Opinion of the ECSC Consultative Committee on the European Commission's Green Paper "Towards a European strategy for the security of energy supply" (adopted unanimously during the 356th session of 21 June 2001)
Date: 2001-06-21
Institutions: Consultative Committee of the European Coal and Steel Community
Subjects: ECSC, energy policy, industrial policy, security of supply

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Official Journal of the European Communities

7.8.2001

Opinion of the ECSC Consultative Committee on the European Commission’s Green Paper
(cid:145)Towards a European strategy for the security of energy supply(cid:146)

(adopted unanimously during the 356th session of 21 June 2001)

(2001/C 220/02)

I. INTRODUCTION

The ECSC Consultative Committee hereby expresses its opinion
on the Green Paper approved by the European Commission on
29 November 2000 (cid:145)Towards a European strategy for the
security of energy supply(cid:146) (1), with reference to:

(cid:145)If no measures are taken(cid:146), states the Green Paper,

the environment and of the climate and sufficient security of
supply.
(cid:145)in
the Union’s energy
the next 20 to 30 years 70 % of
requirements, as opposed to the current 50 %, will be
covered by imported products. This dependence can be
witnessed in all sectors of the economy(cid:146).

(cid:151) its Resolution of 27 June 1996 on the White Paper on (cid:145)An

energy policy for the European Union(cid:146) (2),

(cid:151) the Council Resolution of 8 July 1996 on the White Paper

on (cid:145)An energy policy for the European Union(cid:146) (3),

(cid:151) the Council Decision of 14 December 1998 adopting a
in the

multiannual
energy sector (1998-2002) and connected measures (4),

framework programme for actions

(cid:151) the Council Conclusions of 14/15 May 2001 on the Green
Paper (cid:145)Towards a European strategy for the security of
energy supply(cid:146) (5),

(cid:151) its Declaration on the role of coal in the Europe of the 21st
century (6) of 29 June 1999 and its Declaration on the role
of steel in Europe at the beginning of the 21st century (7) of
5 April 2001,

(cid:151) its Resolution of 1997 (8) as well as its Opinion of 2001 (9)
on the restructuring of the Community framework for the
taxation of energy products,

(cid:151) its most

recent opinion on the ECCP and emissions

trading (9), and

(cid:151) various opinions on the Green Paper (cid:145)Towards a European
strategy for the security of energy supply(cid:146) issued by coal
and
already
and
forwarded to the Commission or in preparation.

associations,

companies

steel

etc.

The European Commission’s Green Paper on the security of
energy supply published 29 November 2000 arose from its
awareness
the European Union’s energy policy was
facing structural weaknesses as regards both the protection of

that

(1) COM(2000) 769 final.
(2) OJ C 232, 10.8.1996, p. 3.
(3) OJ C 224, 1.8.1996, p. 1.
(4) OJ L 7, 13.1.1999, p. 16.
(5) 2347th meeting of the Council on 14 and 15 May 2001.
(6) Doc. 1675/1/1999.
(7) Doc. 2151/4/2000.
(8) OJ C 356, 22.11.1997, p. 3.
(9) OJ C 170, 14.6.2001.

The ECSC Consultative Committee welcomes the revival of an
energy-policy discussion which aims to achieve greater security
of supply in the context of sustainable development in Europe
and adherence to the subsidiarity principle reconfirmed by the
Nice reform of the Treaty. The Committee expressly endorses
the European Commission’s endeavours to shift the focus of
the multidimensional policy discussions to the diversity of
energy sources and the long-term risks for the supply chain.

In the interest of energy consuming economy and the citizens
of the European Union, the main energy policy aim must be a
secure, diversified and sustainable supply of energy under
conditions of fair competition and free market prices.

II. THE COAL AND STEEL INDUSTRY AND THE SUPPLY OF

ENERGY IN EUROPE

General remarks

supply,
The Union’s energy policy aims are security of
economic viability and environmental protection. These also
correspond to the three dimensions of sustainability (cid:151) the
economic, the social and the ecological (cid:151) none of which we
can afford to ignore in the field of energy, either. For a corre-
spondingly multidimensional approach, a sustainable balance
needs to be struck between all three aims, and that balance
needs to be maintained.

Consumers must have the right to purchase energy every time
at the most economic prices available within a framework that
meets environmental objectives. In the long term this can only
be ensured by access
to diverse and competitive energy
supplies from inside and outside EU. Allowing the European
energy market
to be dominated by suppliers could leave
consumers exposed to rising prices in scarcity of resources.
The Commission should ensure that consumers are protected
by the adaption of a secure, diverse and sustainable energy
policy.

