EU Competitveness Council Extends State Aid for Loss-making Coal Mines Until 2018

EU Ministers meeting within the Competitiveness Council on 10 December 2010  adopted a new coal regulation enabling Member States to grant State aid to facilitate the closure of uncompetitive mines until 2018, following the expiry of the current Coal Regulation (Council Regulation (EC) N° 1407/2002 of 23 July 2002) on 31 December 2010.

Initially the Commission had proposed 1 October 2014 as the cut-off date for state aid. This was met with opposition especially by Germany. In February 2007, the German Federation, the states of North Rhine-Westphalia and Saarland, the trade union IG BCE and RAG AG, which pools the German hard coal mining activities, agreed on a phase-out of subsidies for hard coal mining until 31 December 2018. While Economics Minister Rainer Brüderle favoured the earlier phase-out date, Chancellor Angela Merkel said she wanted to abide by the 2018 phase-out date, agreed in 2007.

The Commission presented a new proposal on 8 December, which formed the basis of the agreement in the Council of Ministers. It  gives the possibility to grant state aid for the closure of uncompetitve hard coal mines up to 31 December 2018 on condition that a plan mitigating the environmental impact of the use of coal is put in place and the overall amount of aid granted by a member state is gradually reduced so as to prevent a distortion of competition. Subsidies will have to be lowered by at least 25% until 2013, by 40% until 2015, by 60% by 2016 and by 75% by 2017.

Federal Minister of Economics Rainer Brüderle said he welcomed the fact that as of 2018 no tax money in Germany and elsewhere in the EU was spent on uncompetitive hard coal mines.

Source:  Europa.EU, Euroalert, Federal Ministry of Economics and Technology

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