Report from the Commission on the application of the Community rules for state aid to the coal industry in 2001
Date: 2002-04-10
Institutions: European Commission
Subjects: France, Germany, Spain, State aid, United Kingdom, coal industry, industrial restructuring

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 10.4.2002
COM(2002) 176 final

REPORT FROM THE COMMISSION

on the application of the Community rules for state aid to the coal industry in 2001

TABLE OF CONTENTS

Introduction.................................................................................................................. 3

Coal industry and market ............................................................................................. 4

Production .................................................................................................................... 4

Employment ................................................................................................................. 4

Coal demand and trade................................................................................................. 5

Situation in European Union coal fields ...................................................................... 6

Germany....................................................................................................................... 6

Spain............................................................................................................................. 7

France........................................................................................................................... 7

United Kingdom........................................................................................................... 7

Others ........................................................................................................................... 8

Financial aid scheduled for the coal industry............................................................... 8

Germany..................................................................................................................... 11

Spain........................................................................................................................... 13

France......................................................................................................................... 14

United Kingdom......................................................................................................... 15

Legal disputes ............................................................................................................ 16

Complaints ................................................................................................................. 16

Appeals....................................................................................................................... 17

Conclusions................................................................................................................ 18

1.

2.

2.1.

2.2.

2.3.

3.

3.1.

3.2.

3.3.

3.4.

3.5.

4.

4.1.

4.2.

4.3.

4.4.

5.

5.1.

5.2.

6.

2

1. 

INTRODUCTION

Article  10  of  Commission  Decision  No  3632/93/ECSC  of  28  December  1993  establishing
Community  rules  for  State  aid  to  the  coal  industry  requires  the  Commission  to  report  each
year to the Council, the European Parliament and the ECSC Consultative Committee on the
application of these rules.

The  report  examines  the  financial  aid  granted  by  France,  Germany,  Spain  and  the  United
Kingdom to their coal industries in 2001.

Such  measures  may  be  considered  compatible  with  the  proper  functioning  of  the  common
market only if they help to achieve at least one of the following objectives:

– 

– 

– 

to make, in the light of coal prices on international markets, further progress towards
economic viability with the aim of achieving degression of aid;

to solve the social and regional problems created by total or partial reductions in the
activity of production units;

to help the coal industry adjust to environmental protection standards.

As  required  by  Article  8  of  the  Decision,  the  Member  States  submitted  to  the  Commission
their  plans  to  modernise,  rationalise  and  restructure  the  coal  industry.  After  examining  the
plans  the  Commission  delivered  opinions  on  their  conformity  with  the  general  and  specific
objectives  set  by  Articles  2,  3  and  4  of  Decision  No  3632/93/ECSC,  and  in  particular  the
Decisions  adopted  on  13  December  1994,1  2  December  19982  and  21  December  20003  for
Germany, 13 December 19944 and 3 June 19985 for Spain, 19 July 19956 for France, and 1
June 19947 and 15 November 20008 for the United Kingdom. In accordance with Article 9(1)
of Decision No 3632/93/ECSC, the Member States notified all the financial aid they intended
to  grant  for  2001,  as  they  had  for  the  previous  years,  on  the  basis  of  these  modernisation,
rationalisation  and  restructuring  plans.  The  Commission's  rulings  on  these  measures  were
given in the Decisions set out below:

1

2

3

4

5

6

7

8

Decision 94/1070/ECSC of 13 December 1994 - OJ L 385, 31.12.1994, p. 18.
Decision 99/270/ECSC of 2 December 1998 - OJ L 109, 27.4.1999, p.14.
Decision 2001/361/ECSC of 21 December 2000 - OJ L 127, 9.5.2001, p.55.
Decision 94/1072/ECSC of 13 December 1994 - OJ L 385, 31.12.1994, p. 31.
Decision 98/637/ECSC of 3 June 1998 - OJ L 303, 13.11.1998, p. 57.
Decision 95/465/ECSC of 19 July 1995 - OJ L 267, 9.11.1995, p. 46.
Decision 94/574/ECSC of 1 June 1994 - OJ L 220, 25.8.1994, p.12.
Decision 2001/114/ECSC of 15 November 2000 - OJ L 43, 14.2.2001, p. 27.

3

                                                
Member State

Commission
Decision

Date of the Decision

Official Journal

Year of aid

United Kingdom

2001/683/ECSC

8 May 2001

L 241, 11.9.2001, p. 10

United Kingdom

2001/807/ECSC

25 July 2001

L 305, 22.11.2001, p. 27

United Kingdom

2001/82/ECSC

17 October 2001

L 35, 6.2.2002, p. 19

Spain

2001/XXX/ECSC

11 December 2001

Not yet published

2001

2001

2001

2001

Germany

2000/361/ECSC

21 December 2000

L 127, 09.05.2001, p. 55

2000-2001

France

2001/678/ECSC

23 May 2001

L 239, 7.9.2001, p. 35

2001

The amounts of financial aid referred to in this document are the final figures authorised by
the Commission for 2001 under Decision No 3632/93/ECSC. Aid for various purposes such
as, for example, the specific social benefits paid by the Member States as part of the special
contribution provided for under Article 56 of the ECSC Treaty is therefore not included. This
is the sixth report under Article 10 of this Decision following its entry into force on 1 January
1994.

2. 

COAL INDUSTRY AND MARKET

2.1. 

Production

In  2001,  coal  production  in  the  European  Union  totalled  77.3  million  tonnes,  down  by  5.2
million tonnes compared with 2000. This reflects the  general  downward  trend  over  the  past
few  years,  and  should  be  further  confirmed  since  the  production  forecast  for  2002  is
approximately 75 million tonnes.

Table 1

Coal production (1000 t)

1994
0

1992
218
72153
18551
9478
221
83987
149

1999
0
B
40700 39200
D
16320 15420
E
4532
4862
F
0
0
P
41180 37080
UK
0
Other
EU 15 184757 152553 126851 130371 121436 118069 103062 96323

1995
0
52000 53100
18194 17627
7014
7538
0
147
48971 52630
0

1993
0
57900
18402
8576
197
67463
15

1996
0
47900
17688
7310
0
48538
0

1997
0
45800
18000
5779
0
48490
0

1998
0

1

0

2000
0
33300
14800
3166
0
31970
0
83236

2001*
0
29000
13800
2334
0
32121
0
77255

Source: Member States; yearly statistics (1992-2000); *=estimates

2.2. 

