EU seeks to end coal subsidies by 2014

(BRUSSELS) - Europe's top competition enforcer said on Tuesday he wants national governments to end state aid to the coal industry by 2014, eight years earlier than initially sought.

"The aim of the proposal is to ensure a definitive closure of uncompetitive mines by 15 October 2014," said EU competition commissioner Joaquin Almunia in a statement, ahead of it being debated by member states.

He said the European Commission "will only allow operating aid to mining companies that have a closure plan," acknowledging 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."

The existing subsidy regime for the coal industry -- the origins of the 27-nation bloc that is now home to half a billion people and the world's biggest trading market -- was due to expire at the end of this year.

Last month, the commission warned of a "flood of redundant mine workers" and suggested that "up to 100,000 jobs may be at stake," recommending the end of 2022 as a final deadline after phasing out subsidies predominantly found in Germany's Ruhr valley, in northwest Spain and in Romania.

The commission said that total aid to the sector had been halved to 2.9 billion euros (3.7 billion dollars) in 2008 from 6.4 billion euros in 2003.

Europe is reponsible for just 2.5 percent of world hard coal production, and is increasingly moving towards renewable sources alongside nuclear energy.

Coal Regulation - guide