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Commission proposes closure of uncompetitive mines Uncompetitive coal mines in the EU will have to be closed down by October 2014 under a new state aid regulation proposed by the European Commission. The aim of the proposal is to end operating subsidies to uncompetitive mines and to redirect any state subsidies towards overcoming the social and environmental impacts of mine closure. The regulation concerns hard coal and will affect mainly Poland, Germany, the UK, Czech Republic and Spain. Under the proposal, Member States would be allowed to continue granting operating aid as long as they present plans to close the mines by 1st October 2014. There would also have to be a minimum 33 per cent reduction in subsidies per 15-month period. Any closure aid would be conditional on the presentation by the Member State a plan of appropriate measures, for example in the field of energy efficiency, renewable energy or carbon capture and storage, to mitigate the negative environmental impact of aid to coal. "The aim of the proposal is to ensure a definitive closure of uncompetitive mines by 1st October 2014," said Joaquín Almunia, Commission Vice President in charge of competition policy. "There should be no doubt about this. Companies need to be viable without subsidies." Almunia continued: "This is also in the interest of taxpayers and of government finances that are considerably constrained. The Commission will only allow operating aid to mining companies that have a closure plan and the subsidies should go increasingly towards supporting the social and environmental costs of doing so." The hard coal sector employs around 100,000 people in Europe. The mines that rely on operating subsidies are located mostly in Germany's Ruhr region, in north-west Spain and in the Jiu Valley in Romania. Poland accounts for more than half of the EU's hard coal production. Total aid to the hard coal sector has halved from €6.4 billion in 2003 to €2.9 billion in 2008. Source: Utility Week © Faversham House Group Ltd 2010. News articles may be copied or forwarded
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