Employment

Continuation  of  the  measures  to  rationalise  and  reduce  activity  in  the  coal  industry  in  most
coal-producing countries led to a further drop in employment figures. In 2001, the workforce
was reduced by 5 600 to 87 800 workers. The biggest drop in absolute terms was in Germany,
with 4 400 job losses, followed by Spain (about 1 400). In France, there were about 1 000 job
losses.  Further  reductions  are  expected  in  2002,  above  all  in  Germany  and  Spain.  In  the

4

United Kingdom, the number of workers in the coal industry rose from about 11 500 in 2000
to 12 700 in 2001.

2.3. 

Coal demand and trade

Internal  deliveries  of  coal  within  the  Community  (including  net  imports)  remained  almost
stable  at  257  million  tonnes  in  2001.  This  development  is  largely  due  to  the  electricity
generating  sector,  which  has  always  been  the  main  coal  user  in  the  European  economy,
accounting for about 70% of total consumption. .

Table 2

Total internal deliveries of coal (1000 t)

B
DK
D
EL
E
F
IRL
I
L
NL
A
P
FIN
S
UK
EUR 15

2000

2001*

1999

1 623

1993
11 118
10 219
75 179
2 279
30 802
26 818
3 092
14 950
277
13 524
3 029
4 761
4 222
2 422
85 733

9 628
6 671
67 399
1 030
37 133
22 229
2 795
17 957
171
15 500
3 731
6 367
4 573
3 078
58 897
288 425 268 087 280 240 269 692 273 949 265 385 244 191 257 159

1998
9 897
11 077
10 446
7 804
83 940 65 311
1 382
30 948 34 681
25 533 21 946
1 839
17 068 16 972
151
15 175 11 528
3 733
3 458
6 099
5 046
3 785
3 081
2 980
5 938
67 490 56 083

1995
13 122
12 937
78 904
1 447
31 152
19 803
3 104
11 310
217
14 937
2 728
5 940
6 192
1 978
76 469

1994
11 569
11 569
75 003
1 944
29 518
21 698
2 988
14 426
303
13 944
2 826
5 144
5 549
2 582
69 024

1997
10 767
11 161
69 367
1 927
32 778
21 503
3 043
16 071
195
15 123
3 317
5 660
4 096
6 095
72 846

1996
12 106
13 011
72 558
2 490
28 778
15 907
3 147
15 993
245
14 690
3 393
5 688
4 034
3 054
74 658

2 918

153

9686
5572
65126
1150
35514
21095
2737
19859
203
15942
3483
5751
4328
3147
64051
257644

Source: Eurostat; yearly (1992-1998) and monthly (1999, 2000); *=estimates

In 2001,  coal imports from third countries  rose to more than  181 million tonnes in  order  to
compensate for reduced internal production. The price of coal - unlike that of hydrocarbons -
rose  by  around  20%  on  the  international  markets  in  2001.  A  further  important  point  is  that
imported coal from third countries is gradually replacing Community coal in some sectors of
the  market.  The  transport  of  coal  by  sea  does  not  give  rise  to  any  major  environmental
problems. Unlike oil tankers, ships transporting coal do not cause large-scale pollution in the
event of capsizing or collision and there are fewer risks of fire.    

5

Table 3

Imports of coal from third countries (1000 t)

7117

8070

1409

1995

2737

1203

1214

1500

1337

1370

2132

2000

1999

1998

1993

1997

1994

2001*
1992
1996
11237
13147 11404 12087 13671 12465 12459 12370 12634 10085
B
6813
11789 10319 11544 12975 13116 13471
6412
DK
28325
14248 12627 13896 13891 15578 19031 20527 22280 27500
D
1235
1200
1778
EL
21623
13729 12293 11395 13595 11783 11045 14342 20198 21090
E
18177
21401 13900 11914 12790 11216 12437 17247 17491 18412
F
2689
2565
2578
IRL
18591
17557 14287 15889 18481 16540 15292 16565 17309 19004
I
124
114
107
L
19806
14661 14871 16746 17021 16644 20030 22078 19002 19000
NL
3615
3450
3637
3796
A
5685
5000
5349
4445
P
4824
4573
6866
4232
FIN
2976
3001
2963
3211
S
35305
19817 18078 14570 15612 17573 19370 20035 20758 23260
UK
EUR 15 146945 129118 130447 140306 138441 147036 151840 154687 164628 180925

3178
4762
5932
3189

2580
4990
7862
3024

2859
5711
5821
3459

3349
6080
3597
2930

3766
5758
6944
3246

3727
5113
4608
3012

2874

2690

2243

2744

2685

2384

253

251

207

107

153

99

91

Source: Eurostat; yearly (1992-1999) and monthly (2000); *=estimates

3. 

SITUATION IN EUROPEAN UNION COAL FIELDS

3.1. 

Germany

In  the  main  coal  producing  country  in  the  European  Union,  the  coal  industry  is  in  effect
concentrated in two fields, the Ruhr and the Saar. Following the merger9 of the three German
coal  producers  (Ruhrkohle  AG,  Saarbergwerke  AG,  Preussag  Anthrazit  GmbH),  a  single
entity,  Deutsche  Steinkohle  AG,  now  centralises  the  nation's  entire  coal  production.
Production  is  centred  on  12  pits,  employing  about  52 600  workers  at  the  end  of  2001,
including 24 300 underground.

On 13 March 1997, an agreement was signed between the German Government, the Länder
of  North  Rhine-Westphalia  and  Saarland,  the  trade  unions  and  the  coal  producers  on  the
future of the German coal industry. It provides for annual aid, currently standing at 9.2 billion
German  marks  (DEM),  to  be  reduced  progressively  to  5.5  billion  by  2005.  The  Federal
Government's share of the bill was to drop from DEM 7.7 billion in 1998 to DEM 3.8 billion
in  2005,  while  that  of  North  Rhine-Westphalia  would  increase,  rising  from  860  million  to
DEM  1  billion.  Saarland's  contribution  would,  as  in  the  past,  be  paid  by  the  Federal
Government. The plan announced by the companies involved reducing production by around
20% between 2000 and 2002 and cutting back the workforce to around 56 000. Subsequently,
production  would  be  brought  down  to  25  million  tonnes  in  2005  and  by  that  date  only  ten
mines and 36 000 workers would still be in service. In the course of 2000, in view of the fall
in coal prices to an all-time low and the steel industry's reduced demand for ore and coke, the
German  Government  decided  to  expedite  the  restructuring  process:  in  2000  mining  ceased
completely  in  three  pits  (Westfalen,  Göttelborn/Reden  and  Ewald/Hugo),  and  in  2001  the

9

See also section 5.2, Case T-156/98.

