Coal and the internal energy market

The European Parliament,

- having regard to the ECSC Treaty and in particular Articles

3(a), 54 and 55 thereof,

- having regard to the Community Energy Policy objectives for

1995,

- having regard to its resolutions of 14 September 1988 on

European coal policy, and 13 March 1986 on new Community

rules for State aids to the coal industry,

- having regard to its resolution of 26 May 1989 on the

internal energy market,

- having regard to its resolution of 26 October 1990 on the

REGEN programme,

- having regard to the working paper of the Commission on

security of supply, the internal energy market and energy

policy,

- having regard to the Communication from the Commission on

the future of the ECSC Treaty,

- having regard to the draft European Energy Charter,

- having regard to the motions for resolutions by:

(a) Mr Adam and others on improving the competitivity of

Community coal (B3-0625/89),

(b) Mr Wynn and Mr Adam on the closure of British coal

mines (B3-0006/90),

(c) Mrs García Arias and others on the internal energy

market and its impact on the European coal industry

(B3-0220/90),

(d) Mrs Muscardini and others on the energy shortage (B3-

0266/90),

- having regard to the report of the Committee on Energy,

Research and Technology (A3-0333/91),

A. whereas market integration within the perspective of a

united Europe is not an end in itself but a means of

achieving higher objectives such as sustainable development

and economic and social cohesion,

B. whereas the Community needs, in the long term, a stable and

secure supply of energy at economically and environmentally

acceptable costs, in the context of economic development

which will not lose competitiveness on international

markets,

C. whereas the Community is highly, and increasingly,

dependent on third countries in the field of energy, and

world resources of oil and natural gas are largely

concentrated in geopolitical areas threatened by

instability and are often delivered over lengthy supply

routes with their own attendant dangers,

D. having regard to the lessons learned from the 1973 and 1979

energy crises and the situation recently posed by the Gulf

crisis,

E. having regard to the potential supply of energy from

Eastern Europe and the former Soviet Union, conditioned by

political instability which makes it difficult to assess

the possibilities of coal supplies from the geographical

area,

F. whereas any substantial supplies of coal from Eastern

Europe should be subject to the same economic,

environmental and social requirements as coal from the

Community,

G. whereas European public opinion in the Member States is

divided over the use of nuclear energy and this divergence

of opinion has widened since the accident in Chernobyl, and

others,

H. whereas the Community energy objectives for 1995 are based

on fossil fuels, in particular an increase in the share of

solid fuels, nuclear fission, renewable energies and the

conservation of energy,

I. whereas burning of coal, like other fossil fuels, increases

greenhouse gases, inducing the need to determine other

technologies to harness the energy of fossil fuels with

minimal disturbance to the environment,

J. whereas, in the process of developing the internal energy

market, there is an urgent need to establish objective and

verifiable criteria for transparency regarding the costs of

the various energy sources, particularly nuclear energy,

K. having regard to the importance on the world market of the

European mining technology industry, of standards of safety

and checks on hazards at the workplace, and the level

reached in R & D aimed at demonstrating new technologies of

liquefaction and gasification,

L. having regard to the economic decline being experienced by

mining regions in the European Community, many of which

rely to a large extent on the mining industry and have high

rates of unemployment,

M. having regard to the energy sector's negative impact on the

environmental situation, ranging from the possibility of

accidents in nuclear power stations and the unresolved

problem of storing waste to the greenhouse effect

supposedly induced by fossil fuels,

N. whereas coal contributes to the generation of 40% of

electricity world-wide, while these same power stations are

responsible for only around 8% of the greenhouse gases,

O. whereas the resources earmarked under the THERMIE programme

for research into and development of the clean burning of

coal are inadequate,

1. Affirms that coal is the only fossil energy resource which

Europe has available in sufficient quantities; that

constitutes a strategic resource for the European

Community, and provides a guarantee of secure supplies in

the long term - particularly for electricity and iron and

steel production - while ensuring price stability;

