This is a question of fairness vis à vis competitors that operate without state aid. 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 toward supporting the social and environmental costs of doing so,” said Joaquín Almunia, Commission vice president, competition policy. “Renewable, clean energy is the way to go, but we cannot ignore the dire regional economic and social consequences that would follow a sudden closure of the loss-making mines at this time of low or no growth and high unemployment.”

Hard coal production in the EU is small compared with demand and falling (147 million metric tons in 2008 or 2.5% of world production). The EU depends on imports for more than half of its use in coal-fired power stations.  Total aid to the hard coal sector has been halved to € 2.9 billion in 2008 from € 6.4 billion in 2003. The fall in production aid has fallen by 62% to 1,288 million of the total in the same period, as a higher and increasing proportion is being directed toward covering the social and environmental costs of mine closures. The proposed regulation would continue to give member states a common and legal framework to address the costs of counseling and training the workers of loss-making mines for other jobs, the costs of early retirement for those that will leave the active population and the impact on related sectors such as mining technology, geology or environmental technologies. Besides the social costs, there are also the environmental costs involved in the cleaning up of the mining sites, the removal of waste water, underground safety work and other rehabilitation costs.

The coal sector employs around 100,000 people in Europe: 42,000 in the coal mining industry itself and more than 55,000 in related industries. The mines that rely on operating subsidies are located mostly, but not only, in the Ruhr region, in Germany, in northwest Spain and in the Jiu Valley in Romania. More than 40% of electricity in Germany is produced from coal, roughly half of which is hard coal. Coal’s share of electricity production in Romania is also around 40%, most of which hard coal. In Spain, the share is around 25%, also mostly hard coal.