6

                                                
Auguste Victoria and Blumenthal/Haard mines were grouped together. In 2002, the Friedrich
Heinrich/Rheinland and Niederberg mines will also be grouped together and production will
be cut to 29 million tonnes. Following these restructurings, the costs of production, expressed
in  1992  prices,  should  fall  to  DEM  242  per  tce  (tonne  coal  equivalent)  in  2002,  compared
with  DEM  288/tce  in  1992.  This  is  still,  however,  way  out  of  line  with  prices  on  the
international markets, currently around DEM 92/tce.

3.2. 

Spain

In Spain, coal mining is spread over a number of fields: Asturias (Central and Western field),
Léon  (Bierzo-Villablino,  Sabero  and  Nord),  Palencia  (Guardo  and  Barruelo),  Cataluña
(Pirenaica), Teruel (Teruel-Mequinenza), Sud  (Puertollano and Peñaroya).  The  Spanish coal
fields  are  small,  geographically  isolated  areas  which  are  highly  dependent  on  coal  mining.
This  has  a  direct  effect  on  the  possibility  of  redeployment  and  reindustrialisation  and,
consequently,  on  the  employment  level.  A  plan  for  the  alternative  development  of  mining
communities was therefore provided along with the Spanish mining plan. Production is shared
among 52 undertakings, mostly private (following the recent privatisation of Endesa, the only
exception  is  Hunosa,  which  took  over  Minas  de  Figaredo  in  1998).  The  industry  employs
around  15 600  workers,  including  contract  workers.  Eight  companies  alone  produce  more
than  one  million  tonnes  annually  and  10  others  more  than  100 000  tonnes.  In  Decision
98/637/ECSC  of  3  June  1998,  the  Commission  approved  the  second  part  of  the  plan,
concerning  the  years  1998-2002,  to  modernise,  rationalise  and  restructure  the  coal  industry,
which involves cutting production annually to no more than 14.5 million tonnes by 2002.

3.3. 

France

In France, coal mining is now concentrated on the Lorraine coal field, with two underground
mines  in  operation  (Merlebach  and  La  Houve),  and  the  Centre-Midi  coal  field,  with  five
mines,  one  of  which  is  underground  (Gardanne,  in  Provence).  The  industry  employs  6 945
people,  2 981  of  whom  work  underground.  The  country's  only  producer,  Charbonnages  de
France, is a public sector undertaking. As part of the process of reducing production capacity
which  has  been  under  way  for  many  years  and  which  is  mainly  due  to  unfavourable
geological conditions, over 23 000 jobs were lost between 1986 and 2001. Under the National
Coal Pact agreed between the two sides of industry in 1995, this process will have to continue
over  the  next  few  years,  leading  to  the  complete  cessation  of  coal  mining  in  France  by  the
year  2005.  The  seriousness  of  the  social  and  regional  problems  has  prevented  the  French
Government from keeping to the 2002 deadline provided for in Decision No 3632/93/ECSC.
The main thing, however, is that the French authorities have recognised the total lack of any
prospect of the French coal industry becoming competitive in  the medium or long term  and
are  firmly  committed  to  a  reduction  of  activity  and  programmed  closures.  According  to
Charbonnages  de  France,  the  cost  of  production  is  FRF  1 267  per  tonne,  compared  with  a
market  price  of  FRF  335.  A  recent  Court  of  Auditors  report  urged  the  government  to
implement the mine closure programme without delay, with reference to the FRF 233 billion
paid out between 1970 and 2000.

3.4. 

United Kingdom

For  many  years,  the  United  Kingdom  was  the  European  Union's  largest  coal  producer.  The
sector has gone through a drastic restructuring process, particularly  with the  privatisation of
the  British  Coal  Corporation  in  1994,  as  a  result  of  which  the  number  of  large  collieries  in
operation has fallen from 241 in 1976 to the current 18. There are also around 50 small mines
(employing fewer than 100 persons) and a variable number of open-cast workings. Over the

7

same period, the number of workers has dropped from over 300 000 to 12 712 at the end of
2001  (including  9  294  underground)  and  production  from  125  million  tonnes  to  around  32
million tonnes.

Since  the  privatisation  of  British  Coal  on  31  December  1994,  the  UK  coal  industry  has
consisted  solely  of  private  undertakings.  The  largest  is  UK  Coal  plc10  (13  pits  in  total:
Clipstone,  Daw  Mill,  Ellington,  Harworth,  Kellingley,  Maltby,  Rotherham  Prince  of  Wales,
Riccall/Whitemore  Mine,  Rossington,  Stillingfleet  Combine,  Thoresby,  Welbeck,  Wistow
Mine11), while Betws Anthracite, Hatfield Coal Company, Goire Tower Anthracite Company,
Scottish Coal and Blenkinsopp Collieries have one pit each. Celtic Energy operates a number
of open-cast workings. Thanks to the concentration of activity on the most productive mines
and  strenuous  and  protracted  efforts  to  increase  viability,  these  companies  have  production
costs  very  close  to  prices  on  the  world  market.  Despite  considerable  improvements  in
productivity,  however,  the  coal  companies  are  now  facing  competition  from  imported  coal
and, above all, from gas. Imported coal, apart from its more competitive price, often has the
advantage  of  a  lower  CO2  content,  which  enables  the  electricity  generating  companies  to
comply more easily with the stringent restrictions on emissions, while gas not only produces
fewer  pollutants,  but  also,  with  the  new  combined  cycle  gas  turbine  technology  (CCGT),
enables over 50% efficiency to be achieved in converting thermal energy into electricity, with
a  relatively  small  investment.  In  1999  and  2000,  the  situation  has  become  increasingly
critical, due both to the widespread drop in  coal prices on the  international  markets  and  the
high value of the pound sterling, and the imminent expiry of a moratorium on consents for the
construction  of  new  gas-fired  generating  stations  was  expected  to  exacerbate  the  situation.
The British Government, considering that the problems of the national coal industry were of a
temporary  nature  and  that  there  was  still  a  realistic  prospect  of  achieving  a  return  to
satisfactory  viability  in  the  medium  term,  by  letter  of  26  July  2000  sent  notification  of  a
modernisation,  rationalisation  and  restructuring  plan  for  the  UK  coal  industry  and  the  UK
Coal Operating Aid Scheme, covering the period from 17 April 2000 to 23 July 2002. On 15
November  2000,  the  European  Commission  approved  the  above-mentioned  modernisation,
rationalisation  and restructuring  plan for  the  UK coal industry,  which  provides  for  financial
aid to the coal industry up to a total amount of no more than GBP 110 million. Later on, an
increase to GBP 170 million was authorised. The purpose of the aid is to make the production
units competitive following the expiry of the ECSC Treaty. At the same time, the Secretary of
State for Trade and Industry announced that the government was lifting the moratorium on the
construction of new gas-fired generating stations and giving the green light to six new power
stations.

