CELEX: 51978PC0364
Language: en
Date: 1978-09-28
Title: PROPOSAL FOR A COUNCIL REGULATION FOR A COMMUNITY AID SYSTEM FOR INTRA-COMMUNITY TRADE IN POWER STATION COAL (Presented by the Commission to the Council)

ARCHIVES HISTORIQUES
DE LA COMMISSION
COLLECTION RELIEE DES
DOCUMENTS "COM"
COM (78) 364
Vol. 1978/0138
 ---pagebreak--- Disclaimer
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 ---pagebreak---  COMMISSION OF THE EUROPEAN COMMUNITIES
                                                   COM(78)364 final
                                                    Brussels , 28 September 1978
                     PROPOSAL FOR A COUNCIL REGULATION FOR A
                COMMUNITY AID SYSTEM FOR INTRA-COMMUNITY TRADE IN
                                POWER STATION COAL
                      ( Presented "by the Commission to the Council )
COM ( 78 ) 364 final
 ---pagebreak---                                    Explanatory Memorandum
1 . The Community energy noYicy as ft relates to coal
                                                                                       %
      In the objectives for energy policy laid down for the Community , in 1974
     and 1975 emphasis wag put on the need for the energy sources available in
      individual Member States to be developed in order to reduce dependence on
      imported energy , particularly oil . It was expressly requested that produc­
     tion of hard - coal be maintained at the 1973 level ( 250 million tee ) and a
      stable and regular market for Community coal was regarded as, a precondition
     for this .       •                                                 v
     The consideration behind these objectives . remain unchanged . The balance-
     sheet which the Commission drew up in'its " Second Report on the Achievement
     of Community Energy Policy Objectives for 1985 " ( Doc . C OM C 77 > 39 5 final ) frpm
     an examination of the national fenergy programmes , of Member- States clearly
                                                           /                             * /
     showed the nsed to reduce the Community 's dependence on imported energy
    .fay - 50% > and also to brine down the proportion of oil in the Community 's 1
     energy consumption by a considerable amount ~ both by 1985 ." Irc this context
     the foreseeable delay in nuclear power programmes would have to be-.- sup piemen
     ted by ah additional coal-burn of 30 - rail Lion tonnes'' .'in thermal, power-station
                             1                        -               '
.    The wetl-krrovm WA'ES     study also reaches the conclusion that coal is the
     only fossil energy source which can be expected to remain plentiful . - until
     the and - of tMs century and far into the next at comparatively low costs .
     It is one of *the : chief energy substitutes which can fill the' gap - between
   'the oil' and gas . era and the ag'-? -of renewable energy sources . WAES considers
     1
        Workshop on Alternative Energy Strategies ..
 ---pagebreak---    that tMs depends on an. active development prog; amme invot' / 't niV consumers
   and producers.- .- '                           ' /        :..- t
   In view of the universally-Held conviction that , unless coal can make a ,
  'substantial contribution to . supplying world energy needs tin the metii um-term.,
   more petroUum will, be needed , in its place than the pi l-expor.ting countries
   can be ^expected t'o .- produce at reasonable prices and actions of the Community
   to aid Community coal are urgent and neceassary . The Member States have
   different attitudes according to whether a particular country covers its
   coal requirements predominantly from its own production or through imports
   from non-member countries .                                                              .   *'
   Despite the extremely advantageous sup Plies available on the world market
   the maintenance of Community coal production-even if costly - may be justi­
   fied in the grants that indigenous coal offers a high degree of security
   of supply and protection for the consumers against abrupt price increases .
   The present situation in the coal-mining industry
   The conditions under which the Community 's coal-mining industry has to work
   since Community energy policy objectives were established are in clear con­
   tradiction with the medium-term prospects arid assumptions which influenced
    the deliberations of the . Council . The world recession - and particularly
   the steel crises - have led to a drop in demand for energyand temporary *
 ; surpluses ' in oil, gas arid 'q'oal supply.' The world market prices reflect this
    situation . The position of the Community seal-mining industry has been - marke
- by a general drop ifi xca I. - consumption and a sharp increase in imports from
   non-Riembeh states .             . •                 •                             -   "
         *            •      -, -                     .   • V '•     * -           •
    I'c is w:de!y known .tha * becaus-s of . the prevailing natural conditions the
    European cosi-mini'ng industrx- produces. at . relatively . Mgh'-cpsi "and - can only
    £ush j on i'!i .        feet's ov €c -: - rtc»3i c £-ohd*5 fc * ons' on .d?.r.vand sn'u price fluctuations ;
    t'c 'a . I": mi it 5 4 extent .                                                                      •.
