2001/162/EC: Commission Decision of 13 December 2000 on the granting by Spain of aid to the coal industry in 2000 (Text with EEA relevance) (notified under document number C(2000) 4190)
Date: 2000-12-13
Institutions: European Commission
Subjects: Spain, State aid, application of EU law, coal industry, control of State aid

L 58/24

EN

Official Journal of the European Communities

28.2.2001

COMMISSION

COMMISSION DECISION

of 13 December 2000

on the granting by Spain of aid to the coal industry in 2000

(notified under document number C(2000) 4190)

(Only the Spanish text is authentic)

(Text with EEA relevance)

(2001/162/ECSC)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

Having regard to the Treaty establishing the European Coal and
Steel Community,

Having regard to Commission Decision No 3632/93/ECSC of
28 December 1993 establishing Community rules for State aid
to the coal industry (1), and in particular Articles 2(1) and 9
thereof,

Whereas:

(b) aid of ESP 55 209 million (EUR 331 812 772,71)
to cover exceptional welfare aid paid to workers
who lose their jobs as a result of the measures to
modernise, rationalise, restructure and reduce the
industry;
activity of the coal

(c) aid of ESP 15 152 million (EUR 91 065 354,06) to
cover the technical costs of closing down mining
installations as a result of the measures to moder-
nise, rationalise, restructure and reduce the activity
of the coal

industry.

(1)

(2)

(3)

(4)

I

(5)

By letter of 5 October 1999, Spain notified the Commis-
sion, pursuant to Article 9(1) of Decision No 3632/93/
ECSC, of the financial support it intended to grant to the
coal industry in 2000. Following Commission requests
in letters dated 11 November 1999 and 7 September
2000, Spain provided additional information in letters
dated 24 July 2000 and 8 November 2000, respectively.

Spain also notified the Commission, by letter dated 7
October 1999, of the production costs per undertaking
for 1998.

In a second letter dated 24 July 2000, Spain notified the
Commission, pursuant to Article 9(2) of Decision No
3632/93/ECSC, of
the amount of aid actually paid
during the 1999 coal production year.

The financial measures proposed by Spain for the coal
industry fall within the provisions of Article 1 of
Decision No 3632/93/ECSC. The Commission must
therefore take a decision on such measures in accord-
ance with Article 9(4) of the Decision. The Commis-
sion's assessment will depend on the compliance of the
measures with the general criteria and objectives laid
down in Article 2 and the specific criteria established by
Articles 3 and 4 of the Decision, and on their compati-
bility with the proper
the common
market. Additionally, in accordance with Article 9(6) of
the Decision,
the Commission when conducting its
assessment must check whether the measures conform
with the modernisation,
restructuring
and activity-reduction plan which the Commission
approved in its Decision No 98/637/ECSC (2).

functioning of

rationalisation,

II

Pursuant to Decision No 3632/93/ECSC, the Commis-
sion must rule on the following financial measures
relating to 2000:

(6)

(a) aid of ESP 116 180 million (EUR 698 255 862,87)
to cover operating losses by coal undertakings;

By Decision 98/637/ECSC the Commission gave an
opinion as to the conformity of the 1998 to 2002 phase
of the plan notified by Spain for the modernisation,
rationalisation, restructuring and activity reduction of
the coal industry with the general and specific objectives
of Decision No 3632/93/ECSC.

(1) OJ L 329, 30.12.1993, p. 12.

(2) OJ L 303, 13.11.1998, p. 57.

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Official Journal of the European Communities

L 58/25

(7)

(8)

(9)

(10)

(11)

(12)

(13)

The Commission has verified that the measures taken to
modernise, rationalise, restructure and reduce activity in
the Spanish coal industry during 1999, and those noti-
fied for 2000, correspond to the plans which it
approved in Decision No 98/637/ECSC.

Spain's coal production of 15 418 272 tonnes in 1999
is 5,5 % lower than the figure for 1998. The forecast
production figure notified by Spain for 2000 is
14 611 728 tonnes,
for
1999. These production figures are lower than those
shown in the Plan.

i.e. 5,25 % lower than that

The number of workers in the undertakings fell from
18 140 at the end of 1998 to 17 345 at the end of
1999. A further reduction of 1 500 workers is forecast
for 2000.

