Opinion of the ECSC Consultative Committee on the European Commission proposal for a Council Regulation on State aid to the coal industry (adopted unanimously with one abstention at the 358th session of 11 October 2001)
Date: 2001-10-11
Institutions: Consultative Committee of the European Coal and Steel Community
Subjects: ECSC, State aid, advisory committee (EU), coal industry, energy policy, security of supply

C 321/2

EN

Official Journal of the European Communities

16.11.2001

OPINION OF THE ECSC CONSULTATIVE COMMITTEE

on the European Commission proposal

for a Council Regulation on State aid to the coal
industry (1)

(adopted unanimously with one abstention at the 358th session of 11 October 2001)

(2001/C 321/02)

1. Early decision required

As far back as 28 June 1995,
the ECSC Consultative
Committee took the view in its Memorandum on matters
connected with the expiry of the ECSC Treaty in 2002 that
the current ECSC rules on aid for the coal sector were not
just of social and regional importance but should also be
(cid:145)considered to be an adequate instrument for energy policy(cid:146)
and (cid:145)that after the expiry of the ECSC Treaty, this type of aid
by Member States should be expressly permitted(cid:146) (2).

However, it is now nearly the end of 2001 and this issue of
vital importance to the coal industry in the Community has
still not been resolved. With the prospect of EU enlargement
to the east only a few years away, the central and eastern
European accession countries need to be given clear signals
on aid policy. Not only for the coal and steel sectors, but for
industry in general, there is a need to have a stable legal and
and employment
planning framework for
purposes.

investment

The Consultative Committee therefore welcomes the fact
the Commission has now presented a proposal on
that
this urgent issue, which needs to be discussed immediately
by the Council so that an early decision can be taken.

In this context, the Committee reiterates that it is absolutely
vital for the Steel Aid Code to be renewed on the expiry of
the ECSC Treaty. The current Commission proposal
to
terminate the separate arrangements that are in place for
the so-called sensitive sectors by absorbing them into the
multisectoral framework for large investment projects (and
frameworks as necessary) will not
into other horizontal
meet
industry. This
steel
proposal will weaken the State aid disciplines that played
an important role in removing the over-capacity from which
the EU steel industry previously suffered. It is complex to
administer, economically inefficient and lacks transparency.

specific needs of

the

the

2. General and specific comments on the explanatory

memorandum

The Consultative Committee considers that the Commission
proposal gives a comprehensive, and generally accurate,
description of the situation in the European coal industry
and of its key determining factors.

In principle, the Committee agrees with the Commission’s
approach of determining the future role of coal and the

issue of aid to the coal industry after the expiry of the ECSC
Treaty as part of a strategy on the security of energy supply
(cid:151) in accordance with the position adopted by the
Committee on the Commission’s Green Paper on the
security of energy supply (3).

The Committee also welcomes the principle that, in order to
achieve the common goals of safeguarding energy supply
and to ensure sustainable development, the Member States
retain the possibility of creating an indigenous primary
energy base founded on coal and renewable energies.

The Committee is also in agreement with the Commission
that a coal aid scheme based on the EC Treaty requires a
careful analysis of the links with other fields of Community
policy, particularly, as detailed by the Commission in its
explanatory memorandum,

(cid:151) the consequences for competition in the coal and elec-
tricity sectors (the steel sector should also be taken into
account in this context (cid:151) but distortions of competition
instances be avoided by the adoption of
can in all
suitable provisions),

(cid:151) the environmental effects of coal extraction and coal use
(when discussions are conducted on environmental
policy, even within the Commission, the proven high
environmental and safety standards of coal extraction
in the EU and the progress and potential of modern
clean coal technologies need to be emphasised more
than they have been),

(cid:151) the conditions for social and regional cohesion in the
coalmining areas (highlighting the regional and social
problems of further restructuring), and

(cid:151) EU enlargement

(extending to major coal-producing
such as Poland and the Czech Republic,
countries
where the geological conditions are relatively similar
to those in the Community).