 ---pagebreak---                                     - 3 -
Meanwhile currency trends ( the fall of the US dollar ) have resulted in a
further weakening of the competiti vity of the European coal-industry . Actual
production has fallen from 270 million tonnes in 1973 to 240 milUon tonnes
in 1977 . Imports from non-member countries have increased from 30 million
tonnes in 1973 to 46 million tfonnes in 1977 and some 63 million tonnes of
                                                                            y
coal and coke stocks have built up . In some of the important mining districts
these supplies cannot be further increased , nor can short-time working in pits
be continued indefinitely ; consequently definitive reductions in capacity are
unavoidable in the foreseeable future . This runs counter to the Community 's
long - term interests which , for reasons of security of supply , are oriented
towards the ability to maintain substantial coal reserves thereby reducing
dependance on imported oil r moreover , considering the economic policies of
the Community in other sectors it is not justifiable that the effects of the
                                                -                '        .
recession should hit the Community coal-mining industry alone .
The Community has of course spoken in favour of an open market and a long-term
increase in imports of coal from non-member countries , without at the same
time jeopardizing the objective of maintaining the Community 's own production
capacity. On the other hand , it seems Unrealistic to envisage combining the
coordination of import levels between Governments , of Member States , Community
coal consumers and producers and coal exporters in non-member countries with-
due allowance for tHe coa I avai lable in the Community . Experience has shown
that loose agreements are just not practicable . Direct protection of the
Community 's coal , however in . the form of import duties or quantity restrictions
would work against the necessary diversification of sources of supply which
should be a long-term objective . It would also be ineffective because of the .
increasingly uncomptetitive position of Community coal .
 ---pagebreak---                                     - L -
Need for a Community measure
     *
                             Sales" promotion measures cannot all be concentrated
on consumption in general , but must have some specific aim . The market in
power-station coal , which is generally expanding seems from the energy
policy point of view particularly suitable for absorbing additional quanti­
ties of Community coal provided that the price is competitive .
The coal-producing Member States ensure the sale of power-station coal by
national measures which are sometimes very costly./ Nevertheless , coal pro­
duction in general has decreased and at the same time pithead stocks of coal
and coke have been building up . the order of magnitude of unsaleable pro­
duction - which cannot be reduced at present - is estimated at around 10 to
12 mi I lion tonnes a year . On this relatively small scale ,, the problem of
Community coat, can be attenuated in the short term . As national aid measures
chiefly benefit domestic power-station coal production and as there are
limits to further increases in electricity sales - in these countries , the
only form or action which can foe considered is in respect . of sales in intra-
Community trade and particularly in countries with Little or no domestic
producti on .                                                         ~
 At the present time power-station coal can be obtained in the Community
 from the world market at prices of between 30 and 35 US dollars cif per tonne .
 By contrast ,, the average cost of producing coal in the Community is respec­
 tively US 3 45. in the . United Kingdom , US S 75 in Germany and France and
 around US 6 100 in Belgium . An average of US S 10 freight costs has to bkpaid
 on top of this to bring the coal from the pits to the place of consumption
 in another country of the Community. The difference between the cif price
 of imported coal and the cost price of Community coal is therefore conside­
 rable .
 ---pagebreak--- The'mo'st suitable form for a Community measure is a subsidy for each tonne ,
of power - station coal sold in intra-Community trade . This subsidy must not
only be substantial so that coal producers will find it easier to make the -
correct price alignments , but must also be within the possibilities of the
Community budget . The Commission considers a subsidy of 10 EUA per tonne
( approximately US £ 12.40 ) to be appropriate . The difference between pro­
duction costs and market price would have to be made up by national aids
and/ or by the producers .  ,                               , ,
The Commission feels that this Community action is particularly justified
because coal production capacity must be maintained in the interest of long-
term security of energy supply ; moreover > the coal-producifig count ries can­
not be expected to do this unaided . Theyalready subsidize their own coal-
mining industries considerably and thus are already making big contributions
towards safeguarding Community energy supplies . '      ■ ,               v
               tr'    ■■■■
The features of the Commission 's proposal
Basically any aid system ^ particularly at Community level , must be as simple ,
straightforward and efficient as possible . The market , and the commercial
freedom of the beneficiaries should be disrupted as little as. possible .
