Proposal for a COUNCIL DECISION Amending Decision 2003/76/EC establishing the measures necessary for the implementation of the Protocol, annexed to the Treaty establishing the European Community, on the financial consequences of the expiry of the ECSC Treaty and on the Research Fund for Coal and Steel
Date: 2020-07-16
Institutions: Directorate-General for Research and Innovation, European Commission
Subjects: ECSC, ECSC Treaty, EU environmental policy, coal, fund (EU), protocol to an agreement, research and development, research expenditure (EU), research programme, steel

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   EUROPEAN COMMISSION  Brussels, 16.7.2020  COM(2020) 319 final 2020/0142 (APP)  Proposal for a COUNCIL DECISION Amending Decision 2003/76/EC establishing the measures necessary for the implementation of the Protocol, annexed to the Treaty establishing the European Community, on the financial consequences of the expiry of the ECSC Treaty and on the Research Fund for Coal and Steel  
 
EXPLANATORY MEMORANDUM 

1. 

• 

CONTEXT OF THE PROPOSAL 

Reasons for and objectives of the proposal 

The  European  Union  ratified  the  Paris  Agreement  on  4  October  2016  committing  to 
contribute  holding  global  temperature  increase  to  well  below  2°C  and  to  pursue  efforts  to 
limit  it  to  1.5°C.  Following  this  international  obligation,  the  EU  together  with  its  Member 
States has agreed to fix ambitious set of targets to reduce greenhouse gas emissions of 80 % to 
95% by 2050 and of 40% by 2030. 

In November 2018, the Commission presented its strategic long-term vision for a prosperous, 
modern,  competitive  and  climate-neutral  economy  by  2050  -  A  Clean  Planet  for  all1.  In  its 
Communication  -  following  the  invitations  by  the  European  Parliament  and  the  European 
Council,  the  Commission  outlined  a  number  of  measures,  among  which  to  explore  how  the 
assets of the European Coal and Steel Community in liquidation could support breakthrough 
technologies for near zero carbon steelmaking. 

In line with its long-term vision, the Commission published on December 2019 the European 
Green  Deal  Communication2.  Among  the  measures  to  take,  the  Commission  put  the 
decarbonisation of the steel sector high in the political agenda and it is committed to explore 
whether part of the funding under the European Coal and Steel Community in liquidation can 
be used to support near zero carbon steel-making processes by 2030. Europe needs between 
€175 to €290 billion additional yearly investments in the next decades. In this context, within 
the Green Deal Investment Plan, the Commission suggests the revision of the Research Fund 
for Coal and Steel legal bases to incentivise private capital to flow to green projects.  

The Research Programme of the Research Fund for Coal and Steel (RFCS) is an EU funding 
programme  that  finances  research  projects  in  coal  and  steel  sectors.  The  RFCS  has  its  own 
legal  bases  standing  outside  the  Multiannual  Financial  Framework.  After  the  expiry  of  the 
European Coal and Steel Community (ECSC) Treaty in 2002 and under Protocol 37 annexed 
to  the  EU  Treaties,  the  Member  States  established  the  new  “Research  Fund  for  Coal  and 
Steel” (RFCS) as a continuation of the European Coal and Steel Community Coal and Steel 
Research and Technical Development Programmes. The RFCS Research Programme used to 
provide annually around EUR 40 million of research and innovation funding to sectors related 
to coal and steel (with a distribution of 27,2 % for coal and 72,8 % for steel) bringing together 
industrial  partners,  SMEs,  leading  research  centres  and  universities  across  the  European 
Union  to  develop  knowledge  and  foster  innovation.  Its  activities  are  funded  by  the  revenue 
generated by the assets of the ECSC in liquidation, in accordance with paragraph 2 of Article 
1 of Protocol 37. In order to reduce as far as possible, the fluctuations that movements in the 
financial  markets  could  cause  on  the  financing  of  research,  a  smoothing  arrangement  is 
applied.  However,  following  declining  revenues  from  assets  management,  the  feeding  of 
RFCS budget, from the net income and from the smoothing mechanism, dropped from EUR 
42 million in 2017 to EUR 12 million in 2019. In 2017, the Commission proposed the use of 

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COM/2018/773 final, Communication from the Commission to the European Parliament, the European  
Council, the Council, the European Economic and Social Committee, the Committee of the Regions and 
the European Investment Bank. A Clean Planet for all A European strategic long-term vision for a 
prosperous, modern, competitive and climate neutral economy (28.11.2018) 
COM (2019) 640 final, Communication from the Commission to the European Parliament, the 
European Council, the Council, the European Economic and Social Committee, the Committee of the 
Regions. The European Green Deal (11.12.2019).  