2. Affirms that the process of European integration in

relation to energy markets must unfold in such a way that

each Member State may choose its own energy strategy within

the framework of Community energy guidelines in accordance

with its geographical, economic and regional situation and

the principles of self-supply and diversification;

3. Considers that defining a strategy for security of supply

at Community level entails making an assessment of the role

of indigenous sources, diversifying energy resources, and

laying down a quota in the interests of security of supply

to enable the Member States to use these indigenous

resources,

4. Urges the Commission to ensure the transparency and

comparability of the various forms of aid which influence

the formation of prices and production costs of all energy

sources;

5. Stresses that there is scarcely any internal trade in coal

within the European Community and that, as a consequence,

state aid does not distort free intra-Community

competition;

6. Considers that a larger reduction in Community coal

production within the framework of the internal market

would result in an even greater increase in the volume of

coal from third countries and consequently in coal prices;

7. Points out the risk entailed by the present trend towards

excessive exploitation of non-renewable natural gas

resources for electricity production; takes the view that

it is a matter of general interest to promote long-term

cooperation in the field of energy in Europe, for the sake

of the optimum use of energy sources, guaranteed energy

supply and protection of the environment;

8. Takes the view that Community coal production must respond

to energy guidelines which take account both of the long-

term security of supply in the Community and its Member

States and the economic costs of energy in the context of

the internal market; as well as criteria based on public

acceptance, environmental considerations and the principle

of economic and social cohesion and that where

international levels of coal productivity are unattainable

the Community's Structural Funds must be used to introduce

alternative economic activities in areas where coal is the

monoculture of a locality;

9. Stresses that Community coal production benefits all of the

twelve Member States since it acts as a stock which deters

increases in the price of imported coal and other fossil

fuels used to generate electricity;

10. Affirms that, unlike the Community market, the

international energy market is an imperfect gauge of stable

costs in the long term, owing to the continued instability

of the Middle East, North Africa and the Commonwealth of

Independent States;

11. Stresses that long-term contracts based on the reference

price are necessary to safeguard investment, guarantee

supplies and reduce the volatility of prices;

12. Recalls that the current level of energy prices is based on

the price per barrel of oil, which makes prices extremely

volatile due to fluctuations in the exchange rate of the

dollar, among other reasons. In the case of coal, European

prices must take into account labour costs, marginal costs

or environmental and working practices which are socially

unacceptable in the Community, or may simply fail to

reflect true production costs, as happens in the planned

economies;

13. Recalls that the positive or negative decisions taken in

the coal sector have a significant and lasting impact on

the level of employment, both direct and indirect or

induced, in many regions of the Community which already

suffer from a high level of structural problems;

14. Notes that the medium-term cost to the budget of the

employment measures which accompany the restructuring of

the coal industry is just as large as the cost to the

budget of sustaining an equivalent number of jobs in mining

and thus has a most unfavourable impact on the revenue-cost

ratio;

15. Considers that, as the European Community urges the

restructuring of the mining sector, the Commission should

be responsible, along with national, regional and local

administrations, for the design and follow-up of

reindustrialization programmes in these areas and should

make appropriate budgetary provision;

16. Insists that all restructuring programmes put forward by

the Commission must be subject to full consultation with

the mining unions;

17. Points out that mining in the European Community is

concentrated in particular regions, resulting in situations

characterized by industrial monoculture, which makes such

regions extremely dependent on trends in this sector of the

economy, highlighting the urgency for industrial

diversification;

18. Affirms, therefore, that the policy of fostering high-

quality coal technology may contribute to redistribution of

wealth and represents one aspect of the principle of

economic and social cohesion in the European Community;

19. Highlights the particularly delicate situation of mining

areas situated in peripheral regions of the Community, far

removed from the Community's main lines of communication

and economic development, in which it is more difficult to

locate other productive investment and thus achieve

industrial diversification;

20. Calls on the Commission and the Member States to promote,

through special regional development programmes, the

setting-up of industries or economic activities which will

provide as many jobs as those lost through the projected

restructuring plans;