These challenges can be met only if energy systems which are
as flexible as possible and work efficiently even in crises are
developed and utilised consistently. The ECSC Consultative
Committee
European Commission’s
proposal
that all energy resources and options available in
the EU should be used to solve Europe’s long-term supply
problems.

supports

thus

the

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The ECSC Consultative Committee acknowledges the European
Commission’s endeavours to devise overall policies that will
produce a reversal of the present energy-use and transport
trends, bearing in mind the rigorous climate protection
objectives and increasing import dependence of the European
Union. Political
intervention and other action to be taken
should concentrate more on the demand side.

Potential savings by energy consumers

By dint of enormous investments overall, most
industrial
concerns have already been able to achieve considerable
increases in energy efficiency, even though it is precisely in
the energy-intensive branches of industry that there is always
a great deal of pressure on costs as a result of market forces.
These savings by industrial concerns mean that nowadays only
around one-quarter of total final energy consumption can be
attributed to the industrial sector.

The European Commission’s energy strategy, which is geared to
taking due account of environmental aims and security of
supply, should therefore in future concentrate on improving
the energy efficiency of transport and private households/the
tertiary sector, where there is the greatest potential for energy
savings and emissions reduction, since private households and
final energy
the tertiary sector account
consumption and are lagging a good way behind industry
when it
to energy utilisation technology. The
agreement by the EU automotive industry to improve the
energy consumption of road vehicles is an excellent example
of how to achieve this.

for 75 % of

comes

total

the

ECSC Consultative Committee

Therefore,
supports
measures for the enhancement of the thermal efficiency in
new as well as in existing buildings and for the promotion
of greater investments in transport and infrastructure.

As regards energy taxation, the ECSC Consultative Committee
would like to re-emphasise the views expressed in its opinion
of 5 April 2001, on the proposed Directive on the restruc-
turing of Community guidelines for the taxation of energy
products.

Shaped by the market

The market must be the reference frame for European energy
policy. The reality of the single energy market means that in all
their activities and operations energy supply undertakings must
abide by that market’s rules.

The ECSC Consultative Committee:

(cid:151) advocates consistent application of the single market rules

and rejects market-distorting regulations,

(cid:151) calls

for

liberalisation measures

relating to economic
activities in the electricity and gas supply chain to be
speeded up,

(cid:151) supports equal opportunities as regards access to the energy

markets,

(cid:151) calls for a general framework of economic, political and
for

social
investments, including major, long-term ones,

stability which will

an incentive

act

as

(cid:151) advocates reducing the risks associated with certain sources
of supply by intensifying the international dialogue and
drawing up more trade and cooperation agreements with
the major supplier countries concerned.

the internal energy market

The Commission, national governments and public institutions
must restrict their intervention to the minimum required to
ensure that
is an efficiently
working reality and that the necessary security of supply and
safeguarded. The European
environmental protection are
Commission should promote agreements with non-member
countries which enable the energy industry to operate in a
market
for
offers
investment.

system which

protection

sufficient

Research for the future

including the European Community, often
Public authorities,
play a decisive role where undertakings involved in Community
research are faced with the decision whether or not to take on
major financial risks in developing innovative technologies and
is
improving energy-saving ones. Against
important
the European Commission allows sufficient
scope in its research framework programmes for supporting
research and development into environmentally-friendly inno-
vations in the energy sector.

this backdrop it

that

The coal and steel industry must have an equal right of access
to these research funds
to be able to make its
so as
contribution to tackling the wide range of energy policy chal-
lenges facing the European Union, which are set out in the
Green Paper.

COAL INDUSTRY CONCERNS

The general assertion (cid:151) too sweeping a statement as it stands
(cid:151) that hard coal production in Europe is uneconomic and
uncompetitive and therefore has no chance of survival
is a
matter of profound concern to the ECSC Consultative
Committee. The Green Paper ignores the fact that the use of
indigenous coal can both reduce the risks of supply and make
a substantial contribution to the protection of the environment
and the climate.

The environmental contribution of coal

In order to ensure that coal makes a contribution to the secure
and environmentally acceptable supply of energy in Europe, the
answer to the ecological challenges must lie in the promotion
of modern, even more efficient clean coal producing and using
technologies. Their introduction and further penetration should
be supported by the Community at all levels.