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de-commitments and recovery orders to top up the budget to EUR 40 million until 20203. In 
April  2018,  the  European  Parliament  adopted  a  legislative  resolution  [P8_TA  (2018)0061]4 
accompanying  its  consent  to  the  Council  Decision  2018/5995,  which  aimed  to  authorise  the 
use of all de-commitments and recovery orders made under the ‘Research Fund for Coal and 
Steel’ (RFCS) programme since 2003. In this resolution, the European Parliament called for 
making  the  management  of  the  assets  of  the  ECSC  in  liquidation  more  active,  or  even  for 
using  some  of  those  funds  to  launch  major  projects  to  make  European  steel  clean  and 
competitive. 
As  recognised6,  annual  funding  of  at  least  EUR  40  million  is  necessary  to  successfully 
implement  the  research  programme  of  the  RFCS.  However,  under  the  current  interest  rate, 
considering the exhaustion of the resources available to allow the smoothing mechanism and 
in view of the UK withdrawal, it will be difficult to generate appropriate annual returns on the 
invested assets in the short to medium-term.  
A  recent  review  by  the  Court  of  Auditors  on  the  European  Coal  and  Steel  Community7 
concluded  that  funding  the  RFCS  on  the  sole  basis  of  asset  management  revenue  is  not 
sustainable  in  the  current  interest  rate  environment.  In  particular,  the  Court  of  Auditors 
suggested that the revision of the financial guidelines was urgent and should have answered 
how  the  equity  of  the  ECSC  in  liquidation  could  be  made  productive  within  the  EU’s 
framework research programmes.  
In June 2019, the Coal and Steel Advisory Groups (CAG and SAG)8 urged for the revision of 
the legal bases to ensure the continuation of the program, whilst adapting the objectives to the 
current  sector  needs.  At  the  same  time,  they  endorsed  the  progressive  use  of  a  share  of  the 
assets, approximately equal to one third (corresponding to around EUR 50-70 million per year 
for the year 2021-2027) to fund research projects for the coal and steel sector, in synergy with 
the  Just  Transition  Mechanism,  the  Coal  Regions  in  Transition  initiative9,  Horizon  Europe 
and  the  Innovation  Fund.  On  25  June  2019  the  ad-hoc-joint  CAG-SAG  group  endorsed  the 
opening of the ECSC assets. 

Research  and  innovation  allows  in  the  intensive  energy  sectors  the  development  and  the 
demonstration  of  an  installation  on  appropriate  scale  to  test  all  the  technical  and  economic 
data in order to proceed with the industrial or commercial exploitation of the technology at the 
minimum  risk.  The  2019  Green  Deal  Communication  proposes  to  support  clean  steel 
breakthrough  technologies  leading  to  zero-carbon  steel  making  process  by  2030  and  to 
explore  whether  part  of  the  funding  being  liquidated  under  the  European  Coal  and  Steel 
Community can be used. The Research Fund for Coal and Steel will in particular develop a 
Clean Steel production as a potential game-changer dragging other intensive energy sectors, 
such as chemicals and cement, towards Climate neutrality by 2050.  

Consequently, a revision of RFCS legal bases have gained relevance, urgency and ambition. 

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Council Decision 2018/599 amending Decision 2003/76/EC (PB L 101, 20.4.2018, p. 1)  
https://www.europarl.europa.eu/doceo/document/TA-8-2018-0061_EN.html 
Council Decision 2018/599 amending Decision 2003/76/EC (PB L 101, 20.4.2018, p. 1)  
Court  of  Auditors:  Review  No  10/2019,  The  European  Coal  and  Steel  Community:  winding  up  is 
according to plan, but funding for research is no longer sustainable (p.13) 
Ibidem. p.17 
The coal advisory group (CAG) and the steel advisory group (SAG) task is to assist the Commission in 
the  management  of  the  Research  Programme,  for  the  coal-  and  steel-related  aspects  respectively. 
Members of the advisory groups are individuals appointed by the Commission to represent a common 
interest shared by stakeholders. Members are appointed for a period of 42 months. 
See recital 11. 

