(1)

Council Regulation (EC) No 1407/2002 of 23 July 2002 on State aid to the coal industry expires on 31 December 2010.

(1)

Council Regulation (EC) No 1407/2002 of 23 July 2002 on State aid to the coal industry expires on 31 December 2010 and in the absence of a new legal framework allowing for certain specific types of State aid to the coal industry after that date, Member States will be able to grant aid only within the limits provided for in the general State aid rules applicable to all sectors .

(1a)

Coal is used not only as a fuel but also as a raw material for the chemical industry, a role which will become increasingly important in the future.

(1b)

Production capacity in the Union coal mining industry lost through pit closures will be made up by coal imports into the Union, resulting in the Union being supplied with coal from third countries.

(2)

The small contribution of subsidised coal to the overall energy mix no longer justifies the maintenance of such subsidies with a view of securing the supply of energy on a Union level .

(2)

The small contribution of subsidised coal to the Union’s overall energy mix means that subsidies for coal mining can make up for interruptions in the supply of energy only to a limited extent . However, the level of State aid in the coal sector is now so low that it is not capable of having a distorting effect on competition. A minimum of coal production in the Union would maintain access to indigenous deposits in the interests of creating a strategic reserve.

(2a)

The expiry of Regulation (EC) No 1407/2002 will force some Member States to close their coal mines at short notice and to face the considerable social and regional consequences of such closures.

(2b)

In the light of the extremely serious socio-economic impact of pit closures, particularly in thinly populated regions, consideration should be given to targeted support from the EU structural funds in future budgets, even if the regions affected are situated in Member States with less severe economic problems.

(2c)

Under Article 194(2) of the Treaty on the Functioning of the European Union the Member States have the right to determine the conditions for exploiting their energy resources, to choose between different energy sources and to determine the general structure of their energy supply.

(3)

The Union's policies of encouraging renewable and lower carbon fossil fuels for power generation do not justify the indefinite support for uncompetitive coal mines. The categories of aid permitted by Regulation (EC) No 1407/2002 should therefore not be continued indefinitely .

(3)

As regards the Union's policies to aid the use of renewable and lower carbon fossil fuels for power generation , Member States should provide a plan of measures aimed at mitigating the environmental impact of the use of coal, for example in the field of energy efficiency, renewable energy or carbon capture and storage. This applies to all types of coal and all types of resources. It should be recognised that the replacement of subsidised coal by unsubsidised coal has no beneficial impact on the environment .

(3a)

Because indigenous energy sources in the Union are scarce, support for the coal mining industry is justified under the Union’s policy to encourage renewable and lower carbon fossil fuels for power generation. The categories of aid permitted under Regulation (EC) No 1407/2002 should not be maintained indefinitely. In any event, however, State aid intended to reduce the pollutant effect of coal should be maintained. Mines that are capable of being competitive but continue to require State aid for environmental technology investment after the expiry of a 10-year period should be exempted from such a discontinuation of subsidies.

(5)

Without prejudice to the general State aid rules, Member States should be able to take measures to alleviate the social and regional consequences of the closure of those mines, that is to say the orderly winding down of activities in the context of an irrevocable closure plan and/or the financing of exceptional costs, inherited liabilities in particular.

(5)

Without prejudice to the general State aid rules, Member States should be able to take measures to alleviate the social and regional consequences of the possible closure of those mines, that is to say the orderly winding down of activities in the context of an irrevocable closure plan and/or the financing of exceptional costs, inherited liabilities in particular.

(5a)

Retraining workers affected by the pit closure plans should be provided for immediately and all the possibilities of regional, national and Union financing should be explored for that purpose.

(5b)

The financing of environmental protection measures and costs relating to long-term pit closures will need to continue beyond 2014. A premature end to Member States' subsidies to the coal industry would lead to significant environmental and financial destabilisation in the affected regions and would ultimately be much more costly than the phasing out of such subsidies.

(6)

This Regulation marks the transition of the coal sector from sector-specific rules to the general State aid rules applicable to all sectors.

(7)

In order to minimise the distortion of competition in the internal market resulting from aid, such aid should be degressive and strictly limited to production units that are irrevocably planned for closure.

(7)

In order to minimise the distortion of competition in the internal market resulting from aid, such aid should follow a downward trend and should be limited to production units that are irrevocably planned for closure , except where those units have become competitive by the scheduled date of closure .

