that, here too, the 
Commission has expressed itself in too general terms and 
has still not put forward any concrete suggestions in this 
area. 
For the rest, the Committee would refer to its earlier 
opinions on this subject. 
3.5. External relations 
Relations with third countries in the energy sphere are to 
be viewed in the overall context of the Community's 
external relations. The Economic and Social Committee 
drew up a study entitled: 'The EEC's external relations -
stocktaking and consistency of action' (rapporteur: Aldo 
Romoli) in January 1982 and this has been sent to the 
council and the Commission. There is therefore no need 
to comment on this subject in any detail, particularly 
since the Commission has not put forward any concrete 
proposals in the strategy paper. 
The Committee stresses the importance attached by the 
Commission to coordination of Community moves 
vis-a-vis third countries, particularly in the energy sphere. 
The Committee notes with great concern that, although 
there is basic agreement on the broad lines of a 
Community external policy, this policy is in practice 
being undermined by bilateral action, such as that in 
connection with the latest negotiations with the Soviet 
Union on an increase in natural gas imports. 
Done at Brussels, 26 May 1982. The Committee wonders, however, whether the series of 
measures proposed by the Commission for dealing with 
the shortcomings indicated — involving priority for a 
Community approach in the area of external trade - is 
appropriate, or whether one should not first of all 
ascertain how far the individual Member States are 
seriously prepared to transfer external trade activities to 
Community bodies. 
For the rest, the Committee takes the view that 
coordinated action by Community enterprises is 
preferable to regimented initiatives, since these would 
probably be too cumbersome as a result of additional 
coordination machinery. 
As regards cooperation with the developing countries, the 
Committee would point to the special importance to be 
attached, in the context of development aid, to the 
investments that industrialized-country firms make in the 
raw materials and energy sectors (e.g. solar energy) in the 
Third World. These investments not only provide an 
excellent starting point for industrial development in the 
Third World but also form a good basis for a lasting trade 
relationship. 
In this connection the Committee would refer to its earlier 
opinion on technology transfer in the developing 
countries and its call for an energy programme in this 
field. It would like to see appropriate proposals put 
forward at the next summit conference of the 
industrialized nations in Versailles. 
The Chairman 
of the 
Economic and Social Committee 
Tomas ROSEINGRAVE