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Modern coal technologies in connection with new regulations
on air quality and new emission limit values
large
combustion plants and national emission ceilings will lead in
the coming years (cid:151) after considerable and partially enormous
progress in the past (cid:151) to large reductions of SO2, NOx and
other pollutants on both existing and new plants.

for

Along with other modern coal-utilisation technologies, coal
gasification would be an environmentally acceptable way of
the EU’s energy supply. The
guaranteeing the security of
considerable
coal
gasifiers can provide an alternative to conventional gas
supplies. The ability to utilise coal gas in clean coal stations
or conventional gas power plants will place a cap on gas prices
and thus provide a predictable cost to the European economy.

gasification means

flexibility of

that

Innovative coal technologies thus represent an enormous and
as yet barely explored field for climate protection research. The
experts even assume that it will be possible in the medium
term for coal-fired stations to sequester CO2 so that in future
no more emissions will be released. Captured CO2 is already
being used in oil production, to achieve the highest possible
output. CO2 recovered from coal-fired plant could thus be used
in order to increase the lifetime of
in this sector as well,
petroleum reserves (in the North Sea,
In the
USA and Japan,
intensive research and development efforts
are already under way in this field. Europe must beware of
being left behind.

for example).

At the same time, it must be emphasised that in the EU the
consumption of hydrocarbons and natural gas has led to a
corresponding increase of CO2 emissions. By way of contrast,
CO2 from coal use have been declining for many years (the
reduction rate of CO2 emissions from coal
is 26,2 % since
1990) which is absolutely not the case in the rest of the world.

Scope for national action

According to the forecasts in the Green Paper, coal will also
continue to be an important energy source in Europe,
providing a secure and exceptionally low-priced contribution
to energy supply.

the resource economy is going
It has to be stated that
world-wide through a far-reaching restructuring and concen-
tration process. One can observe an increasing consolidation
among coal producers who are operating worldwide, as well as
a worldwide growth in the demand for coal (according to the
World Energy Council demand will be up 55 % by 2020). At
the same time, the European Union is the biggest energy and
coal import region in the world.

As the Commission stresses, the abundance of coal (over 200
years’ reserves),
its geographical and geopolitical diversity of
sources (more than for other fossil fuels), general stability of
prices,
transportation, are
together with safety and ease of
major advantages in term of security of supply.

The ECSC Consultative Committee supports the European
Commission’s desire to maintain, as part of the common aim
to guarantee the EU’s energy supply, a minimum level of

domestic hard coal output. This would make an active
contribution to diversification, and access could be guaranteed
to indigenous coal
size, will
continue to be Europe’s largest reliable energy reserve.

reserves which, given their

indigenous coal reserves will continue to be of
As a result,
strategic importance. Furthermore,
industry as a
whole is a significant factor in providing employment and a
guarantor of economic and social cohesion in the relevant
regions.
It also plays an important role as the base for a
range of technologies which benefit other sectors, too, not
least the environment.

the coal

To maintain an efficient coal industry in the European Union
there needs to be (cid:151) consistent with maintaining compatibility
with the common market (cid:151) sufficient scope for the Member
States to define their respective production and consumption
levels. For
the
respective resource situations and national energy policy
priorities. In any case these measures may not create further
disadvantages and distortions to coal users within the internal
energy market.

this purpose, account must be taken of

A sustainable minimum output of domestic coal and accom-
panying social and regional policy measures for the readap-
in coalmining areas will need a political
tation process
framework, in other words, a new specific code for coal aid
based on the EC Treaty will have to be devised in the relatively
near future, given that the ECSC Treaty expires in 2002. Here,
as in other ECSC succession issues, time is short, especially
because in the negotiations on the enlargement coal and steel
sectors are of particular relevance.

The idea suggested in the European Commission’s Green Paper
of a national primary energy mechanism for domestic energy
sources (especially hard coal and renewable energies) could be
a step in the right direction. It could help to strengthen the
Community’s security of supply on a lasting basis, in a manner
the Member States and the
consistent with the powers of
principle of subsidiarity. However,
this
measure must be proportionate to the actual needs and must
not imply inappropriate burdens for the energy consumers.

to happen,

for that

A factor to be taken into account in this equation is also the
15 % priority quota for indigenous energy sources already
introduced as part of the Directive on the internal market in
electricity which should, where appropriate, be extended to
cover uses of solid fuels in other markets.

SPECIFIC FEATURES OF THE STEEL INDUSTRY

is vitally important. Similarly,

For energy-intensive sectors such as the steel industry, security
of energy supply in the long term, underpinned by a
broad-based energy mix,
it is
important for companies that the policy does not concentrate
too heavily on security of supply and environmental protection
to the point of ignoring economic viability. An energy demand
policy which is geared to sustainability must address itself with
the same intensity to the efficiency of companies in global
competition.

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In this context, one should also keep in mind that the issue of
security of supply is of increasing importance across the whole
range of mineral resources.