Installations with a
total production capacity of
3 521 121 tonnes per year are in the process of closing
down or reducing their activity, which must take place
before the expiry of Decision No 3632/93/ECSC.

These reductions, which are larger than those initially
envisaged, are due to the inclusion in the closure plans,
in conformity with Article 4 of Decision No 3632/93/
ECSC, of undertakings which were unable to meet the
conditions which would entitle them to operating aid
under Article 3 of the Decision.

By letter of 7 October 1999 Spain notified the Commis-
sion, as required by Commission Decision 1999/451/
ECSC (1) of the undertakings' production costs in 1998.
The Commission's analysis of the trend in the produc-
tion costs of the undertakings or production units in
receipt of operating aid (Article 3 of Decision No 3632/
93/ECSC) revealed a mean reduction in the cost of
production, at 1992 prices,
from ECU 102,5/tce in
1994 to ECU 87,7/tce in 1998. This mean reduction of
16,4 % between 1994 and 1998 breaks down into a
reduction of more than 30 % for 22 % of production,
between 30 % and 20 % for 7 % of production, between
20 % and 10 % for 39 % of production and between
10 % and 0 % for 33 % of production.

The Antracitas de Rengos SA and Inversiones Terrales
SA undertakings, with a total annual production of
90 000 tonnes, closed down their production installa-
tions definitively. The following undertakings or produc-
tion units: Promotora de Minas de Carbón SA, UTE
Terrales-Ubeda, Incomisa, Coto Minero Jove SA, Mina
Escobal SL, Minas de Valdeloso SL, Virgilio Riesco SA,
the María Group of Minero Siderúrgica de Ponferrada
SA, the Escandal Group of Coto Minero del Sil SA, and
the Picardín, Pontedo and Arbas Groups of Uminsa, with
a total annual production capacity of 955 611 tonnes,

(1) OJ L 177, 13.7.1999, p. 27.

have been included by Spain in a closure/activity reduc-
tion plan which provides for a reduction in annual
capacity of 800 000 tonnes in 2000. The Commission
has checked that the conditions laid down in Article 3(2)
of Decision No 3632/93/ECSC cannot be achieved by
these undertakings, which do however qualify for
activity reduction aid in accordance with Article 4 of the
Decision.

(14) During the period 2000 to 2002, Spain will continue to
monitor production cost trends at all coal undertakings
receiving operating aid. Should the latter prove unable
to achieve the downward trend in production costs
stipulated in Article 3(2) of Decision No 3632/93/ECSC,
Spain will propose the requisite corrective measures to
the Commission.

(15)

(16)

(17)

(18)

(19)

The aid notified by Spain to cover operating losses in
2000 provides
for a reduction in production aid
compared with 1999, at current currency values, of 4 %
for underground mines and 6 % for open-cast mines.
These reductions will help achieve the objective of
degression of aid. The aid under Articles 3 and 4 of
Decision No 3632/93/ECSC is intended to cover all or
part of the difference between the production costs and
the selling price freely agreed between the contracting
parties in the light of the conditions prevailing on the
world market.

In accordance with Article 2(2) of Decision No 3632/
93/ECSC, all the aid which Spain plans to grant to the
coal industry under the said Decision in 2000 has been
entered in national, regional or local public budgets. Part
of this aid to Hunosa could be channelled via SEPI
(Sociedad Estatal de Participaciones Industriales).

In view of the above, the measures notified by Spain for
2000 are deemed to be in line with the modernisation,
rationalisation, restructuring and activity-reduction plans
approved by the Commission in its Decision 98/637/
ECSC, provided all
the conditions laid down in the
Decision are complied with, particularly those relating to
between
nondiscrimination
purchasers or between users of coal in the Community.

producers,

between

III

The aid of ESP 116 180 million (EUR 698 255 862,87)
which Spain plans to grant the coal industry in 2000 is
intended to compensate in full or in part for operating
losses sustained by coal undertakings.

is intended to cover

It
the difference between the
production costs and the selling price freely agreed
between the contracting parties in the light of the condi-
tions prevailing on the world market.

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Official Journal of the European Communities

28.2.2001

(20)

(21)

(22)

The sum notified subdivides into operating aid of
ESP 48 696 million
under
Article 3 of Decision No 3632/93/ECSC, and activity
reduction
million
of
(EUR 405 587 008,52) under Article 4 thereof.

