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19.2.2.  EU Solid fuel market

    The single market in the coal sector was regulated, until July 2002, by the European Coal and Steel Community (ECSC) Treaty [see section 2.1]. Thanks to this Treaty, import and export taxes, taxes having equivalent effect, and quantitative restrictions on product movement were abolished. The Paris Treaty laid down rules for agreements, company concentrations and dominant positions, and prohibited unfair competitive practices and discriminatory practices, i.e. the application by a seller of dissimilar conditions to comparable transactions and especially on the grounds of the nationality of the buyer. It thus succeeded to ensure that users have equal access to sources of production and to promote the development of international trade. The duration of the ECSC Treaty was limited to fifty years and when it expired, on 23 July 2002, the "acquis communautaire" in the coal sector - concerning notably the freedoms of movement of products, persons, services and capital – is guaranteed by the Treaty on the functioning of the EU (ex EC treaty).

    The ECSC has enabled Europe to maintain a leading position in the field of mining technology and clean coal combustion. Considerable spin off effects have also been seen in other industries. Although the ECSC Treaty succeeded in creating a common coal market, it was not able to prevent coal from being swept aside by oil, which is a more flexible, easier to handle and a less expensive product. Preservation of coal's supremacy would have required measures much more drastic and expensive, in the form of a coal policy modelled on the Common Agricultural Policy [see sections 21.1.1 and 21.4]. Europe of the1960's, awash with oil supply, was not prepared to pay the price of its energy independence. Thus, investment in the coal industry of the EU continued to fall during the 1990s in the face of international competition and as a result of the gradual shift in Member States' domestic policies.

    The coal industry has not had luck on its side. When the common market was taking its first steps, European coal undertakings only partially benefited from soaring demand because extraction conditions and limited financing possibilities made sizeable short-term production rises impossible. Then, from 1958 onwards, the decisive entry of oil dealt the coal industry a hard blow obliging the closure of most coalmines in Europe. The remaining coalmines were faced with such large cost rises that even after the great surge of oil prices in the 1970s, they only managed to stabilise production.

    However, the common coal market has several achievements, such as the gradual switch from a regulated management system conditioned by the war to a free market governed by competition; the abolition of agreements, concerted practices, dominant positions and other monopoly structures which were characteristic of this market; the impact of integration on intra-European trade; and last but not least, the orderly retreat of the coal industry, which has meant that 700,000 workers have been laid off in this sector during the 1970s and the 1980s in the original Member States without social upheaval thanks to European measures providing aid, and that none of these States gave in to the temptation to pass on its difficulties to its neighbours, which could have been catastrophic.

    Practically, only Germany, France, the United Kingdom, Poland, Hungary and the Czech Republic still produce coal. Given that the objective of security of energy supply justifies maintaining subsidised coal production, albeit on acceptable economic terms, the new Regulation on State aid to the coal industry  is meant to facilitate the closure of uncompetitive coal mines, must be degressive and strictly limited to coal production units that are irrevocably planned for closure [Regulation 2010/787]. The information submitted to the Commission by the Member States is based on common definitions and criteria, so as to ensure comparability of data and enable the Commission to monitor compliance with the conditions for the granting of aid [Decision 2002/871].

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    Your roadmap in the maze of the European Union.

    Based on the book of Nicholas Moussis:
    Access to European Union law, economics, policies
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