Select Committee on European Scrutiny Thirty-Sixth Report





COM(02) 176

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

Legal base:

Article 10, Commission Decision No 3632/93/ECSC


Document originated:

10April 2002

Deposited in Parliament:

29 April 2002


Trade and Industry

Basis of consideration:

EM of 14 May 2002

Previous Committee Report:


To be discussed in Council:

None scheduled

Committee's assessment:

Politically important

Committee's decision:




    1. The Commission reports annually to the Council, the European Parliament and the European Coal and Steel Community Consultative Committee on the application of the Community rules on state aid to the coal industry.
    2. The document

    3. This report covers the application of Community rules in 2001 and provides an overview of the EU coal industry in terms of production, employment, demand and trade. The majority of the report deals with an analysis of coal demand, trade and imports in the four coal-producing Member States (France, Germany, Spain, and the UK). The report examines the financial aid granted in France, Germany, Spain and the United Kingdom to their coal industries in 2001 and the reasons for doing so. For example, the German Government provided _1,967 million operating aid (Article 3), _1,604 million for reduction in activity (Article 4), _36 million to maintain underground workforce (Article 3) and _1,086 million to cover exceptional costs (e.g. inherited liabilities such as social security benefits). The Commission notes that the increase in the allocation may be explained by the closure of three production sites (Westfalen, Gottelborn/Reden and Ewald/Hugo) in the course of the year. Operating aid was restricted, as from 1996, to coking coal and aims to cover the difference between production costs and selling prices.
    4. On the UK, the report briefly reviews the restructuring of the industry following privatisation and the more recent changes in the industry which led to the introduction of the UK Coal Operating Aid Scheme approved by the European Commission in November 2000. It lists the individual allocations of aid under that scheme approved by the Commission in 2001.
    5. The Government's view

    6. The Department says the document has no significant impact on UK interests.
    7. Conclusion

    8. This is a useful document summarising the situation as regards State aid in the coal industry. Although we are drawing the document to the attention of the House, we do not think any further action is needed, and we are therefore clearing it.


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