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Coal Subsidies In Germany And Spain

Volume 592: debated on Thursday 30 July 1998

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asked Her Majesty's Government:What specific measures they have taken to combat anti-competitive coal subsidies in Germany and Spain; and what benefits have been achieved as a result of these actions. [HL2722]

In the case of Spain we have formally complained to the European Commission about discriminatory application of limits on the sulphur content of coals from different ECSC resources and have received assurances that UK coal will be treated on the same basis as Spanish coal. This should open the Spanish market to a range of English deep-mined coals.We have also laid a formal complaint against Spanish state aid for coal questioning whether the required criteria of ultimate viability has been fulfilled for all those producers receiving operating aid under the ECSC Coal State Aid code. We are pressing for confirmation from the Spanish Authorities that a subsidy of 1 peseta per kilowatt/hour available to Spanish power-station operators burning Spanish coal is equally available in respect of UK coal.In the case of Germany, we conveyed a complaint to the European Commission on behalf of Celtic Energy Ltd. setting out how state aid provided to Sophia Jacoba and Ibbenburen mines led to a distortion in the anthracite market in the ECSC and particularly in the UK. Following an investigation the Commission found there had been abuse of state aid and reached a decision on 29 July requiring repayment of nearly DM 20 million state aid by the German producers. This decision provides UK producers with an assurance that such unfair practices will not recur and should help to open up continental markets for competitive UK exports of anthracite.The Government are monitoring closely the commercial negotiations UK producers are conducting on the export of power-station coal and briquettes to the German market in competition with state-aided German coal. They have also drawn to the Commission's attention possible elements of state aid in the proposed merger of the main German coal producers.