(EUR 292 668 864,35)

ESP 67 484

aid

aid

operating

The
ESP 48 696 million
of
(EUR 292 668 864,35) is intended to cover the oper-
ating losses of 42 undertakings with a combined envis-
aged production of 11 088 607 tonnes in 2000.

The Commission notes, after verifying the production
costs of these undertakings, that the downward trend of
production costs at 1992 prices observed in the period
1994-1997 will continue in 2000. The reduction envis-
aged for 2000, compared with 1998, will be 11,23 %.

losses of Antracitas de Guillón, ESP 681 million
(EUR 4 092 892,43)
the operating losses of Coto
Minero Jove SA, ESP 83 million (EUR 498 840,05) the
operating losses of Inversiones Terrales-Plácido Ubeda,
ESP 154 million (EUR 925 558,64) the operating losses
Industrial y Comercial Minera (Incomisa), ESP 52
of
million (EUR 312 526,29) the operating losses of Mina
Escobal, ESP 356 million (EUR 2 139 603,09) the oper-
ating losses of Minas de Escucha, ESP 118 million
(EUR 709 194,28)
the operating losses of Minas de
Valdeloso SL, ESP 445 million (EUR 2 674 503,86) the
operating losses of Promotora de Minas de Carbón SA,
the operating
ESP 189 million (EUR 1 135 912,88)
losses
ESP 600 million
(EUR 3 606 072,27) the operating losses of the Picadin,
Pontedo and Arbas Groups of Uminsa, ESP 853 million
(EUR 5 126 633,25) the operating losses of the María
Group of Minero Siderúrgica de Ponferrada SA and ESP
million (EUR 6 184 414,55) the operating losses of the
Escandal Group of Coto Minero del Sil SA. The total
production to be covered by this aid to reduce activity is
3 523 121 tonnes annual capacity.

of Virgilio Riesco

SA,

(23)

The mean production cost in 1998, at 1992 prices, of
the undertakings
receiving aid under Article 3 of
Decision No 3632/93/ECSC is ECU 87,7/tce, broken
down as follows:

(26) Of the aid of ESP 56 121 million (EUR 337 294 003,1)
to Hunosa, ESP 37 989 million (EUR 228 318 488,3)
will be granted via SEPI.

— 10 % of production at costs between ECU 20 and

60/tce,

— 50 % of production at costs between ECU 60 and

80/tce,

— 30 % of production at costs between ECU 80 and

95/tce,

— 10 % of production at costs between ECU 95 and

199/tce.

(24)

The mean selling price to thermal power stations of the
11 088 607 tonnes (6 939 844 tce) of production envis-
aged in 2000 by the undertakings in receipt of operating
aid is ESP 8 902/tce (EUR 53,5/tce). In the light of the
envisaged mean cost of this production in 2000, namely
ESP 16 620/tce (EUR 100/tce), the Commission notes
that
the aid notified corresponds to the difference
between the cost of production and the selling price
freely agreed between the contracting parties in the light
of the conditions prevailing on the world market.

(25) Of

of

aid

the

losses

ESP 67 487

of Hunosa,

million
(EUR 405 605 038,88) to reduce activity, ESP 56 121
million (EUR 337 294 003,1) is intended to cover the
operating
ESP 4 940 million
(EUR 29 689 997,96) the operating losses of Mina la
Camocha, ESP 636 million (EUR 3 822 436,98)
the
operating losses of the underground workings of Endesa,
ESP 322 million (EUR 1 935 258,98)
the operating
the underground workings of Encasur,
losses of
the operating
ESP 903 million (EUR 5 427 139,3)

(27)

(28)

(29)

The mean selling price to thermal power stations of the
3 523 121 tonnes (2 263 857 tce) of production envis-
aged in 2000 by the undertakings in receipt of aid to
reduce activity is ESP 9 167/tce (EUR 55,1/tce). In the
light of the envisaged mean cost of this production in
2000, namely ESP 39 100/tce
the
Commission notes that the aid notified corresponds to
the difference between the cost of production and the
selling price freely agreed between the contracting
parties in the light of the conditions prevailing on the
world market.