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In  light  of  the  above,  this  proposal  suggests  changes  to  the  current  Decision.  It  aims  at 
allowing selling a part of the assets10 of the ECSC in liquidation for the period 2021-2027 in 
order  to  provide  an  annual  RFCS  allocation  of  EUR  111  million  per  year.  This  annual 
allocation will continue to support the collaborative research in the sectors related to coal and 
steel  under  the  RFCS  Research  Programme,  it  will  also  support  breakthrough  technologies 
leading  to  near  zero-carbon  steel  making  by  2030  and  research  projects  for  the  coal  sector 
managing the just transition of formerly operating coal mines or coal mines in the process of 
closure,  and  related  infrastructure  in  line  with  the  Just  Transition  Mechanism  and  in 
compliance  with  Article  4(2).  Specifically  to  the  sector  related  to  the  steel  industry,  the 
Commission  will  aim  to  support  research  projects,  via  a  dedicated  Clean  Steel  co-
programmed  partnership11  in  synergy  with  other  European  Union’s  programmes  especially 
with the Framework Programme for Research and Innovation. 

A  European  public-private  partnership  is  considered  a  valuable  tool  to  support  the 
development  and implementation  of research activities of strategic importance to  enable the 
Union to address global challenges and maintain its competitiveness. 

PROPOSED  CHANGES  TO  PERMIT  USE  OF  THE  ASSETS  OF  THE  FUND  WHERE  NECESSARY  TO 
PROVIDE  AN  ANNUAL  ALLOCATION  OF  EUR  40  MILLION  AND  FINANCE  LARGE 
RESEARCH AND INNOVATION PROJECTS. 

It  is  proposed  to  modify  Decision  2003/76/EC  to  provide  until  the  year  2027  an  annual 
allocation  to  the  RFCS  that  will  be  used  as  follows:  EUR  40  million  per  year  will  finance 
collaborative  research  in  the  coal  sector  and  steel  sector  whereas  the  remaining  EUR  71 
million will finance breakthrough technologies leading to near zero-carbon steel making and 
research  projects  for    managing  the  just  transition  of  formerly  operating  coal  mines  or  coal 
mines  in  the  process  of  closure,  and  related  infrastructure  in  line  with  the  Just  Transition 
Mechanism. These allocations and related payments should be generated by the net revenue 
on investments and, where necessary, by proceeds generated by sales of assets. 

This allocation should be explicitly enshrined in the Decision in order to allow a predictable 
flow of resource, at sufficient scale to enable continuation of desired support for collaborative 
research in the steel and coal sectors. 

To date, the assets of the ECSC in liquidation have been managed on the basis that the return 
on the assets invested would be the means whereby research projects would be financed. This 
is  reflected  in  the  language  of  section  1  (‘use  of  funds’)  of  the  Annex  to  Council  Decision 
2003/77/EC and in recital 3 to the same Decision, which foresees that the "entire capital of the 
Assets of the Research Fund for Coal and Steel should be preserved intact". 

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The level of the assets to be considered for the calculation is the level on 31/12/2019. 
A  co-programmed  European  Partnership  means  an  initiative  prepared  with  early  involvement  of 
Member  States,  where  the  Union,  together  with  private  and/or  public  partners  (such  as  industry, 
universities, research organisations, bodies with a public service mission at local, regional, national or 
international  level  or  civil  society  organisations  including  foundations  and  NGOs),  commit  to  jointly 
support  the  development  and  implementation  of  a  programme  of  research  activities.  Co-programmed 
European  Partnerships  are  set  up  on  the  basis  of  memoranda  of  understanding  and/or  contractual 
arrangements  between  the  Commission  and  such  private  and/or  public  partners  specifying  the 
objectives  of  the  partnership,  related  commitments  for  financial  and/or  in-kind  contributions  of  the 
partners,  key  performance  and  impact  indicators,  and  outputs  to  be  delivered.  They  include  the 
identification  of  complementary  research  activities  that  are  implemented  by  the  partners  and  by  the 
Research Programme. 