3.5. 

Others

Coal production ceased in Belgium in 1992 and in Portugal in 1994. There is no significant
production in any other European Union country.

4. 

FINANCIAL AID SCHEDULED FOR THE COAL INDUSTRY

This report covers the measures set out in Article 1 of Decision No 3632/93/ECSC, viz.:

– 

any direct or indirect measure or support by public authorities linked to production,
marketing  and  external  trade  which,  even  if  it  is  not  a  burden  on  public  budgets,

10

11

Formerly RJB Mining.
The Riccall/Whitemore, Stillingfleet and Wistow pits are also known as the 'Selby Complex'.

8

                                                
gives an economic advantage to coal undertakings by reducing the costs which they
would normally have to bear;

– 

– 

the  allocation,  for  the  direct  or  indirect  benefit  of  the  coal  industry,  of  the  charges
rendered compulsory as a result of State intervention, without any distinction being
drawn between aid granted by the State and aid granted by public or private bodies
appointed by the State to administer such aid;

aid elements contained in financing measures taken by Member States in respect of
coal undertakings which are not regarded as risk capital provided to a company under
standard market-economy practice.

This  report  classifies  aid  according  to  the  categories  used  in  Articles  3,  4,  5,  6  and  7  of
Decision No 3632/93/ECSC, i.e. distinguishing between operating aid, aid for the reduction of
activity,  aid  to  cover  exceptional  costs,  aid  for  research  and  development  and  aid  for
environmental protection.

For  all  requests  for  authorisation  it  approved  in  accordance  with  Article  9  of  Decision  No
3632/93/ECSC, the Commission checked that the Member States concerned had provided all
the required information and, on the basis of that information, that the measures were in line
with the general  criteria  and  objectives  laid  down  in  Article  2  of  the  Decision  and  with  the
specified criteria, viz.:

– 

– 

– 

Aid granted under Article 3: this must not exceed the difference between production
cost and the price on the international market; coal may not be placed on the market
at  a  price  lower  than  that  charged  for  coal  of  a  similar  quality  produced  in  third
countries;  the  aid  must  not  distort  competition  between  users;  principle  of  annual
correction.

Aid granted under Article 4: requirement to present and respect a closure plan.

Aid  granted under Article 5:  this must  not  exceed  the  costs  it  is  intended  to  cover;
strictly  limited  to  the  costs  expressly  mentioned  in  the  Annex  to  Decision  No
3632/93/ECSC.

When  assessing  aid,  the  Commission  took  full  account  of  the  need  to  mitigate  as  far  as
possible  the  social  and  regional  consequences  of  the  restructuring  of  mining  activity,  in
accordance with the second indent of Article 2(1) of Decision 3632/93/ECSC. It also checked
that the aid was compatible with the proper functioning of the common market.

A breakdown of the overall amount of  aid  granted  by  the  Member  States  spread  over  these
different categories also gives a fairly clear idea of the coal policy being pursued at national
level  and  of  the  progress  being  made  in  the  modernisation,  rationalisation  and  restructuring
process.  Finally,  we would reiterate that aid for  various purposes,  such  as,  for  example,  the
specific social benefits paid by the Member States as part of the special contribution provided
for under Article 56 of the ECSC Treaty is not included.

9

Table 4

Aid authorised 1994-2001

Germany
- operating aid*
- aid for the reduction of activity**
- other***
Spain
- operating aid*
- aid for the reduction of activity**
- other***
France
- operating aid*
- aid for the reduction of activity**
- other***
Portugal
- operating aid*
- aid for the reduction of activity**
- other***
United Kingdom
- operating aid*
- aid for the reduction of activity**
- other***
EU TOTAL
- operating aid*
- aid for the reduction of activity**
- other***
Aid in €/ecu/tonne
- operating aid*
- aid for the reduction of activity**

1994

1995

1996

1997

1998

1999

2000

2001

124845.8
0.0
181.4

4784.2
0.0
106.7

135361.8
0.0
104.7

3280.5
1637.7
412.0

2667.2
1606.8
513.4

2665.9
1646.4
388.2

2003.2
1604.4
1086.0

1789.5
965.8
1400.9

249.1
499.9
205.6

0.0
298.0
614.8

0.0
1.8
3.6

20.1
0.0
870.0

5115.0
799.7
1875.4

298.8
501.3
255.3

0.0
56.9
612.3

0.0
0.0
0.9

0.0
0.0
1622.8

5081.0
558.1
2595.7

310.3
462.8
255.1

0.0
87.6
592.3

0.0
0.0
0.9

0.0
0.0
512.8

5673.4
550.4
1465.8

285.4
419.1
363.8

0.0
371.1
585.1

0.0
0.0
0.0

0.0
0.0
512.3

3565.9
2427.9
1861.6

355.6
403.2
400.5

0.0
383.7
614.9

0.0
0.0
0.0

0.0
0.0
1317.2

3022.7
2393.7
2846.0

327.8
399.6
343.9

0.0
354.3
630.4

0.0
0.0
0.0

0.0
0.0
0.0

2993.7
2400.2
1362.5

292.7
405.6
422.8

0.0
389.6
620.6

0.0
0.0
0.0

142.9
0.0
0.0

2438.8
2399.7
2129.5

274.3
350.2
444.6

0.0
318.6
642.3

0.0
0.0
0.0

81.3
0.0
0.0

2145.1
1634.6
2487.8

68.31
71.90

42.57
53.35

51.33
51.30

35.73
135.76

34.56
152.09

34.95
155.65

34.42
159.87

37.14
125.25

Figures  expressed  in  million  ecus/euros;  State  aid  authorised  in  national  currency  has  been  converted  into
ecus/euros at the average exchange rate for the reference year.
*:Aid granted under Article 3 of Decision No 3632/93/ECSC.
**:Aid granted under Article 4 of Decision No 3632/93/ECSC.
***:Inherited liabilities under Decision No 2064/86/ECSC and aid granted under Articles 5, 6 and 7 of Decision
No 3632/93/ECSC.