(EUR 235/tce),

The aid to cover the operating losses sustained by coal
undertakings has been entered in the general State
budgets for 2000. It is 4 % lower than the aid authorised
by the Commission for 1999. Spain sent notification of
the Spanish Council of Ministers' decision on the
company-by-company allocation of
aid. This
decision has been published in Spain's Boletin Oficial del
Estado (1).

this

The inclusion of this measure in the modernisation,
rationalisation, restructuring and activity-reduction plan
notified by Spain, and the reduction in the aid and
quantities envisaged for 2000, are in line with the objec-
tives of the first and second indents of Article 2(1) of
Decision No 3632/93/ECSC, and in particular the objec-
tive to solve the social and regional problems created by
developments in the coal

industry.

(30)

In view of the above, and on the basis of the informa-
tion provided by Spain,
this aid is compatible with
Articles 3 and 4 of Decision No 3632/93/ECSC and with
the proper functioning of the common market.

(1) BOE No 226, 20.9.2000, p. 32254.

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(31)

(32)

(33)

(34)

(35)

(36)

IV

The aid of ESP 55 209 million (EUR 331 812 772,71)
which Spain is proposing to grant is intended to cover,
with the exception of the costs for the payment of social
welfare benefits borne by the State as a special contribu-
tion pursuant to Article 56 of the Treaty, compensation
paid to workers in Spanish coal undertakings who have
lost their jobs or have had to or will have to take early
rationalisation,
retirement under
restructuring and activity-reduction plan for the Spanish
coal

the modernisation,

industry.

of

aid,

this

ESP 36 634 million
totalling
Part
(EUR 220 174 774,3),
is to be granted to Hunosa to
cover the cost of workers who took early retirement
before 1 January 2000 and the 500 workers who will
retire in 2000. This part of the aid will be granted to
Hunosa via SEPI.

remaining

ESP 18 575

The
million
(EUR 111 637 998,4) is intended to cover compensa-
tion for the 5 806 workers in other undertakings in
early retirement at the end of 2000 as a result of the
modernisation, rationalisation, restructuring and activity
reduction measures.

This aid, designed to cover exceptional costs that have
arisen or are due to arise from restructuring, has been
entered in the general State budgets for 2000.

These financial measures relate to action made necessary
by the modernisation, rationalisation and restructuring
of the Spanish coal
industry and cannot therefore be
considered to be related to current production (inherited
liabilities).

Pursuant to Article 5 of Decision No 3632/93/ECSC the
aid mentioned explicitly in the Annex to the Decision,
namely the
cost of paying social-welfare benefits
resulting from the pensioning-off of workers before they
reach statutory retirement age and other exceptional
expenditure on workers who lose their jobs as a result of
restructuring and rationalisation, may be considered
compatible with the common market provided that the
amount paid does not exceed such cost.

(37)

In view of the above and on the basis of the information
provided by Spain, this aid is compatible with Article 5
of Decision No 3632/93/ECSC and with the proper
functioning of the common market.

V

(38)

The aid of ESP 15 152 million (EUR 91 065 354,06)
which Spain proposes to grant is intended to cover the
loss of value of the fixed assets of coal undertakings
which have to close down totally or partially, and other
exceptional costs to enable undertakings to cover the

costs that have arisen or are due to arise from the
progressive closures connected with the restructuring of
the coal

industry.

of

aid,

this

ESP 5 193 million
totalling
Part
(EUR 31 210 558,58), will be granted to Hunosa via
SEPI. The remaining sum, totalling ESP 9 959 million
(EUR 59 854 795,48), will be granted to the other
undertakings that are restructuring or reducing their
activity.

The aid to cover exceptional costs arising or due to arise
from restructuring has been entered in the general State
budgets for 2000.

These financial measures relate to action made necessary
by the modernisation, rationalisation and restructuring
of the Spanish coal
industry and cannot therefore be
considered to be related to current production (inherited
liabilities).

Pursuant to Article 5 of Decision No 3632/93/ECSC, the
aid mentioned explicitly in the Annex to the Decision,
namely exceptional intrinsic depreciation provided that
it results from the restructuring of the industry (without
taking account of any revaluation which has occurred
since 1 January 1986 and which exceeds the rate of
inflation) and other additional work and residual costs
arising from closures of installations, can be considered
compatible with the common market provided that the
amount paid does not exceed such costs.

Spain must ensure that the aid granted to undertakings
to cover exceptional costs is in line with the categories
of costs specified in the Annex to Decision No 3632/93/
ECSC.