21. Recalls the link which exists between the coal extraction

industry, the mining supply industry and research and

development, and their importance in external markets,

through associated industry;

22. Warns of the danger that these markets might be lost should

there be a significant reduction in European mining;

23. Proposes that the ECSC Treaty should be integrated into the

EEC Treaty and steps should be taken to ensure that the

accumulated budgetary reserves are earmarked for the

objectives laid down in the ECSC Treaty and that

opportunities are created for providing budgetary resources

for research into mining and environmental technology, the

health and safety of workers and for accompanying social

measures (Article 56 of the ECSC Treaty);

24. Reaffirms its stance that until the integration of the

Treaties has been completed, new provisions should be drawn

up so as to allow the policy of state aid for the Community

mining industry to be continued, which is justified by

criteria such as security of supply, improved

competitiveness, regional development, the resolution of

social problems, increased capacity and environmental

improvements;

25. Reaffirms Parliament's call for the borrowing and lending

operations of the ECSC to be incorporated into the General

Budget of the Community, and proposes that the ECSC

reserves be allocated in such a way as to provide optimal

and targeted assistance to facilitate industrial

diversification and clean up the environmental pollution

caused by mining, the iron and steel industries, etc;

26. Calls on the Commission to examine the conditions under

which the social measures envisaged in the ECSC Treaty in

its present form can be adapted to the changing needs of

the regions undergoing conversion of the mining and iron

and steel industries;

27. Considers that energy and environmental aspects should

ensure that international projects are drawn up allowing

real progress to be made throughout Europe and world-wide

and considers that the European Community must play a

pioneering role in this;

28. Recognizes the significant progress which has been made

with the incorporation of clean coal technologies,

emphasizes the opportunities offered by gasification and

stresses that EEC financial support should continue to be

given with a view to research in the field, the development

of demonstration projects and the extension of these

technologies to less developed European regions;

29. Believes that laying down codes of good conduct for coal-

producing industries and electricity companies is an

important step in the fight against pollution and in

improving the environment;

30. Recognizes that the contribution to gaseous emissions

varies among the individual Member States and that,

consequently, the less developed countries cannot be made

responsible for limiting CO2 emissions or applying fiscal

measures to the same extent without restricting their

growth and competitiveness; stresses that it is advisable

to make greater use of economic instruments in the field of

energy and the environment with the aim of making measures

for energy-saving, the rational use of energy and the use

of renewable sources of energy more economical, and

limiting environmental pollution, particularly in the case

of fossil fuels;

31. Considers that the introduction of fiscal measures

throughout the Community in the sphere of the environment

should take into account:

(a) the negative contributions to the environment made by

all energy sources, together with the whole range of

greenhouse gases (including CFCs) and the

international implications,

(b) the possible effects of higher energy costs on

European competitiveness, for example in the steel

industry,

(c) the need to carry out thorough and comprehensive cost-

benefit assessments which would provide the basis for

the adoption of such measures,

(d) the various implications which higher energy costs

might have for particular Community countries, either

because they use more or less coal in their energy

production or because of the impact on the general

competitiveness of their undertakings;

32. Calls on the Commission to submit a report setting out a

cost-benefit analysis of the foregoing proposals;

33. Considers that these levies are counterproductive as

regards the distribution of income and that if they are

introduced there must be a proportionate increase in budget

expenditure to compensate; in particular the revenue from

such taxes must be channelled into the budgetary funds

designed to eliminate social and regional disparities and

into research and development programmes and investments

for environmental protection in the Community, the

countries of Eastern Europe and the developing countries;

34. Stresses that nuclear energy must under no circumstances be

favoured by a tax on CO2;

35. Urges that in conjunction with the introduction of a tax on

CO2, an environmental levy on nuclear-produced electricity

should be introduced, reflecting the higher cost of the use

of fossil fuels compared with nuclear power and that the

resulting revenue should be used for research and

development on the increased use of renewable energy

sources;

