EU climate chief insists coal aid to end 2014

BERLIN (Reuters) - The European Union’s executive Commission is determined to stick to its new target of ending state subsidies for coal mines by October 2014, Environment Commissioner Connie Hedegaard said on Friday.

A coal miner fixes his lamp after coming out of the mine at the RAG coal mine "Hamm-Ost" in the western city of Hamm, September 30, 2010. ENERGY EMPLOYMENT BUSINESS)

“European taxpayers cannot continue to pay a lot of state aid to unprofitable mines,” she told Reuters in Berlin.

State aid for loss-making mines was due to be phased out this year but the Commission in July allowed the industry an additional four years.

Hedegaard’s defense of the 2014 exit date pits her against Germany, where coal mining and coal-to-power generation play a big part in the current energy mix, which is why the country has held out for an even longer extension up to 2018.

Thousands of jobs in populous North-Rhine Westphalia state depend on hard coal mining and politicians at local and federal level have urged the government to persuade Brussels to relax its proposal.

Hedegaard stressed she saw no leeway beyond October 2014.

The Commission said it set the date for subsidies to stop because hard coal is much cheaper from overseas mines. It wanted to spare taxpayers and at the same time turn EU carbon-based economies into ones using predominantly renewable energy.

“That (paying subsidies beyond 2014) is simply not consistent with our normal way of handling things with different sectors, and it is of course also not consistent with all the good ideas as to how we could move in the direction of a low-carbon society,” Hedegaard said.

“I cannot control what member states or others will be saying, but I know that this is a very, very clear position of the European Commission,” she said.

The Commission has the right to decide on state aid matters. Member states have started discussions on the legislative proposal which the current Belgian presidency aims to pass.

Germany, like Spain, has a difficult stance as it is in the minority of five EU members with large mining industries versus 22 others that do not mine coal, or do not pay aid.

However, Spain on Wednesday gained approval from the EU Competition Commissioner to support its coal mining industry until 2015.

Writing by Stephen Brown and Vera Eckert