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For the reasons explained above, such an approach is inconsistent with the needs of providing 
the required level of funding that is needed to make viable a meaningful research programme 
for the steel and coal sectors. 

A continued insistence on the assets  of the fund  remaining  intact  is therefore not a  realistic 
stance  and  needs  to  be  modulated.  Furthermore,  there  are  no  more  obligations  to  keep  the 
reserves to provide assurances to the creditors of the ECSC as there are no more outstanding 
borrowings. 

To this end, it is necessary to amend the Decision to better reflect the needs of the underlying 
policy that is to be served by the ECSC in liquidation, and the challenges of generating returns 
on the level needed against the backdrop of current market conditions, while keeping enough 
assets of the ECSC to generate revenues after 2027. 

The  abolition  of  the  smoothing  mechanism  is  proposed  as  it  is  considered  an  obsolete  tool 
following the adoption of proposed changes. 

In addition, the Commission will use the opportunity of the revision of the Decision to write 
off claims where the foreseeable cost of recovery would exceed the amount to be recovered 
and  the  write  off  would  not  harm  the  image  of  the  Union;  where  the  claim  cannot  be 
recovered  in  view  of  the  insolvency  of  the  debtor,  or  of  any  other  insolvency  proceedings; 
where recovery is inconsistent with the principle of proportionality. 

Finally,  paragraph  2  of  Article  2,  laying  down  the  procedure  for  the  adoption  of  the 
multiannual financial guidelines for management of the assets and paragraph 3 of Article 4, 
laying  down  the  procedure  for  the  adoption  of  multiannual  technical  guidelines  for  the 
programme should be deleted because they are now completely redundant with paragraph 2 of 
Article 2, of Protocol 3712. 

Those  redundant  provisions  should  be  deleted  for  transparency  reasons  and  because  they 
cannot be relied on any longer. 

• 

Consistency with existing policy provisions in the policy area 

The proposal is part of a legal package revising the RFCS research programme. In particular, 
it is linked to: 

 

 

A  Commission’s  proposal  to  amend  Council  Decision  2008/376/EC  on  the 
adoption of the Research Programme of the Research Fund for Coal and Steel 
and on the multiannual technical guidelines for this programme. 

A  Commission’s  proposal  to  amend  Council  Decision  2003/77/EC  laying 
down  the  multiannual  financial  guidelines  for  managing  the  assets  of  the 
European  Coal  and  Steel  Community  (ECSC)  in  liquidation  and,  on 
completion of the liquidation, the assets of the RFCS. The revision of Council 
Decision  2003/77/EC,  under  Directorate-General  Budget’s  responsibility,  is 
also  consistent  with  the  European  Court  of  Auditors  2019  Review  on  the 
winding-up of the ECSC. 

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At  the  time  of  adoption  of  Decisions  2003/76  and  2008/376,  Protocol  (No  34)  on  the  financial 
consequences of the expiry of the ECSC Treaty and on the Research Fund for Coal and Steel (2001), 
annexed to the TEC, only had a legal basis for Decision 2003/76. 

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Consistency with other Union policies 

• 
The  proposal  is  revised  in  line  with  the  Paris  Agreement,  the  European  Green  Deal’13 
Communication  setting  the  framework  to  transform  the  EU  into  the  first  climate-neutral 
continent by 2050 and its follow up Commission Communication Green Deal Investment Plan 
– Sustainable Europe Investment Plan,14 presented on 14 January 2020.  

2. 

• 

LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY 

Legal basis 

The legal basis giving the EU the right to act is Article 2 of Protocol (N° 37) annexed to the  
Treaty on European Union and to the Treaty on the Functioning of the European Union on the 
financial consequences of the expiry of the ECSC Treaty and on the Research Fund for Coal 
and Steel. 

• 

Subsidiarity (for non-exclusive competence)  

The measures implementing the Protocol are established in a Council decision, the revision of 
which belongs to the Commission exclusive right of initiative for legislative proposals. 

• 

Proportionality 

The proposal is necessary for establishing the measures necessary for the implementation of 
the Protocol, annexed to the EU Treaties, on the financial consequences of the expiry of the 
ECSC Treaty and on the Research Fund for Coal and Steel. 

• 

Choice of the instrument 

The instrument amends a Council Decision and it needs therefore to be a Decision.  

3. 