The basic general considerations which the Commission recently outlined . -■
to the Council on the question of sectoral aid schemes ( Doc . C0M(78)221
final ) also apply to a Community system of aid . More precisely , the Commission
considers that Community aid schemes should be limited , 'not only quantitative­
ly and financially but in time . . If after a certain time the energy market
situation, and the economic position of the coal'-mining . industry have shown no
appreciable change , the situation must .be reviewed . In other words , " the
Community aid proposed by the Commission may be only one of several ways
of riding out the situation on the energy market , .. which for the present
is particularly unfavourable for the coa I'-minina industry.
 ---pagebreak---                                    - 6 -
 In order to avoid di scrimination , a Community aid system must include not
only existing intra-Community trade in power-station coal ( just under 4
million tonnes in 1977 ) but also the additional delivery channels opened
up by this aid .
 In order to prevent competition for aid , and on the assumption that the
governments concerned will possibly need to make available additional aids ,
 a quantity scheme is required for producer countries that guarantees proper
 distribution of the coal supplied in inter-Community trade but allows
adaptation in line with actual developments .
/                   . «  I                            .               .
Additional deliveries which work against the objectives of the regulation
 should also be-avoided.' This could occur if coal subsidized under this
 system were to compete for sales on the coal producers 1 national markets .
 The aid system must therefore include criteria as to which deliveries are
 entit led to aid .
As the quality , and particularly the calori-fic value , of power-station coal
 produced in the Community varies , qualities should be made comparable by
 converting to standaard grades in order to avoid discrimination in the
  granting of aid .
 In 6rder to avoid rampant price competition with the help of Community ( and
  sometimes national ) aids , the established rules on price alignment should
 be used under the provisions of the ECSC Treaty and the rules of implemen­
 ---pagebreak--- tation laid down by the high authcnty/ Commi ssion in thi s. connecti on , i.e ,..
it must be proved inter alia that the specific competing quotation is valid .
In no case may the amount of aid granted exceed the figure corresponding
to the losses actually incurred by Community producers . Neither should it •
lead to undercutting of the price quoted by supplies from non-member coun­
tries .                                    v
All further details , conditions of payment , etc are given in the following
draft regulation and the financial record s'heet attached .
 ---pagebreak---                   Proposal for a Council Regulation on Community
        financial measures by the Community for intra- Community trade
                        in power-station coal
THE COUNCIL OF THE EUROPEAN COMMUNITIES
Having regard to the Treaty establishing the European Economic Community ,
and in particular Article 235 thereoef ;
Having regard to the proposal from the Commission ;
Having regard to the Opinion of t;he European Parliament ;
Having regard to the Opinion of the Economic and Social Committee ;
            .        •
Whereas the establishment of a common energy policy is one of the objectives
which the Communityhas set itself and whereas it is the Commission 's res­
ponsibility to propose the measures connected therewith ;
Whereas it was concluded in the Council Resolution of      December 1974 that
the objective was to step up the us£ of secure sources of energy and also
to maintain coal production at 250 million tee providing the financial con­
ditions were satisfactory ;
                                        Τ
Whereas the Council decided on 13 February 1975 as a guide towards reaching
this objective that a policy on solid fuels should be worked out and imple­
mented, to provide for stable and regular sales of these fuels produced in
the Community, under satisfactory financial conditions , taking the " interests
of the consumer in the most important sectors of consumption ( iron and steel
              ' *           -           , • v •
                  »
 ---pagebreak--- industry and thermal power stations ) into consideration ; whereas with
regard to 'the coal imported from non-member countries the Council was in
favour of extending free access to the world market to all Community coal
consumers , to whom such access -is not yet available , under satisfactory •
fiancial conditions in such a way that the realization of the objectives
of Community production would not be adversely affected ;
Whereas the -importation of steam coal from hon-member countries into the
Commuhity has increased markedly in previous years , as new centres of con­
sumption have appeared , parti cularly % near the coast and in countries with
no domestic coal production ; whereas , because import prices for steam coal
were far lower than the cost of producing Commjnity coal', Community producer
could not themselves compete with imported steam coal even with great fi -1
nantfal sacrifices ; whereas the coal-mining industry has therefore . not been
able to supply targe markets which were^ particularly significant as a
measure forstabi lizing sales ; whiereas the availability and functioning pf •
