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European Commission - Press release

State aid: Commission clears PLN 7.95 billion Polish support for closing coal mines

Brussels, 18 November 2016

The European Commission has found Poland's plans to provide PLN 7.95 billion of support to alleviate the social and environmental impact of closing uncompetitive coal mines by 2018 to be in line with EU state aid rules. The Commission concluded the support would not unduly distort competition.

Following the decision taken by Poland to close uncompetitive Polish coal mining units, in September 2016, Poland notified to the Commission plans to provide public funding of PLN 7.95 billion (approximately €1.79 billion) to ensure their orderly closure.

Responsibility for decisions on whether or not to close public coal mines rests with Member States. EU state aid rules, in particular Council Decision 2010/787/EU, allow Member States to support the closure of uncompetitive coal mines in order to alleviate the social and environmental impact.

The Commission's assessment has found that, in line with the Council Decision, the aid aims to ease the closure process by providing financial support totalling PLN 7.58 billion (approximately €1.71 billion) to those workers who have lost, or will lose, their jobs due to the closures. In particular, the state support will fund severance payments, compensatory pensions and social security benefits for these workers. Furthermore, it will be used to secure mine shafts and decommissioning of mine infrastructure, repair damage to the environment caused by mining and re-cultivate land after the mine closures. The remainder of the aid will cover production losses of the mines until closure. 

 

Background

In December 2010, the Council of the European Union adopted Council Decision 2010/787/EU on state aid to facilitate the closure of uncompetitive coal mines. Under the Decision, state support to the coal industry is only allowed to facilitate the closure of a mine by covering production losses and exceptional costs resulting from the closure. The Decision was adopted against the backdrop of EU policy to encourage renewable energy sources and a sustainable and safe low-carbon economy, and the diminishing role of indigenous coal in the overall energy mix of EU Member States.

Closure aid can cover operational losses subject to certain limits and must be based on an agreed closure plan. The Council Decision requires that a mine receiving closure aid must cease mining activities by the end of 2018 at the latest.

Aid to cover exceptional costs resulting from activities related to the closures, notably to mitigate social costs such as the costs of social welfare benefits or early retirement, costs incurred in safety or site rehabilitation for the production units subject to closure, as well as the pumping and cleaning of water from decommissioned mines can be paid out after the closures until 2027 and must also be based on an agreed closure plan.

The non-confidential version of the decision will be made available under the case number SA.41161 in the State aid register on the competition website once any confidentiality issues have been resolved. New publications of state aid decisions on the internet and in the Official Journal are listed in the State Aid Weekly e-News.

IP/16/3824

Press contacts:

General public inquiries: Europe Direct by phone 00 800 67 89 10 11 or by email


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