Compared with 1994, there was a certain reduction in production-related aid per tonne of coal
extracted, at least, which is in line with the  degression  principle established in  Decision  No
3632/93/ECSC. The increasing deployment of aid for  the  reduction of  activity,  on the other
hand,  has  caused  the  overall  total  to  rise,  reducing  the  true  significance  of  this  result.  The
possibility  of  a  Community  coal  industry  which  can  compete  commercially  on  the
international markets appears more and more to be receding, despite the considerable efforts
made  by  producers  on  both  the  technological  and  organisational  fronts  to  improve
productivity. There are two main reasons for  this  result. The first  is that, as  the  most  easily

12

13

No account taken of the activation of DM 5 350 million (ECU 2 779 million) from a credit line to cover
compensation fund debts under the German law of 19 July 1994 guaranteeing coal supplies for power
stations.
Aid originally authorised for ECU 5 370.2 million, but DM 3.75 million used by Sophia Jacoba GmbH
and DM 9.8 million by Preussag Anthrazit GmbH in breach of the Decision.

10

                                                
accessible seams are exhausted, the coal has to be mined in increasingly difficult  geological
conditions  and at  greater  and  greater depths, in some  cases  exceeding  1 500  metres.  This  is
exacerbated  by  more  stringent  regulations  on  mining  health  and  safety  and  environmental
protection, application of which has inevitably increased costs, with the result that, over the
reference period, production costs have not fallen as anticipated. Secondly, even if the price of
coal  on  the  international  markets  has  risen  considerably  during  the  last  year,  there  is  still  a
large difference between production costs in the EU countries and the price of imports. This is
due to various reasons. Several non-European producers already operating on the international
markets,  for  example,  have  adopted  more  efficient  extraction  methods,  assisted  by  more
favourable geological conditions; others, such as China, which in the past produced only for
the  domestic  market,  have  begun  to  export  coal,  adopting  aggressive  marketing  policies.
Finally,  the  specific  economic  situation  in  other  traditionally  exporting  countries,  such  as
Indonesia  and  South  Africa,  where  the  national  currencies  are  undergoing  substantial
devaluation and there is an urgent need to obtain hard currency, and the low price of natural
oil and gas, have put strong pressure on prices to drop.

In short, the gap between production costs in the Community  coal industry and  the  price of
coal  on  the  international  markets,  which  is  the  main  basis  for  calculating  State  aid,  has
narrowed slightly during the last year, but is still very wide.

In practice, significant reductions have been seen in Portugal, where mining activities ceased
completely  at  the  end  of  1994,  and  in  the  United  Kingdom  which,  while  maintaining  a
considerable degree of mining activity, has cut production drastically, keeping open only the
most  profitable  mines.  Of  particular  note  is  the  position  of  France,  which  aims  to  cease  all
mining activity by 2005. Even if Germany and Spain have not taken a final decision and are
adopting  a  more  cautious  approach,  those  two  countries  are  also  making  substantial
restructuring efforts dictated by social and regional concerns rather than any kind of realistic
prospect of their coal industry achieving economic equilibrium.

The aid granted by the various Member States is described in detail below.

4.1. 

Germany

to  maintain  an  underground 

Germany's  aid  to  the  coal  industry  under  Article  3  of  Decision  No  3632/93/ECSC  was
restricted, as from 1996, to aid for coking coal intended for the steel industry, aid for steam
labour  force
coal  for  electricity  generation,  and  aid 
(Bergmannsprämie). Such aid is meant to cover the difference between production costs and
selling prices freely negotiated on the basis of conditions prevailing on the world markets for
coal of a similar quality originating  in  non-member  countries. Consequently,  production  for
domestic  and  industrial  consumption  must  be  sold  at  prices  which  cover  production  costs.
This aid was approved by the Commission, which took due account of the social and regional
impact of the restructuring of the coal industry. The unemployment rate in the affected areas
is indeed considerably  higher than in the rest of the  country. These  areas  are  also  generally
eligible for aid from the regional development fund, under the Objective No 2 priorities. This
aid has been entered in the federal budget and thus meets the requirements of Article 2(2) of
Decision No 3632/93/ECSC.

11

For 2001, the Commission authorised DEM 9 180 million (EUR 4 693.7 million) in aid to the
coal industry (under Articles 3, 4 and 5 of Decision No 3632/93/ECSC), the most important
destinations of which were:

– 

– 

– 

– 

a) DEM 3 847 million (EUR 1 966.9 million) in operating aid under Article 3;

b)  DEM  3 138  million  (EUR  1 604.4  million)  in  aid  for  the  reduction  of  activity
under Article 4;

c) DEM 71 million (EUR 36.3 million) under the system to maintain an underground
labour force (Bergmannsprämie) under Article 3;

d)  DEM  2 124  million  (EUR  1 086  million)  under  Article  5  to  cover  exceptional
costs.

The  subsidies  in  (a),  totalling  DEM  3 847  million,  were  intended  to  cover  the  difference
between  production  costs  and  the  selling  price  on  the  world  market  for  coal  of  a  similar
quality from third countries. The above aid was to be allocated only to cover losses incurred
in those production areas meeting the criteria of making progress towards achieving economic
viability in the medium term, as stipulated in the first indent of Article 2(1) and in Article 3 of
Decision No 3632/93/ECSC.

The DEM 3 138 million in aid for the reduction of activity, in (b), was paid to the Westfalen,
Göttelborn/Reden  and  Ewald/Hugo  sites,  which  were  closed  down  in  2000,  the  Auguste
Victoria and Blumenthal/Haard sites which are due to be regrouped and partially closed down
in 2001, and the Friedrich Heinrich/Rheinland and Niederberg mines which are to undergo the
same in 2002. Finally, the aid will cover the losses incurred at sites scheduled for closure after
2002.

The DEM 71 million referred to in (c), intended to finance the Bergmannsprämie supplement
of  DEM  10  per  shift  worked  underground,  is  an  incentive  measure  to  encourage  skilled
mining  personnel  to  work  underground  and  help  rationalise  production.  It  indirectly  covers
part of the difference between the cost of production and foreseeable income. What is more,
this aid reduces the cost of production by that amount and must therefore be examined in the
light of Article 3 of Decision No 3632/93/ECSC.