36. Finally calls on the Commission to:

(a) initiate a dialogue with the social partners and

interested parties on the economic, social and

regional aspects of Community coal production, with a

view to finding optimal ways of guaranteeing security

of supply, the competitivity of Community coal,

economic diversification and environmental protection;

(b) propose a ten year research development and

demonstration programme with sufficient financing, and

on a scale similar to the coal technology programmes

currently under way in Japan and the US, to

concentrate in particular on:

(i) gasification technology (Integrated

Gasification Combined Cycle)

(ii) small advanced technology coal fired stations

for Combined Heat and Power networks

(iii) the construction of a demonstration coal

refinery to further develop liquefaction

technology

(iv) techniques to neutralise CO2 emissions

(v) the combining of large-scale advanced coal

technology and hydrogen technology

(c) establish a reference price band for Community coal to

recognize the real strategic value based upon

- at the lower boundary:

(i) an agreed figure for the long-run sustainable

price of internationally trade coal expressed

in ECU,

(ii) an additional premium to recognise the effect

Community coal has in restraining the price of

traded coal;

- at the upper boundary:

(i) an assessment of value reflecting security of

supply and other Community objectives

(ii) the social and environmental costs which are

not reflected in world market prices.

In addition, a quota shall be laid down for security

of supply in each Member State, based on the specific

energy requirements of each State, to facilitate the

use of their own resources with the assistance of

national aids for electricity generation.

Both measures should be in place by the expiry of

Commission Decision 2064/86/ECSC.

(d) investigate as a matter of urgency the anti-dumping

complaint lodged by Community coal producers, and take

appropriate action;

(e) create the conditions whereby intra-Community trade in

coal is encouraged in accordance with the provisions of

the ECSC Treaty;

(f) actively encourage long-term contracts linked to the

quota for security of supply between Community coal

producers and major consumers such as power stations and

steel industry operators, to provide a level of

investment security equivalent to that currently enjoyed

by the gas industry;

(g) urge the Council to set up a financial instrument under

which Community aid can be earmarked for investments to

enhance the competitiveness and environmental

acceptability of the extraction of coal, lignite and

peat;

(h) conduct a comparative international survey of national

social and environmental practices in the coal sector

which will make it possible to assess the production

costs of the exporting countries;

(i) provide Community funding, within the PHARE programme or

through the creation of an appropriate legal instrument,

for example, in the context of the Energy Charter, for

the transfer of energy technology to Eastern European

countries, ensuring appropriate consultation with the

new social partners;

(j) ensure the prolongation and reinforcement of the RECHAR

programme after 1993, retaining and strictly applying

the principles of complementarity and additionality, and

to step up the allocation of aid to conversion;

(k) consider various ways to support and improve the

competitive development of a strong auxiliary mining

industry, on both the internal and international

markets;

(l) extend, if appropriate, Commission Decision 2064/86/ECSC

for a further transitory period after 1993, taking into

account the specific needs of the Community's coal

industry;

(m) encourage the use of coal as a chemical feed-stock;

(n) reduce Community tax on ECSC coal;

(o) encourage the replacement of exhausted mines by new

capacity.

37. Calls on the governments of the Member States, in the

context of proposed EC Treaty revision, to:

(a) explicitly recognize security of supply as the prime ob-

jective of Community energy policy and the importance of

indigenous Community coal resources for its achievement;

(b) ensure that the European Community's responsibilities in

the energy field serve as a framework guaranteeing

consideration of specific national features in national

energy policies;

(c) with regard to the integration of the ECSC Treaty,

incorporate in the EEC Treaty provisions which will

guarantee in future the particular importance of the

coal and steel sectors, as laid down in the ECSC Treaty;

38. Urges the Commission and the Member States to take

security of supply as one of their objectives in

negotiations for a European Energy Charter, and thus to

defend the Community coal industry;

39. Instructs its President to forward this resolution to

the Commission, the Council, the governments of the

Member States, and national parliaments.