Energy Policy, Vol.23, No.6, 509-518, 1995
ELIMINATION OF WEST-EUROPEAN COAL SUBSIDIES - IMPLICATIONS FOR COAL PRODUCTION AND COAL IMPORTS
Expanding volumes of international coal supply can be secured in West European harbours at US$50-60 (1993) per tonne. In 1993, Western Europe produced 160 million tonnes of coal, but the cost was far above the import price, High subsidies are needed to keep the production viable. Removal of these subsidies will force a large part of the West European coal industry to close down. A cut of the current output by 91 million tonnes in the medium run, rising to 108 million in the longer run, can be anticipated in consequence of subsidy elimination. Even though coal usage in Western Europe could conceivably decline, as existing obligations to purchase domestic coal are removed, most of the cut production is likely to be replaced by foreign coal. A very large increase in West European coal imports can therefore be anticipated after a discontinuation of the region's coal protection policies.