The DEM 2 124 million in aid, referred to in (e), was to cover restructuring costs not linked to
current  production  (inherited  liabilities),  such  as  social  security  benefits  payable  to  workers
forced to take early retirement, other exceptional costs, supply of free  coal to workers made
redundant as a result of restructuring and  rationalisation and payment of allowances outside
the statutory system to workers made redundant as a result of restructuring and rationalisation
and those entitled to such benefits prior to restructuring. On the technical and financial side,
the  aid  is  intended  for  the  supplementary  safety  measures  needed  underground  and  the
exceptional intrinsic depreciation resulting from the restructuring of the industry. This aid is
also granted pursuant to Article 5 of Decision No 3632/93/ECSC and is explicitly mentioned
in Title II, paragraphs a), b), c), d), f) and k) of the Annex to this Decision.

The increase in the allocation in relation to the previous year may be explained by the closure
of three production sites mentioned above, Westfalen, Göttelborn/Reden and Ewald/Hugo, in
the course of the year.

12

4.2. 

Spain

For 2001, the Commission authorised  ESP  186 541 million (EUR  1 121.1 million)  in  aid to
the  coal  industry  (under  Articles  3,  4  and  5  of  Decision  No  3632/93/ECSC),  the  most
important destinations of which were:

– 

– 

– 

– 

ESP 45 636 499 056 million (EUR 274 280 883.34) in operating aid under Article 3;

ESP 58 271 million (EUR 350 215 763.35) for the reduction of activity under Article
4;  the  authorised  amount  of  ESP  58  271  will  be  deducted  from  any  compensation
which  may  by  paid  to  Hunosa  as  tax  credit  on  company  tax  following  the
consolidation of the balance sheets of the undertakings incorporated in Sepi;

ESP  59 507  million  (EUR  357  644  272.96)  under  Article  5,  aimed  at  financing
exceptional  welfare  benefits  payable  to  workers  made  redundant  as  a  result  of
modernisation, rationalisation, restructuring and reduction of activity in the Spanish
coal industry;

ESP  14 475  million  (EUR  86  996  502.11)  under  Article  5  to  cover  exceptional
technical  costs  occasioned  by  pit  closures  under  the  measures  to  modernise,
rationalise, restructure and reduce the activity of the Spanish coal industry.

The  Commission  will  take  a  decision  on  the  following  amounts  at  a  later  date  when  it  has
received the additional information it has asked Spain to provide:

– 

– 

– 

operating aid of ESP 1 115 500 944 (EUR 6 704 295.70) under Article 3 of Decision
No 3632/93/ECSC for González y Díez, SA;

aid  for  the  reduction  of  activity  of  ESP  6 000 million  (EUR 36 060 726.26)  under
Article  4  of  Decision  No 3632/93/ECSC  for  Hunosa  and  ESP 287 million
(EUR 1 724 904.74) for Minas de la Camocha SA;

aid of ESP 14 475 million (EUR 86 996 502.11), ESP 4 795 for Hunosa and ESP 394
million for González y Díez, SA to cover exceptional welfare aid under Article 5 of
Decision No 3632/93/ESSC.

The ESP 45 636 499 056 million (EUR 274 280 883.34) in operating aid is intended to cover
the  operating  losses  of  42  coalmining  companies  accounting  for  an  overall  production  of
10 706 900 million tonnes in 2001. The mean production cost in 1999, at 1992 prices, of the
undertakings receiving aid under Article 3  of Decision  No 3632/93/ECSC is EUR 73.37/tce,
broken down as follows:

– 

– 

– 

– 

4.23% of production at costs below EUR 60/tce

52.72% of production at costs between EUR 60 and 79/tce

29.39% of production at costs between EUR 80 and 99/tce

13.66% of production at costs above EUR 100/tce.

13

The  Commission  has  noted  that  the  downward  trend  of  production  costs  at  1992  prices
observed  during  the  period  1994-1999  will  continue  in  2001.  The  reduction  envisaged  for
2001, compared with 1994, will be 18.5% at 1992 prices.

The aid to reduce activity totalling ESP 58 271 million (EUR 350 215 763.35) is intended to
cover the operating losses of the undertakings listed in the footnote which have been included
in  closure  and/or  action-reduction  plans  in  conformity  with  Article 4  of  Decision
No 3632/93/ECSC.14  The  total  production  to  be  covered  by  the  aid  to  reduce  activity  is
3 200 200 tonnes annual capacity.

The aid of ESP 59 507 million (EUR 357 644 272.96) is intended to cover, with the exception
of  the  costs  for  the  payment  of  social  welfare  benefits  borne  by  the  State  as  a  special
contribution  pursuant  to  Article  56  of  the  Treaty,  compensation  paid  to  workers  in  Spanish
coal undertakings who have had or will have to take early  retirement or have lost their jobs
under  the  modernisation,  rationalisation,  restructuring  and  activity-reduction  plan  for  the
Spanish  coal  industry.  Part  of  this  aid,  totalling  ESP  37 507  million  (EUR 225 421 609.99),
will  be  granted  to  Hunosa  to  cover  the  cost  of  workers  who  took  early  retirement  before
1 January 2001  and  about  500 workers  who  will  retire  in  2001.  This  part  of  the  aid  will  be
granted  to  Hunosa  via  Sepi.  The  remaining  ESP 22 000  million  (EUR 132 222 662.96)  is
intended  to  cover  compensation  for  some  7 200  workers  in  other  undertakings  in  early
retirement  at  the  end  of  2001  as  a  result  of  the  modernisation,  rationalisation,  restructuring
and activity reduction measures.

The  aid  of  ESP 14 475  million  (EUR 86 996 502.11)  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 
totalling  ESP 5 193  million
(EUR 31 210 558.60),  is  intended  for  Hunosa  and  will  be  granted  via  Sepi.  The  remaining
sum, totalling ESP 9 676 million  (EUR 58 153 931.22), concerns the other undertakings that
are restructuring or reducing their activity.

industry.  Part  of 

this  aid, 

the  coal 

4.3. 