• 

RESULTS 
CONSULTATIONS AND IMPACT ASSESSMENTS 

EX-POST 

EVALUATIONS, 

OF 

STAKEHOLDER 

Ex-post evaluations/fitness checks of existing legislation 

The proposal is based on the results of the seven yearly report, which carry out a monitoring 
exercise of the RFCS Programme, including an assessment of the expected benefits, with the 
assistance  of  a  panel  of  experts15.  The  most  recent  seven  yearly  report  was  published  on  5 
February 202016. The experts analysed the functioning of the RFCS Programme, assessed the 
technological developments and expected benefits of the programme to the sector and society, 
and  drew  recommendations  for  the  improvement  of  the  programme,  including  a  revision  of 
the legal basis. 

• 

Stakeholder consultations 

The  RFCS  stakeholders  have  been  involved  in  several  ad-hoc  meetings,  specific  Advisory 
Group meetings (Coal  Advisory Group  –  CAG,  Steel  Advisory  Group  -  SAG) and COSCO 
meetings  (equivalent  to  the  Programme  Committee  in  Horizon  2020).  As  direct  outcome  of 

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COM(2019) 640, 11 December 2019 
COM(2020) 21, 14 January 2020. 
The  monitoring and assessment report is foreseen in the provisions laid down in Council Decision n° 
2008/376/EC  published  in  the  Official  Journal  of  20  May  2008  ref.  OJ  L  130/7  and  amended  by 
Council decision 2017/955 of 29 May 2017. 
https://ec.europa.eu/info/publications/research-fund-coal-and-steel-monitoring-and-assessment-
report_en 

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these meetings, on 25 June 2019 the opening of the ECSC assets was endorsed by the ad-hoc 
joint CAG-SAG group. 

• 

Collection and use of expertise 

The  preliminary  results  of  the  present  RFCS  Monitoring  and  Assessment  report  were 
illustrated  in  the  seminar  ‘Steel  and  Coal:  a  New  Perspective’  hosted  by  the  European 
Commission on 28 March 2019 where more than 100 stakeholders were present17.  

• 

Impact assessment 

An impact assessment is not necessary for the proposed revision, as the expected economic, 
environmental or social impacts are not likely to be significant  

• 

Regulatory fitness and simplification 

The  proposal  is  based  on  the  results  of  the  seven  yearly  report,  which  foresees  a  regular 
review of the RFCS programme, including an assessment of the expected benefits. 

• 

Fundamental rights 

The proposal is in line with the protection of fundamental rights.  

4. 

BUDGETARY IMPLICATIONS 

The proposal does not create any new liabilities to be charged to the General Budget under the 
current MFF.  

5. 

• 

OTHER ELEMENTS 

Explanatory documents (for directives) 

Not applicable. 

• 

Detailed explanation of the specific provisions of the proposal 

The revision is then limited to the following provisions: 

(1) 

Article 1, paragraph 1a 

This article introduces the “de minimis” clause and it is based on Article 101 of the 
Financial  Regulation  on  the  financial  rules  applicable  to  the  general  budget  of  the 
Union. It allows the Commission to write off claims, even before exhausting all the 
possible  remedies,  in  limited  and  specific  cases  where  the  foreseeable  cost  of 
recovery would exceed the amount to be recovered and the write off would not harm 
the  image  of  the  Union,  or  in  case  of  the  insolvency  of  the  debtor  or  where  the 
recovery is inconsistent with the principle of proportionality. The application of this 
clause will allow to ensure an orderly closure of the liquidation process. 

(2) 

Article 2, paragraph 1 

The  assets  shall  be  managed  by  the  Commission  in  such  a  manner  as  to  keep  an 
annual  RFCS  allocation  of  [EUR  111  Million],  until  the  year  2027  to  finance 
research  in  the  sectors  related  to  coal  and  steel  industry  and  namely  [EUR  40 
Million] to finance collaborative research in  the said  sectors and [EUR 71 Million]  
to  finance  research  for  breakthrough  technologies  leading  to  near  zero-carbon  steel 

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   0A23CA684631B0CF 

https://ec.europa.eu/research/index.cfm?pg=events&eventcode=9DB3A26D-B1D8-8BED 

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making  and  to  finance  research  and  innovation  projects  for  managing  the  just 
transition of formerly operating coal mines or coal mines in the process of closing, 
and  related  infrastructure  in  line  with  the  Just  Transition  Mechanism  for  the  coal 
sector  and in compliance with Article 4(2). After the year 2027, the assets shall be 
managed by the Commission in such a manner as to ensure a long-term return. The 
assets  shall  be  invested  with  the  objective  of  preserving,  and  where  possible 
enhancing, the value of those assets.  