(7a)

The rehabilitation of former coal mining sites requires a number of measures such as the removal of mining equipment from, and making safe, the mine, cleaning the site and disposing of waste water. The financing of such rehabilitation requires longer term planning.

(8)

In order to mitigate the negative environmental impact of aid to coal, the Member State should provide a plan of appropriate measures, for example in the field of energy efficiency, renewable energy or carbon capture and storage.

(8a)

A minimum level of coal production, together with other measures, in particular to promote energy production from renewable sources, will help to maintain a proportion of indigenous primary energy sources, which will significantly boost the Union's energy security. Furthermore, a proportion of indigenous primary energy sources will serve to promote environmental objectives within the framework of sustainable development. Within the context of boosting the Union’s indigenous energy sources in order to counterbalance its significant dependence on imports, consideration should be given to complementing indigenous non-fossil sources with fossil sources, coal being the sole source of indigenous fossil energy in some Member States.

(8b)

In networks of coal-fired power plants, indigenous coal is likely to be replaced by imported coal, leading to substantial transport costs and a negative carbon footprint without in reality changing the amount of CO2 emissions resulting from power generation.

(8c)

The conditions for coal mining vary in geological terms depending on the site, and in terms of social, safety and environmental standards (relating to subsidence and other environmental damage) depending on the political circumstances. The effect of those variations gives rise to competitive disadvantages, in particular between Union and imported coal, which has resulted in substantial restructuring measures in the Union coal industry involving a major reduction in activity over the last decades.

(8d)

A minimum level of production of subsidised coal will also help to maintain the prominent position of Union mining and clean coal technology, enabling that technology, in particular, to be transferred to the major coal-producing areas in third countries and contributing to a significant global reduction in pollutant and greenhouse gas emissions.

(8e)

Coal is used in the Union mainly for power generation and, to a lesser extent, for the production of coke for the steel industry. On environmental grounds, coal-fired power generation should cease as soon as possible in favour of sustainable power production. In the steel industry, on the other hand, coal is likely to remain indispensable for the foreseeable future. In view of diminishing oil deposits (‘peak oil’), coal is likely to become increasingly important as a substitute raw material for the chemical industry. In the long term, therefore, continuing access to Union coal deposits with a view to maintaining, for technical reasons, a minimum level of coal production which does not distort competition should not be ruled out even if such continuing access necessitated a lengthy period of State aid.

(9a)

Undertakings should, in line with the ‘polluter pays’ principle and the need for internalisation of external costs, be obliged to cover the costs of remedying any short-term and/or long-term environmental damage caused by their activities.

(10)

In accomplishing its task, the European Commission should ensure that normal conditions of competition are established, maintained and complied with. With regard to more especially the electricity market, aid to the coal industry should not be such as to affect electricity producers' choice of sources of primary energy supply. Consequently, the prices and quantities of coal should be freely agreed between the contracting parties in the light of prevailing conditions on the world market.

(10)

In accomplishing its task, the Commission should ensure that normal conditions of competition are established, maintained and complied with. With regard to more especially the electricity market, aid to the coal industry should not be such as to affect electricity producers' choice of sources of primary energy supply. Consequently, the prices and quantities of coal should be freely agreed between the contracting parties in the light of prevailing conditions on the world market. In view of the likely rise in energy prices, the Commission should carry out a regular review of the potential contribution of Union coal to energy security.

(a)

the operation of the production units concerned must form part of a closure plan the deadline of which does not extend beyond 1 October 2014 ;

(a)

the operation of the production units concerned must form part of a closure plan the deadline of which does not extend beyond 31 December 2018 ;

(b)

the production units concerned must be closed definitively in accordance with the closure plan;

(b)

the production units concerned must be closed definitively in accordance with the closure plan unless they have become competitive by the date set out in that plan and the Union’s energy needs require their continued existence ;

(f)

the overall amount of closure aid granted by a Member State for any particular undertaking must follow a downward trend , where the reduction between successive periods of fifteen months must not be less than 33 percent of the aid provided in the initial fifteen month period of the closure plan ;

(f)

the overall amount of closure aid granted by a Member State must follow a downward trend;

(h)

the Member State must provide a plan to take measures aimed at mitigating the environmental impact of the use of coal, for example in the field of energy efficiency, renewable energy or carbon capture and storage. The inclusion of measures constituting State aid within the meaning of Article 107 (1) in such a plan is without prejudice to the notification and standstill obligations imposed on the Member State with respect to these measures by Article 108 (3) TFEU, and to the compatibility of these measures with the internal market.