France

For 2001,  the  Commission authorised FRF  6 503  million  (EUR  991.4  million)  in  aid  to  the
coal  industry  (under  Articles  4  and  5  of  Decision  No  3632/93/ECSC),  the  most  important
destinations of which were:

– 

a  maximum  of  FRF  2080  million  (EUR  317.1  million)  in  aid  for  the  reduction  of
activity, intended to cover operating losses;

14

Hunosa  ESP 53 513 million  (EUR 321 619 607.42),  Minas  de  la  Camocha  SA  ESP 4 743 million
(EUR 28 506 004.11), the underground  workings  of  Endesa  ESP 635 million  (EUR 3 816 426.86),  the
underground workings of Encasur ESP 328 million (EUR 1 971 319.70, Antracitas de Guillón ESP 782
million (EUR 4 699 914.66), Coto Minero Jove SA ESP 667 million (EUR 4 008 750.740), Industrial y
Comercial Minera SA (Incomisa) ESP 144 million (EUR 865 457.43), Mina Escobal SL ESP 51 million
(EUR 306 516.17),  Minas  de  Escucha  SA  ESP 351 million  (EUR 2 109 552.49),  Minas  de  Valdeloso
SL  ESP 120  million  (EUR 721 214.53),  Promotora  de  Minas  de  Carbón  SA  ESP 298  million
(EUR 1 791 016.07) and Virgilio Riesco SA ESP 186 million (EUR 1 117 882.51). The remaining sum
of  ESP 2 740 million  (EUR 16 467 731.66)  is  intended  for  13 undertakings  which  are  reducing
production capacity.

14

                                                
– 

– 

a  maximum  of  FRF  210  million  (EUR  32.0  million)  in  aid  for  the  reduction  of
activity,  intended  to  cover  the  interest  due  for  2001  on  the  part  of  the  loan  issue
floated by Charbonnages de France in 1997, 1998 and 1999 to cover the balance of
the  operating  losses  for  those  years  which  are  not  covered  by  direct  subsidies  and
capital injections;

a maximum  of FRF 4 213 million (EUR  642.3  million)  in  aid  to  cover  exceptional
losses, allocated as follows:

– 

– 

– 

– 

– 

– 

– 

FRF 1 021 million towards the cost of paying social-welfare benefits resulting
from the pensioning-off of workers before they reach statutory retirement age;

FRF 91 million as other exceptional expenditure on workers losing their jobs as
a result of restructuring and rationalisation;

FRF  84  million  towards  residual  costs  resulting  from  administrative,  legal  or
tax provisions;

FRF 382 million towards additional work resulting from restructuring;

FRF  10  million  towards  mining  damage  attributable  to  pits  previously  in
service;

FRF  1  million  towards  exceptional  intrinsic  depreciation  resulting  from  the
restructuring of the industry;

FRF  2  624  million  towards  the  increase  in  the  contributions,  outside  the
statutory system, to cover social security costs as a result of the drop, following
restructuring, in the number of contributors.

4.4. 

United Kingdom

For  2001,  in  accordance  with  the  UK  Coal  Operating  Aid  Scheme  referred  to  in  paragraph
3.4, the Commission authorised a total of GBP 50.6 million (EUR 81.3 million) in aid to the
coal industry (under Article 3 of Decision No 3632/93/ECSC). This aid is meant to cover the
difference  between  production  costs  and  selling  prices  prevailing  on  the  world  markets  for
coal of a similar quality originating in non-member countries.

This aid was allocated to the following mines:

– 

– 

– 

– 

– 

– 

GBP 21.525 million to the Longannet colliery, run by Mining (Scotland) Ltd,

GBP 20.325 million to the Selby colliery, run by UK Coal Plc,

GBP 3.807 million to the Hatfield colliery, run by Hatfield Coal Company Ltd,

GBP 1.996 million to the Betws colliery, run by Betws Anthracite Co;

GBP 1.168 million to the Blenkinsopp colliery, run by Blenkinsopp Collieries Ltd,

GBP 1.031 million to the Aberpergwm colliery, run by Mining (Scotland) Ltd,

15

– 

– 

– 

GBP 286 000 to the Eckington colliery, run by Moorside Mining Company Ltd,

GBP 264 000 to the Hay Royds colliery, run by J. Flack & Sons Ltd,

GBP 217 000 to the Blaentillery No 2 colliery, run by Ffynonau Duon Mines Ltd.

5. 

LEGAL DISPUTES

No new legal actions were recorded in the course of the year in question. The state of progress
in ongoing cases is outlined below.

5.1. 

Complaints

On 26 August 1997 the Commission registered a complaint (ref. 97/4717) from five  French
undertakings15  including  Thion  et  Cie,  against  the  public  undertaking  Charbonnages  de
France, concerning the alleged misuse of State aid it had received. On 9  February 1999, the
Commission  forwarded  to  the  French  Government  a  letter  of  formal  notice16  pursuant  to
Article  88  of  the  ECSC  Treaty  concerning  State  aids  paid  since  1994.  The  French
Government set out its arguments in a letter dated 8 April 1999. In the context of this dispute,
the Commission  authorised the  aid notified by  France  for  2001,  except  as  regards  a  sum  of
EUR 1.5 million (FRF 10 million) on which the Commission must take a decision, expected
during the first half of 2002, when the complaint has been examined.

On  26  October  2000,  16  November  2000  and  1  March  2001,  the  Commission  registered  a
complaint  (ref.  2000/51839  calling  for  explanations  as  to  the  destinations  of  the  aid  for
payments to 357 workers of the former Minas de Lières SA (Milsa) undertaking and the aid
granted to cover the technical costs of closing down that undertaking. In a further letter, one
of the complainants demanded the right  to receive the benefit  in  kind of coal for  household
use. The complainants also alleged that the mine covered by the closure measures  had  been
reopened by Hunosa.

The  complainants  based  their  application  on  the  1991-1993  restructuring  plan  notified  by
Spain,  which  provided  for  the  total  closure  of  Milsa.  It  is  in  this  context  that  the  aid  was
authorised and granted. Now, several months later, the mines have been reopened by Hunosa
with major operating losses.

The  information  which  the  Commission  asked  Spain  to  provide  shows  that  the  aid  granted
during  the  closure  of  Milsa  in  1992-1993  was  used  in  accordance  with  the  requirements  of
Decisions  91/599/ECSC  of  17  December  1990  and  93/146/ECSC  of  23  December  1992
which authorised it.

The  Commission  has  however  asked  Spain  for  additional  information  about  any  aid  which
might have been paid to Hunosa to cover operating losses during the years 1998-2001 and the
technical costs of the final closure which took place during the second half of 2001.

15

16

Thion  &  Cie,  Maison  Balland  Brugneaux,  Société  Nouvelle  Vinot  Postry,  Établissements  Lekieffre,
Charbogard.
OJ C 99, 10.4.1999, p. 9.

16

                                                
5.2. 