One further specific remark needs to be made in this
context. The Committee was taken aback to note the
assertion in the Commission proposal concerning coal aid
that (cid:145)measures have been taken(cid:146) with regard to the social
dialogue in the framework of
the ECSC Consultative
Committee (cid:145)to enable this dialogue to continue as effectively
as possible in the framework of the EC Treaty after 23 July
2002(cid:146) (Annex 4, Section 3).

(1) COM(2001) 423 final, 25.7.2001.
(2) OJ C 206, 11.8.1995, p. 9.

(3) OJ C 220, 7.8.2001, p. 2.

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Official Journal of the European Communities

C 321/3

to substantial
proposal (cid:151) allows continued access
deposits, thus ensuring the preservation of the infra-
structure in working order, skilled core workforce and
technological know-how required for this purpose. The
reduction of the aid earmarked to secure these resources
should therefore only proceed to the point at which this
minimum level is reached.

(cid:151) The social and regional consequences of further adap-
tation must at the same time be given consideration. Aid
for
the reduction of coalmining activity should be
limited to the period up to 2007 only in so far as it
concerns measures decided upon within the framework
of Decision No 3632/93/ECSC. The current scheme
already makes provision for a certain amount of flexi-
bility beyond 2002 (cid:145)on exceptional social and regional
grounds(cid:146).
to
impose reductions in this aid.

It would also be more appropriate not

(cid:151) In its proposal, the Commission itself admits to a fairly
vague and thus very broad margin of discretion,
particularly in assessing aid to secure resources or the
underlying plans for such aid. This broad margin of
discretion clashes with the idea of legal certainty and
predictability, and with the competence of the individual
Member States where
concerned. More
stringent
assessment and authorisation criteria are
required. The proposal contains examples of impractical
and disproportionate requirements, such as providing
economic data on each and every production unit in a
coal enterprise or asking Member States to supply (cid:145)all
the information regarding reductions in greenhouse gas
emissions(cid:146).

energy is

no

through

discrimination

industry and coal-producing Member States
(cid:151) The coal
should
either
suffer
procedures or information and notification obligations
which differ from the normal rules governing aid in
other sectors. There is therefore no reason to change
the procedural rules which have been tried and tested
within
comply with
Community law. There is nonetheless a need to amend
the deadlines for the notification, examination and auth-
orisation procedure so that the Commission can reach
timely decisions
even with increased information
requirements.

ECSC framework

and

the

The Consultative Committee does not in fact yet know of
any such measures. Indeed, its activities will end with the
expiry of the ECSC Treaty without, regrettably, there being
any comparable body to replace it. Coal and steel will
instead be assigned to the general European Economic and
bilateral
Social Committee, with which constructive
negotiations
being
conducted. These talks have, however, not yet reached a
final outcome, nor can any judgement be made at this
the future structured
stage about
dialogue for the coal and steel sectors.

the effectiveness of

incorporation

currently

are

on

3. Questions and concerns about the regulatory section

Moving on to the details of the proposed regulation, the
Consultative Committee feels that a number of problems
and unresolved issues still require further discussion before
adequate remedies can be found. The benchmark view here
is once again the position adopted by the Committee on the
Commission’s Green Paper on the security of energy supply,
industry (1). The
particularly its statements on the coal
following identifies
the main questions and concerns
discussed in the Committee:

(cid:151) Is it satisfactory that a scheme which is intended to
apply until 2010 only makes specific provisions until
2007, and makes plans
for a review covering the
remaining period which may entail quite different
provisions,
thus clouding the future outlook? The
Committee considers it useful that the scheme apply
right through until at least 2010. The Council does, in
any case, retain the right to make amendments, and the
arrangement whereby the Commission can present an
interim report containing any proposals for amendments
is sufficient. This is apparent from the current scheme
which,
the Commission itself, has
proven its worth over its lifespan of some 8‰ years.

in the opinion of

(cid:151) It

energy

is also problematic that a scheme which aims to
improve the security of energy supply by creating a
solid primary
the
base,
(cid:145)continuous reduction(cid:146) and reallocation of coal aid to
renewable energy sources. It is desirable that the new
scheme make it possible for the Member States to strive
for the long-term goal of a stable minimum output of
indigenous coal, which (cid:151) as detailed in the Commission

demand

should

(1) See ibid., especially p. 3 et seq.