a common maiket in power-station coal is one of the conditions for long -         v
term security of supply in the Community ;
Whereas , if this trend is not halted or at teast checked , it will have -
deleterious and irreversible effects on production capacity and therefore
on energy supplies ; whereas this runs counter to the long-term interests
of all energy consumers in the Community ;
Whereas , because the Community coal-mining industry cannot at present
supply the new markets because of its own competitive -position ancJ restric­
ting free access to the world market for coal consumers would run counter
to the Counci I 's guidelines of 13 Pdbiuary 19? 5 , the competiti vity' of the - ,
Community's' coal-mining industry should be temporarily strengthened by
financial measures ; whereas a system of Commuhity aids in favour of intra-
 ---pagebreak--- Community tiiide in power–bt at ion coal is yp&cific r^jaatire to maintain this
part of the coni;oon market in coals whereas the '• fl '"-stem should . be not only
simple and efficient , but also quantitatively lr ■ ted as to the amounts of
co&l and the level of finance involved, and : estripted iri duration ;
Whereas this aid from the Community should b ? granted in accordance with
the rules of competition in the Treaty ?
Whereas under the ECSC Treaty and where necessary because of competition
from steam coal imported from the third countries , coal-mining undertakings
are authorized to grant rebates on their list-prices and whereas in this
context the provisions of Article 60 of the ECSC Treaty , paragraph 2 b , last
sub-paragraph regarding to price alignment , together with the corresponding
implementation decisions , continue to apply }
Whereas the Treaty does not specify the necessary competences for the
introduction of Community financial measures for the purposes of improving
and safeguarding the supply situation ,
HAS ADOPTED THIS REGULATION i
 ---pagebreak---                                 SECTION I                                    ,
                             *
                                                «U.
                            General objective
                                Article 1                               -
Within the limits of the funds made available for this purpuse in the budget
of the Communities and in accordance with the conditions defined below , the
Commission may grant aids to the undertakings referred to in the first para>-
graph of Article 3 » in order to facilitate intra-Community trade in Community
hard coal intended for use in thermal power stations ( power-station coal ),
in order to cover part of the financial losses incurred by coal-mining undertaking
as a result of such deliveries .
                                SECTION II
                       Criteria for granting aid
                                Article 2
Aid shall be granted when the criteria defined in Article 3 to 7 below are
fulfilled .                                                                    '
                                Article 3
1 . Aid shall be granted to undertakings which produce hard coal in the
     Community*
                                                    «
2 . Aid shall only be granted on request .
                                Article A
                %
1 . Aid for power-station coal' shall be granted only if all the following
     three conditions are fulfilled.
     The coal must :
     ( i ) have been produced in the Community;                       '
  ( ii) be intended for use in power stations in another Member State of the      '
           Community !
 ---pagebreak---                                          - 5 -
       ( ii1 ) must comply with at least one of the delivery categories specified
                  in Paragraph 2 .
                          ν                            >
2 . The following delivery conditions qua tify for aid :
     '     ( 1 ) deliveries to power-stations which have already obtained coal
                  through intra-Community trade in 1978 , and in fact up to the
                  amount of 1978 deliveries ;
         ( ii ) deliveries to power stations which in 1978 exclusively or in part
                  consumed coal imported from non-member countries ;
       ( ili ) deliveries to power stations which , during the time of validity of
              "• this regulation , started up operating for the first time in Den­
                ' mark , Ireland , Italy , Luxembourg and the Netherlands .
3 . If contracts between coal producers in one Member State and electricity
     producers in another coal-producing Member "State contain conditions
       whereby electricity undertakings themselves see to the distribution of
       coal deliveries to their own power stations ^ the eLectricity undertakings
      are required to observe the delivery conditions specified under paragraph
       2(i ) and (ii ) of this Article and not to substitute national coal . "Excep­
     tions are only granted to this provision if the electricity undertaking
      hss urgent business reasons for its course of action .                -
4 . Power-station coal . qualifying for a subsidy must come either from normal
     production or from pithead stocks of coal produced by those coal-pro-
     ducing undertakings mentianed in .paragraph 1 of 'Article 3 .-
   - No aid is granted in. respect of coal recovered from waste-tips ,
 ---pagebreak--- ^                  '       '    ' ' •          '                ■   ' < '     .