In view of the above, and on the basis of the informa-
tion provided by Spain,
this aid is compatible with
Article 5 of Decision No 3632/93/ECSC and with the
proper functioning of the common market.

VI

The aid granted by Spain to the coal
industry is
restricted to coal production destined to be used for
electricity production. Spain undertakes to ensure that
coal sold to the industrial and domestic sectors is sold at
prices (exempt from compensation) that cover the costs
of production.

Spain must ensure that
the aid granted to current
production under this Decision does not give rise to any
discrimination
between
purchasers or between users on the Community coal
market.

producers,

between

coal

(39)

(40)

(41)

(42)

(43)

(44)

(45)

(46)

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(47)

(48)

(49)

(50)

(51)

in accordance with the third
Spain must ensure that,
indent of Article 3(1) of Decision No 3632/93/ECSC, aid
to cover the difference between the cost of production
and the selling price per tonne does not cause selling
prices for Community coal to be lower than those for
coal of a similar quality from non-member countries.

Spain must ensure that, within the framework of the
provisions of Article 86 of the Treaty, the aid is limited
to that which is strictly necessary in the light of the
social and regional considerations which characterise the
decline of the Community's coal industry. The aid may
not give any economic advantage, whether directly or
indirectly, to productions for which no aid is authorised
or to other activities distinct from coal production. In
particular, Spain must ensure that aid granted to under-
takings under Article 5 of Decision No 3632/93/ECSC
to cover the technical costs of closure is not used by the
undertakings as aid for current production (Articles 3
and 4 of the Decision) and that the closure of capacity
for which the aid is intended is definitive and that it is
carried out in optimum conditions of safety and envir-
onmental protection.

In accordance with the second indent of Article 3(1) and
with Article 9(2) and (3) of Decision No 3632/93/ECSC
the Commission must verify that the aid authorised for
current production responds exclusively to the objectives
stated in Articles 3 and 4 of the Decision. Spain must
notify the Commission, no later than 30 June 2001, of
the amount of aid actually paid during 2000, and
declare any corrections made to the amounts originally
notified. When submitting this annual statement of aid
paid, Spain must also supply the Commission with all
the information necessary for verification of the criteria
set out in the Articles in question.

In approving the aid, the Commission has recognised
the need to soften, as far as possible, the social and
regional impact of the restructuring of the coal industry,
given the economic and social situation surrounding the
mines affected.

In view of the above, and on the basis of the informa-
tion provided by Spain,
the measures and the aid
proposed for the coal industry are compatible with the
objectives of Decision No 3632/93/ECSC and with the
proper functioning of the common market,

HAS ADOPTED THIS DECISION:

Article 1

Spain is hereby authorised to pay the following aid in respect
of 2000:

(a) operating

aid

million
(EUR 292 668 854,35) under Article 3 of Decision No
3632/93/ECSC;

ESP 48 696

of

(b) aid for the reduction of activity of ESP 67 484 million
(EUR 405 587 008,52) under Article 4 of Decision No
3632/93/ECSC;

(c) aid of ESP 55 209 million (EUR 331 812 772,71) under
Article 5 of Decision No 3632/93/ECSC, to cover excep-
tional welfare aid for workers who lose their jobs as a
result of the measures to modernise, rationalise, restructure
and reduce the activity of the Spanish coal

industry;

(d) aid of ESP 15 152 million (EUR 91 065 354,06), under
Article 5 of Decision No 3632/93/ECSC,
to cover the
exceptional technical costs of closing down mining installa-
tions as a result of the measures to modernise, rationalise,
restructure and reduce the activity of the Spanish coal
industry.

Article 2

In accordance with Article 86 of the ECSC Treaty, Spain shall
adopt all appropriate measures, whether general or particular,
to ensure fulfilment of
the obligations resulting from this
Decision. It shall ensure that the aid authorised is used for the
purposes intended and that any unspent, overestimated or
incorrectly used aid for any item covered by this Decision is
repaid to it.

Article 3

Spain shall notify the Commission, by 30 June 2001 at the
latest, of the amount of aid actually paid in respect of 2000.

This Decision is addressed to the Kingdom of Spain.

Article 4

Done at Brussels, 13 December 2000.

For the Commission

Philippe BUSQUIN

Member of the Commission