Coal as a reducing agent

It is often overlooked in political debate (cid:151) and unfortunately
also in the European Commission’s Green Paper (cid:151) that coal is
an energy source that is used in the steel industry primarily as
a reducing agent and therefore not only as fuel; it is, above all,
a raw material. Other reducing agents can perform this role,
but only to a limited extent. Coal, which is crucial to the blast
furnace/oxygen steel production process, will remain for the
foreseeable future an absolutely crucial energy source and
chemical raw material for the steel industry.

One facet of security of supply, from the steel industry’s point
of view, is that energy sources (e.g. coal, natural gas, oil, elec-
tricity) must not only be available in sufficient quantities, but
must also be of
the respective
production process. This applies in particular to metallurgical
coal.

the necessary quality for

The energy-purchasing patterns of the steel industry will hardly
change in the coming years. At present
they break down
approximately as follows: coal 60 %, electricity 20 %, natural
gas 15 % and oil 5 %. The predicted increase in EU electric steel
production will not have a substantial influence on the steel
industry’s dependency on coal.

In order to avoid distortions of competition between the
there is a need for an
various steel production processes,
equal
energy sources used both for
tax exemption of
chemical reduction in blast furnaces as well as for electricity
for electric steel production.

A natural interest in energy-saving

technology, one of

The steel
industry
industry is an energy-intensive sector of
which has a major interest in minimising energy consumption,
inter alia for reasons of profitability. The issue of how to use
energy raw materials economically for steel production is, next
revolution in
to the structural changes and technological
process
to
challenges
the persistent
improving energy efficiency and achieving the attendant
reduction in environmental pollution. Unilateral regulatory or
fiscal measures taken by the Member States or by the EU (cid:151) in
the form of energy taxes for instance (cid:151) are not appropriate. In
they deprive
counterproductive, because
fact,
are
they
to develop more
the
steelmakers of
potential ways of saving energy in all areas of technical devel-
opment.

resources

financial

Approaching the limit of energy-saving

By achieving notable increases in efficiency throughout
the
energy utilisation chain, the steel industry has already made a
major
contribution to environmental protection and to
reducing pressure on the energy consumption side. Over the
last 25 years, specific energy consumption has been reduced by

about 40 % by optimising production processes and increasing
raw material and energy efficiency.
the steel
industry has gone
achieving the
minimum level that is currently technically feasible.

long way towards

In this way,

a

III. FINAL CONCLUSIONS

factors,

the distribution of

(world market prices,

In view of the external risk factors which the EU can do little
raw
to control
material reserves, economic developments and investments in
producing countries, geopolitical
the best
guarantee for the security of supply is to maintain a diversity
of energy and supply sources. As the Green Paper suggests, this
sources
includes
(renewable energies in particular but also indigenous coal),
energy
diversifying
cultivating
of
and
relations with external
strengthening
supplier
countries,
transport networks
and a properly functioning internal
energy market.

securing/expanding

indigenous

sources

supply,

energy

etc.),

Given present general conditions and forecasts, it is impossible
for the Union to reduce its dependence to any substantial
let alone achieve self-sufficiency.
degree in quantity terms,
Wide-ranging diversification is thus all the more important.
And yet, under pressure owing to environmental protection
concerns, solid fuels and nuclear energy are now beginning
to lose ground where electricity production is concerned. In
the short- and medium-term, however, reducing the shares of
those two energy sources would lead to intolerable economic
tensions and pressure on supplies in Europe, as the Green
Paper rightly points out. Renewable energies alone certainly
cannot solve the supply problems (cid:151) in particular when
distortions of competition and disadvantages are created at
the expense of other energy sources. Therefore all the energy
sources will be necessary to meet the future demand and to
alleviate energy supply tensions.

therefore wishes

The ECSC Consultative Committee
to
emphasise that, from the point of view of security of supply
as well as from the point of view of employment and social
conditions, no energy source should be ruled out and barred
access to the market for the sake of ideological or unilateral
environmental concerns in the long term, either. For example,
closing down coal-fired and nuclear power stations in the near
future would in many cases lead either to serious electricity
shortages or to shortfalls being made up by the building of
additional gas-fired plant, for example, or electricity imports
from third countries. This would have negative effects on gas
prices which should not be underestimated and which would
drastically increase
the dependence of European energy
supplies on imports from third countries, with all the risks
that that would entail.

In energy terms, a global prospective and balanced approach is
necessary, taking into account the demand side but also the
supply side measures.
Instead of an extreme energy supply
it is preferable to have a diversified, medium and
solution,
long term oriented mix of coal, other fossil
fuels, nuclear
and renewable sources with the proper technology in relation
to central challenges of energy policy, climate change and
security of supply.