                                                   Article 5                          '       "
                         .   ..    »             *                1             *
                                         "«■ »                            -,                            .
          1 . The beneficiaries of aid in accordance with Paragraph 1 of Article'3
'                 shall be obliged to supply the Commission with details of, any contracts
                  signed or the contracts themselves on request .                       .^
             V                                                                    N          ' #
          2 . With regard to deliveries to public power stations in other Community
                  countries , aid may be granted in respect of that quantity of power-station
              ./                                                          - _       ;      •
                  coal which has come from the coal-mining undertakings referred to in Pa­
        ,         ragraph 1 of Article 3 .
          3 . With'regard to deliveries in other Member States to other industrial                          j
                  undertakings for whom electricity production is not the main activity                      i
                  but who possess one or several power plants which cover partly or entirely j
                  their own needs aid may be granted on only that quantity of power-station ,
                  coal which is actually used in the power stations and on the condition
                  that at least 80% of the steam produced is fed into the turbo-alternator . / I­
                   set . Any temporary drop "below this percentage for technical or economic                   j
  /               reasons is. acceptable . The coal-mining undertakings mentioned                     .   ■    j
            ·*                                                                                                 ι
           ? in paragraph 1 of Article 3 are required to obtain the necessary proof
              , every quarter from the industrial undertakings supplied by them .                .      .
      . 4 . For the purpuses of calculating the aid payment the quantities deter- ' '
                  mined in accordance with peircigraphs 2 and 3 of this Article shall be
                    taken together .
                                                    Article 6
                                                     .1.  * ' f
          1 . Aid for intra-Community trade in power-station coaL shall be granted
                   for quantities estimated at no more-than 10 million standard' tonnes            •.
                 f of coal a year for the whole Community .
    .      2 . An upper calorific value of 25.1 mi llionk ' Joule ( 6.0 million Kcal or
                     23.8 million BTU ) per standard tonne shall be taken as a basis for conver­
                     ting the actual tonnage delivered or consumed in accordance with paragraph
                     2 and 3 of Article 5 into standard tonnes . The conversion shall be carried
                     out by the coal-mining undertakings referred to in Paragraph 1 of Article 3 .,
 ---pagebreak---   3(a) The overall yearly quantity of not more than 10 million standard tonnes
         eligible for aid as referred to in paragraph 1 of this Article , shall
         be divided among the five coal-producing Member States of the Community
         ( Belgium , the Federal. Republic of Germany , France , . Ireland and the United
         Kingdom ) in maximum quotas valid for a year at a time . The quota distri­
         bution will be based on the percentage of Community production and the
         percentage of overall intra-Community trade in power-station coal on, a
         one-to-one basis . The period from 1 July to 30 June preceeding the year
         in which aid is granted shall be taken as a basis for calculating the
         percentage -of production or trade. The Commission shall calculate the
         quotas in the autumn of each year for aid in the following year and shall
         inform Member States of its results .
   ( b) In the middle of each year , the Commission together with the coal- -
         producing Member States , shall investigate the extent to which their
         coal-mining industries have already used up or are expected to use up
         in the remaining months the quotas allocated to them in accordance
         with Paragraph 3(a) of this Article . Should this investigation show
         that some individual quotas will probably not be used up while other
         coal-producirig Member States are expected to exceed their allocated
         quotas , the Commission may adjust the quotas initially allocated to
         individual Member Siatea on the basis of Faragraph 3 ( a) of this Article.
   ( c ) Adjustment of quotas in accordance y with Paragraph 3 (b ) of this Article
         shall result in a corresponding adjustment of aid payments .
                                            •                                         i.
4 * The quota allocated to .each coal–'producing Member State in accordance
     with Paragraphs 3(a) or (b) may be divided by Member States between the
     coal-mining undertakings in its country.
                                      Article 7
1 " Aid i*1 accord&nce Vith Paragraph 2 of Article 6 shall be granted at a
     standard rate of 10 SUA per si.ardard tonne of power-station coal ( amount
     of aid per tonne ).