(3) 

Article 2, paragraph 1(a) 

1a.  The  annual  allocation  of  [EUR  111  Million]  should  be  constituted  of  the  net 
revenue from the investments and, when these are insufficient, the sale of part 
of the assets of the ECSC in liquidation and on completion of the liquidation, 
the assets of the Research Fund for Coal and Steel. 

(4) 

(5) 

Article 2, paragraph 2 is deleted 

Article 3, paragraph 1  

1.   Each year a profit-and-loss account, balance sheet and financial report shall be 
drawn  up  to  show,  separately  from  the  other  financial  operations  of  the 
European  Union,  the  liquidation  operations  provided  for  in  Article  1  and  the 
investment  transactions  and  asset  management  operations  under  Article  2. 
These financial statements shall be annexed to the financial statements drawn 
up  by  the  Commission  annually  under  Article  318  of  the  Treaty  of  the 
Functioning  of  the  European  Union  and  the  Financial  Regulation  on  the 
financial rules applicable to the general budget of the Union. 

(6) 

Article 3, paragraph 2 

2.   The powers of the European Parliament, the Council and the Court of Auditors 
concerning control and discharge as set out in the Treaty on the Functioning of 
the  European  Union  and  in  the  Financial  Regulation  on  the  financial  rules 
applicable  to  the  general  budget  of  the  Union  shall  apply  to  the  operations 
referred to in paragraph 1. 

(7) 

Article 4, paragraph 1 

1.   Net  revenue  from  the  investments  provided  for  under  Article  2  and  the 
proceeds  generated  by  selling  part  of  the  assets  shall  constitute  external 
assigned  revenue  in  the  general  budget  of  the  European  Union.  This  revenue 
shall be earmarked for a specific purpose, namely  financing research projects 
in  the  sectors  related  to  the  coal  and  steel  industry  outside  of  the  Research 
Framework Programme. It shall form the Research Fund for Coal and Steel and 
shall be managed by the Commission. 

(8) 

(9) 

Article 4, paragraph 3 is deleted 

In Article 5, paragraph 2 is deleted 

(10) 

The Annex is deleted. 

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2020/0142 (APP) 

Proposal for a 

COUNCIL DECISION 

Amending Decision 2003/76/EC establishing the measures necessary for the 
implementation of the Protocol, annexed to the Treaty establishing the European 
Community, on the financial consequences of the expiry of the ECSC Treaty and on the 
Research Fund for Coal and Steel 

THE COUNCIL OF THE EUROPEAN UNION, 

Having regard to the Treaty on the Functioning of the European Union, 

Having regard to the Protocol No 37 on the financial consequences of the expiry of the ECSC 
Treaty  and  on  the  Research  Fund  for  Coal  and  Steel,  annexed  to  the  Treaty  on  European 
Union and to the Treaty on the Functioning of the European Union, and in particular the first 
paragraph of Article 2 thereof, 

Having regard to the proposal from the European Commission, 
Having regard to the consent of the European Parliament1, 

Acting in accordance with a special legislative procedure,  

Whereas: 

(1) 

(2) 

(3) 

(4) 

(5) 

The Treaty establishing the European Coal  and Steel Community expired on 23 July 
2002  in  accordance  with  Article  97  of  that  Treaty.  All  assets  and  liabilities  of  the 
European Coal and Steel Community (ECSC) were transferred to the Union on 24 July 
2002. 

In accordance with Protocol No 37, the net worth of the assets and liabilities, as they 
appear in the balance sheet of the ECSC of 23 July 2002, is to be considered as assets 
intended for research in the sectors related to the coal and steel industry, referred to as 
the ‘ECSC in liquidation’, and, on completion of the liquidation, as the ‘assets of the 
Research Fund for Coal and Steel’. 

