2010/787/EU: Council Decision of 10 December 2010 on State aid to facilitate the closure of uncompetitive coal mines

• Published date: 21 December 2010
• Official Gazette Publication: Journal officiel de l’Union européenne, L 336, 21 décembre 2010,Gazzetta ufficiale dell’Unione europea, L 336, 21 dicembre 2010,Diario Oficial de la Unión Europea, L 336, 21 de diciembre de 2010

21.12.2010 EN Official Journal of the European Union L 336/24

---

COUNCIL DECISION

of 10 December 2010

on State aid to facilitate the closure of uncompetitive coal mines

(2010/787/EU)

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty on the Functioning of the European Union, and in particular point (e) of Article 107(3) thereof,

Having regard to the proposal from the European Commission,

Having regard to the opinion of the European Parliament (1),

Whereas:

(1) Council Regulation (EC) No 1407/2002 of 23 July 2002 on State aid to the coal industry (2) expires on 31 December 2010.

(2) The small contribution of subsidised coal to the overall energy mix no longer justifies the maintenance of such subsidies for securing the supply of energy in the Union.

(3) The Union’s policy of encouraging renewable energy sources and a sustainable and safe low-carbon economy does 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.

(4) However, in the absence of sector-specific State aid rules, only the general State aid rules apply to coal. In this context, uncompetitive coal mines, currently benefiting from aid under Regulation (EC) No 1407/2002, may no longer be eligible for aid and may be forced to close.

(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, in particular inherited liabilities.

(6) This Decision marks the transition, for the coal sector, from the application of sector-specific rules to the application of general State aid rules which are applicable to all sectors.

(7) In order to minimise the distortion of competition in the internal market resulting from State aid to facilitate the closure of uncompetitive coal mines, such aid should be degressive and strictly limited to coal production units that are irrevocably planned for closure.

(8) In order to mitigate the environmental impact of the production of coal by coal production units to which closure aid is granted, the Member States should establish a plan of appropriate measures, for example in the field of energy efficiency, renewable energy or carbon capture and storage.

(9) Undertakings should be eligible for aid to cover costs which, in accordance with normal accounting practice, do not directly affect the cost of production. Such aid is intended to cover exceptional costs that arise from the closure of their coal production units. In order to avoid such aid from unduly benefiting undertakings that close only some of their production sites, the undertakings concerned should keep separate accounts for each of their coal production units.

(10) In accomplishing its task under this Decision, the Commission should ensure that normal conditions of competition are established, maintained and complied with. With regard, more especially, to 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.

(11) The application of this Decision should not exclude that aid to the coal industry may be found compatible with the internal market on other grounds. In this context, other specific rules, in particular those concerning aid for research, development and innovation, aid for environmental protection and aid for training activities, continue to apply within the limits of the maximum aid intensities, unless they provide otherwise.

(12) The Commission should assess the measures notified on the basis of this Decision and take decisions in accordance with Council Regulation (EC) No 659/1999 of 22 March 1999 laying down detailed rules for the application of Article 93 of the EC Treaty (3).

(13) To avoid any discontinuity between measures envisaged in Regulation (EC) No 1407/2002 and the measures foreseen in this Decision, this Decision should apply from 1 January 2011,

HAS ADOPTED THIS DECISION:

CHAPTER 1

INTRODUCTORY PROVISIONS

Article 1

Definitions

For the purposes of this Decision, the following definitions shall apply:

(a) ‘coal’ means high-grade, medium-grade and low-grade category A and B coal within the meaning of the international codification system for coal laid down by the United Nations Economic Commission for Europe (4);

(b) ‘closure’ means the permanent cessation of production and sale of coal;

(c) ‘closure plan’ means a plan drawn up by a Member State providing for measures culminating in the definitive closure of coal production units;

(d) ‘coal production unit’ means underground or opencast coal workings and related infrastructure capable of producing raw coal independently of other parts of the undertaking;

(e) ‘coal year’ means calendar year or another 12-month period used as a reference for contracts in the coal industry;

(f) ‘production costs’ means total costs related to current production, including mining operations, operations for the dressing of coal, in particular washing, sizing and sorting, and transport to the utilization point, normal depreciation and market-based interest charges on borrowed capital;

(g) ‘current production losses’ means the positive difference between the coal production cost and the selling price at utilisation point freely agreed between the contracting parties in the light of the conditions prevailing on the world market.

CHAPTER 2

COMPATIBILITY OF AID

Article 2

Principle

1. In the context of closure of uncompetitive mines, aid to the coal industry may be considered compatible with the proper functioning of the internal market if it complies with the provisions of this Decision.

2. Aid shall cover only costs in connection with coal for the production of electricity, the combined production of heat and electricity, the production of coke and the fuelling of blast furnaces in the steel industry, where such use takes place in the Union.

Article 3

Closure aid

1. Aid to an undertaking intended specifically to cover the current...