2 . In the- oase of the coal-mining tuid . 'takings referred to in Paragraph 1
     of Articls 3D        aid per tonne shall not exessd the actual loasss to •>
 ---pagebreak---        the undertakings on their deliveries in accordance with , Paragraphs 2
       and 3 of Article 5 » If this does happen , the aid per tonne shall be
      reduced accordingly . .             /        * -
3 . The amounts of aid to be paid to the beneficiaries are set exclusively
      according to the amounts specified in Paragraph 4 of Article 5 f°r
      which shipping papers or proof of consumption are available . -
    •      -           I        *
4 . Aid shall be paid quarterly and retroactively and only on presentation i
   • of all documents and information which the Commission feels to be ne­
       cessary .
  ' '                             ' SECTION III
                   *
                         , General and final provisions
                                    Article 8
Should t"e overall total of national aids granted by Member States to the
coal mining industry in accordance with Decision No . 528/76/ECSC and of the
amount of aid per tonne granted in accordance with this regulation give an
amount per tonne which is higher than the actual losses .which have occured
on sales of power-statiorf coal in intra-Community trade , the amount of . aid
paid in accordance with this regulation shall be reduced accordingly .
                                    Article 9
1 . At the "end of each calendar year the Council may , unanimously , on a
       proposal from the Commission and after hearing the opinion of the European
       Parliament , decide to adjust the amount of aid per tonne by a regulation .
                 »        · - .                      Γ '
        In urgent cases the Council may however , on a proposal from- the Commission
      vmake these adjustments at other- times .                       v.
 2 . The Commission may withdraw aid which was granted incorrectly or , parti­
       cularly , on the basis of misleading information supplied by the bene­
       ficiary .               ^             \           "    .   1 ,
 ---pagebreak---                               Article 10
If the Commission discovers from a Member State or on its own initiative
that :            - '   •
                               '               •              ~         s
1 . the application of this regulation threatens to seriously disturb the
    common Market in coal or create difficulties which could result in the
    deterioration of the coal supply situation in general ,
    or     –                     ' '    . •
2 . appreciable changes occur in the conditions of the coal market because
    the economic conditions* which prompted this regulation have changed ,
                                                        r
the Council may , on a proposal from the Commission and after hearing the
opiniQn of the5 European Parliament , decide to partially or completely
suspend the application of this regulation . The conditions of existing
contracts would have to be taken into consideration, in this case .
                              Article 11
The Commission shall regularly inform "the European Parliament and the
Council of the application of this regulation .
                                                                  *        te
                              Article 12
After consulting the Councilj the Commission shall . issue provisions for
implementing this regulation and shall take all the nieasures necessary
to ensure the control and the orderly implementation thereof .
         1      '     *             •       •             '     •
                          . . Article 13                    \       '
This regulation shall enter into force on 1 January 1979 . It shall apply
until 31 December 198l « '
 ---pagebreak---  *                                                                         Now - measure
                              • Financial record sheet
                                               ?
                             for the 1979 financial .year
                *                      T:
,    yii nhor of relevant Budget heading :       Chapter 32 , Item 32 32
- Ti tle of - Bu'3 /ret heading : Aid for intra-Community trade' in power-station coal     '
                                                                         .               ^
      i.nml banin :
                                                                         »       >
3 . O.I. Council Resolution of 17 December 1974 concerning Community energy - policy
           objectives for 1985 ( OJ No C 153 , of 9 July 1975 )* ' - ~ .
3.0 .?. Council Resolution of 13 February 1975 concerning measures to be implemented
           to achieve the Community energy policy objectives adopted by the Council
           of 17 December 1974 ( OJ No C 153 of 9 July 1975 )-"
3.0.3 . Proposal for a Council Regulation , based on Article 235 of "the EEC Treaty ,
           concerning the introduction of a Community aid system for intra-Community
           trade in power-station coal ( COM(78 ) '70 final ).
3 .?. Proposal for the Regulation submitted to the Council on ....
3.3 . Opinion of the European Parliament . ..."
3 . /J. Opinion of the Economic and Social Committee ,                             . ' .
l.y. Article 235 of "the EEC Treaty '                            .          '
                        -V -                       '                       >-
4 - Description , objectives and .justification of the measure
4.0 . Dencriptjon of the measure and parties involved .