Protocol  No  37  also  provides  that  the  revenue  from  those  assets,  referred  to  as  the 
‘Research  Fund  for  Coal  and  Steel’  (RFCS),  is  to  be  used  exclusively  for  research, 
outside the research framework programme, in the sectors related to the coal and steel 
industry in accordance with the provisions of Protocol No 37 and of acts adopted on 
the basis thereof. 
On  1 February 2003,  the  Council  adopted  Decision 2003/76/EC2,  which  establishes 
the rules for implementing Protocol No 37. 

Due to the low interest rate context the revenues assigned to the funding of research 
projects for coal and steel are rapidly decreasing.  

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OJ C , , p. . 
OJ L 29, 5.2.2003, p. 22–24. 

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(6) 

(7) 

This  is  leading  to  a  situation  where  the  critical  minimum  budget  available  for 
organising  an  annual  call  for  proposal  for  the  research  programme  of  the  Research 
Fund for Coal and Steel (the ‘programme’) might not be met.  

A  critical  minimum  budget  for  organising  a  call  is  necessary  in  order  for  the 
programme  to  provide  meaningful  support  to  worthwhile  collaborative  research 
projects having the critical mass and EU added value for improving the sustainability, 
i.e.  health,  safety,  working  conditions  and  reducing  the  environmental  impact  in  the 
sectors related to the coal and steel industry.  

(8)  Within the Communication on the European Green Deal – COM(2019) 640 final, the 
Commission  committed  to  support  clean  steel  breakthrough  technologies  leading  to 
near zero-carbon steelmaking by 2030. To enable this, the Commission committed to 
explore whether part of the funding under the ECSC in liquidation could be used. 

(9) 

To meet EU targets, the Green Deal Investment Plan and Just Transition Mechanism 
Communication – COM(2020) 21 final - considered necessary a revision of the RFCS 
legal bases to enable using the assets of the ECSC in liquidation and, on completion of 
the liquidation, the assets of the RFCS.  

(10)  The sale of a share of the assets of the ECSC in liquidation and, on completion of the 
liquidation,  the  assets  of  the  RFCS  to  finance  research  projects  in  the  coal  and  steel 
sectors should be allowed on the condition that reserves should be kept  to guarantee 
the  limited  remaining  obligations,  resulting  from  any  unforeseeable  liability  and  that 
reasonable part of the assets, which are no longer needed for the above, should still be 
invested to generate revenues.  

(11)  The sale of a share of the assets of the ECSC in liquidation and, on completion of the 
liquidation, the assets of the RFCS could be necessary to provide until the year 2027 
an annual allocation of  [EUR 111 million] to the RFCS that will be used as follows: 
[EUR  40  million]  per  year  will  finance  collaborative  research  in  the  coal  and  steel 
sectors  and  whereas  the  remaining  [EUR  71  million]  will  finance  breakthrough 
technologies  leading  to  near-zero  carbon  steel  making  and  research  projects  for 
managing  the  just  transition  of  formerly  operating  coal  mines  or  coal  mines  in  the 
process  of  closing,  and  related  infrastructure  in  line  with  the  Just  Transition 
Mechanism and in compliance with Article 4(2). The possibility to sell a share of the 
assets of ECSC in liquidation and, on completion of the liquidation, the assets of the 
RFCS  is  limited  to  the  funding  of  annual  allocations  for  the  financial  years  2021- 
2027.  

(12)  The  RFCS  should  therefore  be  financed  not  only  by  the  net  revenue  from  the 
investments but also, where needed, by the proceeds  generated by selling part of the 
assets in the fund up to the amount envisaged for the period 2021-2027. 

(13)  Paragraph  2  of  Article  2,  laying  down  the  procedure  for  the  adoption  of  the 
multiannual  financial  guidelines  for  management  of  the  assets  and  paragraph  3  of 
Article  4,  laying  down  the  procedure  for  the  adoption  of  multiannual  technical 
guidelines  for  the  programme,  should  be  deleted  because  they  are  redundant  with 
paragraph 2 of Article 2, of Protocol 37. 

(14) 

It is proposed the abolition of the smoothing mechanism as it is an obsolete tool. 

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(15)  A  new  paragraph  should  be  added  to  Article  1,  in  order  to  allow  the  writing  off  of 
claims based on the principles established by Article 101(2), first subparagraph, of the 
Financial Regulation18. 