Appeals

The British company RJB Mining Plc lodged an appeal with the Court of First Instance of the
European Communities against certain Commission Decisions, viz.:

– 

– 

– 

– 

– 

Case T-111/98 against Decision Nos 98/635/ECSC, 98/636/ECSC and 98/637/ECSC
of  3  June  1998  on  the  authorisation  of  State  aids  to  the  Spanish  coal  industry  for
1994,  1995,  1996,  1997  and  1998.  Proceedings  are  currently  stayed  pending  a
decision in Case C-427/99P.

On  31  January  2001,  the  Court  of  First  Instance  in  Luxembourg  annulled  the
Commission  Decision  of  29  June  1998  authorising  the  amalgamation  of  the
undertakings  RAG,  Saarbergwerke  and  Preussag  Anthrazit  (Case  T-156/98).
According to the Court, the Commission, wrongly, did not assess the transaction cost
and,  more  specifically,  whether,  and  to  what  extent,  the  financial  support  possibly
linked  to  the  transaction  cost,  a  token  sum,  boosted  RAG's  financial  and  hence  its
commercial strength. RAG had in fact bought Saarbergwerke back for the token sum
of  DEM  2.  On  12  and  19  April  2001,  the  Federal  German  Government  and  RAG
appealed  against 
the
amalgamation  of  the  above  undertakings  is  planned  for  2002.  In  parallel  with  this
procedure relating to an amalgamation, the Commission sent a letter of former notice
dated 4 February 2000 to the German Government concerning the possible grant of
State  aid in the  framework of the RAG/Saarbergwerke  amalgamation.  The  German
Government replied on 5 May 2001, stressing that the repurchase of Saarbergwerke
by  RAG  for  DEM  2  did  not  contain  any  element  of  State  aid.  A  Commission
Decision  on  the  State  aid  component  of  the  amalgamation  of  the  abovementioned
undertakings in expected in 2002.

judgment.17  A  further  Commission  Decision  on 

the 

On 12 July 2001, the Court of First Instance in  Luxembourg ruled on Joined Cases
Case  T-63/99  and  T-12/99,18  rejecting  the  applicant's  appeals  for  annulment  of
Commission  Decision  Nos  99/2707ECSC19  and  99/299/ECSC.20  This  Decision
confirms the position of the Court of First  Instance in its judgment  of  9  September
1999  in  Case  T-110/98  in  which  it  rejected  the  applicant's  appeal  for  Decision  No
98/687/ECSC to be annulled.21

Case  T-170/99  against  Decision  No  99/451/ECSC  of  4  May  1999  on  the
authorisation  of  State  aids  to  the  Spanish  coal  industry  for  1999.  Proceedings  are
currently stayed pending a decision in Case C-427/99P.

Case C-427/99P - the applicant appealed to the Court of Justice against the judgment
of  the  Court  of  First  Instance  in  Case  T-110/98.  The  case  is  currently  before  the
Court of Justice.

17

18

19

20

21

Cases C-157/01 and C-169/01 P.
UK Coal plc, formerly RJB Mining, v the Commission
Decision of 2 December 1998 on the authorisation of State aids to the German coal industry for 1998.
Decision of 22 December 1998 on the authorisation of State aids to the German coal industry for 1999.
Decision  No  98/687/ECSC  of  10  June  1998  on  the  authorisation  of  State  aids  to  the  German  coal
industry for 1997.

17

                                                
– 

Case C-371/00P - the applicant appealed to the Court of Justice against the ruling of
the  Court  of  First  Instance  of  25  July  2000  in  Case  T-110/98  concerning  the
annulment of Commission Decision 98/687/ECSC. The case is currently before  the
Court of Justice.22

6. 

CONCLUSIONS

With the ECSC Treaty and the last of the ECSC schemes for State aid to the coal industry due
to expire soon,23 this would seem to be a good time to describe the role of these aid schemes
in achieving the aims laid down by the ECSC Treaty and to consider the future of coal in the
framework of the ambitious goals set for it by the EU.

The  European  Commission  and  the  Member  States  have  worked  together  to  meet  the
objectives of the ESCS Treaty and the State aid schemes have played a very important part in
managing the structural changes which have characterised the development of the Community
coal  industry.  The  ECSC  Treaty  and  the  aid  schemes  have  made  it  possible  to  adapt
Community  coal  to  an  increasingly  competitive  and  diversified  energy  market,  while
preserving economic and social cohesion for workers in the industry and the regions in which
collieries  are  located.  Social  dialogue  has  been  one  of  the  characteristics  of  the  ECSC
industries and the ECSC Consultative Committee has made a major contribution to it.

With  the  ECSC  Treaty  shortly  about  to  expire,  only  five  Member  States  still  produce  coal:
Germany, United  Kingdom, Spain,  France  and,  to  a minor extent,  Italy.  Enlargement  of  the
European  Union  towards  Central  and  Eastern  Europe  will,  however,  bring  in  two  big  new
producers: Poland, which currently produces more than the 15 Member States of the EU put
together,  and  the  Czech  Republic.  Other  candidate  countries,  in  particular  Estonia,  also
produce solid fuels, mostly lignite and oil shales.

Thanks to the restructuring, modernisation and rationalisation efforts accomplished during the
period  in  which  Decision  No  3632/93/ECSC  has  been  in  force,  part  of  the  Community
industry, essentially the UK coalfields, have achieved economic viability or are at least close
to it. However, most Community coal production is not competitive with imports from third
countries and with other energy products. Poland and the Czech Republic have also achieved
economic viability, but the foreseeable increase in labour costs in future could make further
restructuring necessary.

On 25 July 2001, the European Commission  approved  a Council Regulation on State  aid to
the  coal  industry  aimed  at  maintaining  access  to  coal  reserves  as  part  of  the  process  of
ensuring  security  of  energy  supply.  This  aim,  which  justifies  maintaining  subsidised
Community coal production, must be achieved on acceptable economic terms.  It means  that
the restructuring and activity-reduction in the coal industry which have the main feature of the
State aid schemes implemented under the ECSC Treaty will have to continue beyond 23 July
2002.

22

23

The  ruling  followed  an  appeal  by  UK  Coal  which  considered  that  some  elements  of  its  appeal  in
Case T-110/98 had not been considered by the Court.
Decision  No  3632/93/ECSC  of  28  December  1993  establishing  Community  rules  for  State  aid  to  the
coal industry, OJ L 329, 30.12.1993, p.12.

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