4«0;0 . Description : Non-repayable subsidies designed to stimulate intra-Community
            trade in powef-station coal . Aid amounting to 10 EUA/t to be granted jn
            respect of- an annual quantity estimated at a maximum of 10 million t only , and
           covering only 30/o of the estimated losses which Cbmmunity coal–mining under­
           takings supplying steam coal to other Member S&tes have to m£et themselves , or
           which are offset by Stated-aid schemes in the coal–producing Member States . The
 ---pagebreak---          coal-mining undertakings , will receive the 10 EUA/to subsidy.
                                       ■    i»
4*0.1 . Parties involved                         /
                                                                           \
4*0.1.0 . Category J Community undertakings .
            '     .             " ·                          Λ
4.0.1.1 . Number t About 15 coal-mining undertakings ,
                -                  v
4«0.1.2 . Geographical position : Community territory
4.1 . Aim of the measure                          ,
                                                                   »
4.1.0 . General     aim j To achieve the aims of the Community energy policy } to
         improve    the conditions of competition to which Community steam coal is
         subject    in order to ensure Community energy supplies in the long term .
         Council    Resolutions of 17 December 1974 and 13 Februaiy 1975 *
4*1.1 . Specific aim s The aim of the subsidy is to rsduce the financial burden'
        borne by under takings in the coal-mining industry ? the subsidy will cover
        about 30 fo of tl\at burden.. In accordance with the Directives of long-term
        policy , this measure will contribute Lowards stabilizing production be­
        tween now and 1985 .                   -                       '
4*2 * Justification of the measure
      It would not be possible to stabilize hard-coal production between now and
      1985 without financial help from tho Coataunityj • if "production is not
      stabilized this will have a negative effeot on the security of the Com–
      nrarity 's energy supplies .       *■
 ---pagebreak---                                              ■*                 ,                   f
    . .                                               '                         i
5.O. Financial implications '                       '                          ;                             '
                                                                                                 *
5«0.0 » The required appropriations will be entered in . the General Budget of the -
        European Communities .
        This involves .an annual subsidy estimated at a maximum of 100 million EUA
         over a period of three years .
5.0.0.0. Annual maximum paymënts in EUA at current prices :                                    milli n EUA
                                                                                                        -
                                                                          Probable payments
                                         Sum
                                                           '  :      1979                 1980         1931
                      1979               100                           100
              1       1980      ,        100                                               100
                      1981'              100                                                            100
                         Total         ' 300                            100                100          3.00
                                                                                            1
                It is estimated that the maximum annual subsidy will be 100 million EUA ,
            . The sum actually paid may be less than the maximum , depending on the '
                actual rata of deliveries of steam coal in intra-Community trade .
                The subsidy will be paid quarterly - i.e.- at the end of each quarter -
                to undertakings meeting the conditions subject to which subsidies will
                be paid.' Outgoings "per quarter will be approximately one quarter of
                the maximum annual payments - i.e. approximately 25 million EUA .
5.0.0.1 . Method of calculation and uncertainty factor
5.0.0.1.0 . Method of calculation s                             ,                                    "     '
      <              Commiimehts to be paid for the financial years 1979 , 1980 and I98I .
                                                ■*»                               »
                     The subsidy is 10 EUA/t per year .                                 '
                . It is based on ti e amoirnt of etes.i. coal' supplied to power stations by
                                                                                      A
        .        • vtFiy of intra–Corniiiunity trade . The aim of tho subridy is - to increase -
                     the amour of s.t ee^,. coul traded within the Community to p. l~v,el of
          •        - 1C mil .! Ion - t pc.'' *j ? ar . The mitai will be paid in r. -ip -rot of a 'r..o\'iinu
                     a.   v* e~t r.mat?d i-.t 10 r.ilii'o . .- t f^ly ;- xhe maximciu' va ual r ? .ihent is-
 ---pagebreak---             coal-mining undertakings , will receive the 10 EUA/to subsidy.
    4.0.1 . Parties involved                    -
  .  .                                        -                               \
    4.0.1.0 . Category i Community undertakings .
    4.0.1.1 . Number t About 15 coal-mining undertakings ,
, 4*0.1.2 . Geographical position : Community territory                         '
    4.1 . Aim of the measure              *         ,
    4*1.0 . General aim : To achieve the aims of the Community energy policy } to
            improve the conditions of competition to which Community steam coal is
            subject in order to ensure Community energy supplies in the long term .
            Council Resolutions of 1J December 1974 and 13 February 1975 .