(16)  Decision 2003/76/EC should therefore be amended accordingly, 

HAS ADOPTED THIS DECISION:  

Article 1 

Decision 2003/76/EC is amended as follows: 

(1) 

(a) 

Article 1 is amended as follows: 

The following paragraph 1a is inserted: 

‘1a. The Commission shall write off claims, even before exhausting all the said remedies, in 
the following cases: 

(a)  Where  the  foreseeable  cost  of  recovery  would  exceed  the  amount  to  be 
recovered and the write off would not harm the image of the Union 

(b)  Where  the  claim  cannot  be  recovered  in  view  of  the  insolvency  of  the 

debtor, or of any other insolvency proceedings 

(c)  Where recovery is inconsistent with the principle of proportionality.’ 

(2) 

(a) 

Article 2 is amended as follows: 

Paragraph 1 is replaced by the following: 

‘1. The assets  shall be  managed by the Commission  in  such a manner  as to  keep an  annual 
RFCS allocation of [EUR 111 Million] until the year 2027 to finance research in the sectors 
related  to  coal  and  steel  industry  and  namely  [EUR  40  Million]  to  finance  collaborative 
research  in  the  said  sectors  and  [EUR  71  Million]  to  finance  research  for  breakthrough 
technologies leading to near zero-carbon steel-making and research projects for managing the 
just transition of formerly operating coal mines  or coal mines in the process of closure, and 
related  infrastructure  in  line  with  the  Just  Transition  Mechanism    and  in  compliance  with 
Article 4(2). After the  year 2027,  the assets shall be managed by the Commission in such a 
manner  as  to  ensure  a  long-term  return.  The  assets  shall  be  invested  with  the  objective  of 
preserving, and where possible enhancing, the value of those assets.’ 

(b) 

The following paragraph 1a is inserted: 

‘1a. The annual allocation of [EUR 111 Million] shall be constituted of the net revenue from 
the investments, and, when these are insufficient, the sale of part of the assets of the ECSC in 
liquidation and, on completion of the liquidation, the assets of the Research Fund for Coal and 
Steel.’ 

(c) 

Paragraph 2 is deleted. 

(2) 

In Article 3, 

18 

OJ L 193, 30.7.2018, p. 1. 

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(a) 

Paragraph 1 is replaced by the following: 

‘1. Each year a profit-and-loss account, balance sheet and financial report shall be drawn up to 
show,  separately  from  the  other  financial  operations  of  the  European  Union,  the  liquidation 
operations  provided  for  in  Article  1  and  the  investment  transactions  and  asset  management 
operations under Article 2. 

These  financial  statements  shall  be  annexed  to  the  financial  statements  drawn  up  by  the 
Commission  annually  under  Article  318  of  the  Treaty  of  the  Functioning  of  the  European 
Union and the Financial Regulation on the financial rules applicable to the general budget of 
the Union.’ 

(b) 

Paragraph 2 is replaced by the following: 

‘2.  The  powers  of  the  European  Parliament,  the  Council  and  the  Court  of  Auditors 
concerning control and discharge as set out in the Treaty on the Functioning of the European 
Union and in the Financial Regulation on the financial rules applicable to the general budget 
of the Union shall apply to the operations referred to in paragraph 1.’ 

(3) 

(a) 

In Article 4 

Paragraph 1 is replaced by the following: 

‘1. Net revenue from the investments provided for under Article 2 and the proceeds generated 
by  selling  part  of  the  assets  shall  constitute  revenue  in  the  general  budget  of  the  European 
Union.  This  revenue  shall  be  earmarked  for  a  specific  purpose,  namely  financing  research 
projects  in  the  sectors  related  to  the  coal  and  steel  industry  not  covered  by  the  Research 
Framework  Programme.  It  shall  form  the  Research  Fund  for  Coal  and  Steel  and  shall  be 
managed by the Commission.’ 

(b) 

Paragraph 3 is deleted. 

(4) 

(5) 

Article 5, paragraph 2 is deleted.  

Annex is deleted. 

This Decision shall enter into force on the twentieth day following that of its publication in 
the Official Journal of the European Union. It shall apply on or after 1 January 2021. 

Article 2 

This Decision is addressed to the Member States. 

Article 3 

Done at Brussels, 

For the Council 
The President 

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