WRITTEN QUESTION P-0850/96 by Elisabeth Schroedter (V) to the Commission (2 April 1996)

Subject: Competitive advantages for the lignite industry and the power-supply industry in the new German Länder

1. Is the Commission aware that the German federal government, collaborating with the new Länder governments concerned in talks designed to reach a consensus on the energy sector in eastern Germany, has concluded contractual agreements with undertakings that have interests in the eastern German lignite mining and power-supply industries, which could give lignite artificial competitive advantages as an energy source?

2. To what extent is this compatible with the European Union's competition rules?

3. Does the European Energy Charter allow a government to impose contractual obligations requiring an undertaking to discount some of its prices?

4. Do the European competition rules permit a government to suspend its obligation to implement the Community's environmental policy for the benefit of individual undertakings and thereby give those undertakings an opportunity to improve their market position?

5. If not, what is the Commission going to do about the lignite industry in eastern Germany, which can hold its costs down because its mining operations were not required to meet conditions that would have been imposed had the legally required environmental impact assessment been carried out?

Answer given by Mr Van Miert on behalf of the Commission (8 May 1996)

1. The purpose of the contractual agreements concluded during the 'consensus talks' on energy in the new Länder is to prevent electricity prices there from rising substantially above those elsewhere in Germany as a result of the huge costs involved in upgrading and modernizing supply networks and power stations. Lignite's role in electricity generation is covered by those agreements.

2. Since it has not been notified of the agreements in accordance with Article 93(3) of the EC Treaty, the Commission has not yet examined whether they are compatible with the rules on competition. It will raise the matter with the German authorities.

3. The European energy charter is designed to coordinate relations between energy suppliers and electricity users, with particular attention to reliability of supply. The agreements referred to by the Honourable Member are not prohibited under the charter.

4. Although restructuring the lignite industry in the new Länder presents Germany with a major challenge, it will also result in significant environmental benefits. Annual expenditure on cleaning up and rehabilitating old lignite workings currently amounts to DM 1 500 million. Modern, efficient power stations of which the environmental impact has been assessed - such as the Schwarze Pumpe station - are being built. The second assessment report on national programmes for monitoring CO2 emissions in the Community noted that one of the main reasons why they fell by 2,2% between 1990 and 1993 was that a substantial proportion of eastern Germany's lignite production was discontinued.

5. These developments have been supported by the Commission under the Rechar programme, through aid under Article 56 of the ECSC Treaty to promote workers' reintegration into employment and by way of regional conversion plans (in connection with products covered by the Treaty, such as briquettes and lignite low-temperature coke). The Commission has not approved any additional forms of support that might lead to a reduction in the costs of lignite mining.