  4.1.1 . Specific aim s The aim of the subsidy is to reduce the financial burden'
            borne by undertakings in the coal-mining industry ? the subsidy will cover
            about 30    of tl\at burden .. In accordance with the Directives of long-term
            policy , this measure will contribute lowarda stabilizing production be­
            tween now and 1985 *              .   '                        '
  4.2 . Justification of the measure
          It would not be possible to stabilise hard-coal production between now and
          1985 without financial help from tho Coomuiiityj if production is not
                                                ,          i
          stabilized this will have a negative effect on the security of the Com­
          munity 's energy supplies .       *'.
 ---pagebreak---                                               - 3 -
5.0 . Financial implications                                                        ;                                  '
5.O.O , The required appropriations will be entered in . the General Budget of the •
          European Communities
          This involves .an annual subsidy estimated at a maximum of 100 million EUA
          over a period of three years .                                        :         " .      -
5.0.0.0. Annual maximum paymfents m EUA at current prices :                                        milli n EUA
                                                                                                               -
                                                                             Probable payments
                                     Sum
                                                        ___              1979                 1980            1931
                    1979             100                                   100    '  . ,
              '     1980             100 .                                                     100      :
                    1981'            100                                                                       100
                        Total      " 300                                   100                 100             100 ;
                                                                                                '
                It is estimated that the maximum annual subsidy will be 100 million EUA .
            . The sum actually paid may be less than the maximum , depending on the '
                actual rate of , deliveries of steam coal in intra-Community trade .
                      ^                                                                y                             €
                The subsidy will be paid quarterly - i.e.- at the end of each quarter -
                to undertakings meeting the conditions subject to which subsidies will
               be paid . Outgoings per quarter will be approximately one quarter of
                the maximum annual payments – i.e. approximately 25 million EUA .
5«0.0»1 » Method o f calculation and uncertainty factor
5.0 .0 . 1.0 . Method of calculation                                                                      •      '
   • *            Commitmehts to be paid for the financial years 1979 , I98O arid I98I .
                  The subsidy is 10 EUA/t per year .                                    "                   .
                      -                                   »
                - It is based on ti"? amount of etea., coal supplied to power stations by
                  w^y of* intra,–CoiTiMuuity *tra,d6# Tho s.int of1 "tho siibridy is - to increase -
                  the anour * of s : ea- coul traded within tee Community to p. Uv.el of
                  l,c million - t pc - jaar . The nutai-V; will bo paid* in r^p-ret of a n.s.yiinw,
                           enir .mavpd i=.t 10 r.i.l .! ro .i - 1. r ^ lyj' xbe maximum ' stnr u&l r ? rr erst i 9 •
 ---pagebreak---                  estimated at 100 million EUA-,
                        χ
5.0.0.1.1 . Uncertainty factor
                In view of the complicated market conditions it is not possible to
                forecast exactly how much coal will actually be, supplied , and hence
                ;fche amount to be paid out in subsidies .
6 . Type of monitoring to be applied i
6.0 . The. usual supervision will be carried out by the Commission in accordance
        with the current Financial Regulation .
6.1 . The Commission has to report annually to the Council and the European
        Parliament on the application cf the subsidy .
7 . Overall financial implications of the measure for the whole of its expected
      duration
7.0 . Total costs . are estimated at a maximum amount of 300 million EUA. Period of appli
                                                    /
        cation : three years , during which a maximum of. 100 million EUA will be .due each
      ' year *                                               .
7.0.1 . The costs of the measure . will be borne by the Community Budget . If the
          proposed measure is adopted by the Council in 1978 , payments will begin .
    ■     at the end of the first quarter of 1979 «                         '
7.0.2 , The codl-mining ur.dertaJc.ings or the governments of coal-producing Member-
7.0.3 .
          States have to bear costs of approximately 200 million EUA per year . It
          is not possible to indicate what proportion of - that 200 million EUA is
          borne by th9 undertakings and how much by the Member States .
3 . Staffing :                                  -.-
   " l*        practical application of the intended measures by the Commission 's
         departments requires the employm en*t of two Grade B officials ,.
3,2 , Staff costs               .  .
 ---pagebreak---                                       5 -
9 . Financing of the measure                       '
9.0 . Through Chapter 32 , Item 3232 of the 1979 Community Budget .
9.1 ^ Probable commitments to be paid in subsequent financial years
      100 million EUA per year for I98O and 198l .