WRITTEN QUESTION E-1505/97 by Guido Podestà (UPE) to the Commission (30 April 1997)

Subject: Coal

At the Fifth Euracom Conference on the future of coal - held in Strasbourg on 17 February 1995 in connection with the Union's energy policy guidelines - the Member of the Commission responsible for energy, Mr Christos Papoutsis, declared that:

Solid fuel is obviously at an advantage in terms of competitiveness and security of supply and is the most abundant and competitive source of energy available.

All the economic indicators, however, reveal that the Member States are engaged in an alarming intensive race to cut the use of coal for electricity generation, a trend which runs blatantly counter to the decisions being taken by the leading non-European countries.

The current energy policies of the Member States are neglecting coal and giving priority instead to more expensive and less plentiful resources, i.e. both as regards the known reserves which can be tapped by means of existing technologies and as regards their geographical spread.

The result is a downright waste of energy. Yet economic considerations are not the only points to make, for solid fuels constitute better competitive resources where security of supply and environmental protection are concerned, not least by virtue of the technological advances in extraction and processing.

In the light of the foregoing, can the Commission therefore say whether its energy policy standpoint has shifted away from the views of Mr Papoutsis referred to above? If that is not the case, does it not think that it should call on the Member States to interpret energy policies more accurately and propose guidelines and modes of behaviour consistent with Mr Papoutsis's comments, with a view to encouraging greater exploitation of the most advantageous energy sources such as coal and thus to achieving the economically most appropriate energy mix for each Member State?

Answer given by Mr Papoutsis on behalf of the Commission (13 June 1997)

The extract from the speech to which the Honourable Member refers brings out some characteristics of the world coal industry. The Commission considers that coal has intrinsic qualities in terms of world reserves, security of supply, production cost and price stability in relation to competing fossil fuels.

Solid fuels - hard coal and lignite - represent the most abundant fossil energy resources (230 years of exploitable reserves) and the best distributed over the planet in geographic and geopolitical terms. The international coal market therefore has stable prices that are the most competitive compared with the other fossil fuels.

In the Community the role of solid fuels - present or future - is certainly linked in part to the abovementioned characteristics of the world coal supply. In fact the Community imports half of its coal needs ((In 1996 the Community imported 130 million t of the 272 million t delivered. )). The context of European coal supply, which cannot be avoided, is quite different. The restructuring and mine closures that have gone on since the sixties have changed conditions on the European market. Thus, Europe of the 12 has gone from a coal production of about 600 million tonnes at the time of signature of the ECSC Treaty to less than 130 million t now. On the other hand, European lignite supply for which the industry has undergone a development similar to that for coal today presents characteristics close to those mentioned with regard to world coal supply.

However, and in spite of the persistent economic difficulties of a major part of the Community's production in the sector (lack of competitiveness, subsidies and social problems), abandonment of solid fuels is not on the agenda. In 1996 the Community consumed 272 million t of hard coal and 258 million t of lignite, almost two-thirds of which are intended for the electrical industry.

Solid fuels are used for generating more than a third (34%) of the Community's electricity. This percentage hides considerable disparities between the Member States. In Denmark coal produces 87.5% ((Eurostat data, 1993. )) of the country's electricity, in Luxembourg it has disappeared, while in Greece 71% of the electricity is generated by means of lignite.

In the future, the Community demand for coal will be determined by numerous factors independent of a possibly 'voluntarist' policy in the matter - as the Honourable Member seems to be suggesting - whether we are talking about general energy factors such as energy and electricity demand or the impact of horizontal policies such as tax and environment policy.

European energy policy, as defined in the Commission's White Paper ((Commission White Paper on an energy policy for the European Union, COM(95) 682 final. )), is centred in particular around notions of competitiveness, security of supply and protection of the environment. In this respect the Commission is conducting a dual policy:

- a policy of authorising support by the Member States for European hard coal production. In 1996 it authorised aid amounting to more than ECU 6 000 million, notified by the Member States;

- a policy in favour of a coal technology (extraction and combustion) appropriate to the requirements of our time and especially to environmental requirements, through research programmes (ECSC research and Thermie) and technology dissemination programmes (Thermie).

These coordinated and complementary actions must enable energy consumers and, primarily, electricity producers, to make a more effective choice between the different fossil fuels.