COAL SUBSIDIES

Mining study

On 16 July, the Secretary of State announced that the DTI would “commission an independent study of remaining reserves at existing deep mines to identify where investment support might be directed.” Following this announcement the Department invited tenders from all those companies who expressed an interest in conducting the review. After careful consideration of all tenders, the DTI concluded that IMC Group Consulting Ltd were to be appointed for the job. Therefore, IMC has been commissioned by the Department to complete an independent study at existing deep mines. The objective of this study is to help us make an objective assessment of which of the relevant coal reserves are potentially viable. They will look at the reserves of the main coal deep mines in the UK, namely: Clipstone, Daw Mill, Ellington, Harworth, Kellingley, Maltby, Rossington, Thoresby, Welbeck, Aberpergwm, Betws, Eckington, Hatfield (including Thorne reserves), Hay Royds and Tower.

The Original Scheme (UKCOAS)

On 15 November 2000, the then Secretary of State for Trade and Industry, Stephen Byers, announced the lifting of the stricter consents policy on the building of new gas fired power stations and the approval of the "UK Coal Operating Aid Scheme" (63 Kb) also available in MS-Word 97 (77Kb) by the European Commission (Link to Press Notice). The Commission approved the Scheme as notified by the DTI on 26 July 2000.

Under the Scheme, as approved by the Commission in 2000, subsidy is payable in relation to three tranche periods:

Tranche 1 (17 April 2000 to 31 December 2000);
Tranche 2 (1 January 2001 to 31 December 2001); and
Tranche 3 (1 January 2002 to 23 July 2002).

The deadline for submitting applications under the Scheme has now passed. 

Extension of the UK Coal Operating Aid Scheme

Patricia Hewitt, Secretary of State for Trade and Industry, announced in a press notice on 16 July 2002 a targeted extension of the UK Coal Operating Aid Scheme (UKCOAS), to the end of 2002, in order to help secure the long-term future of viable mines under exceptional short-term pressure. On 24 July, the DTI went out to consultation on proposed details for the extension (PDF format (137Kb) and MS Word format (122Kb)). The consultation period ended on 23 August 2002, and 23 responses were received. A response to the consultation (Available on  PDF format (129Kb)) was issued on 17 September 2002. Tranche 4 subsidy will only be available for production units in respect of which Tranche 3 subsidy has been paid. The deadline for submitting applications for Tranche 4 subsidy is 18 October 2002. The response to the consultation explains what details need to be submitted.

Reconciliation Process

Reconciliation is the process by which adjustment is made to the grant in the event of the actual eligible losses incurred  being less than those projected in the Application. Reconciliation forms should be submitted within three months of the end of the last Financial Year which overlapped with the relevant subsidy period. Reconciliation for all Tranche 1 subsidy payments has now been completed. Reconciliation report forms for Tranche 2 (1 January to 31 December 2001) Reconciliation Report Form S2R (515 Kb) ; Tranche 3 (1 January to 23 July 2002) Reconciliation Report Form S3R (707Kb) ; and Tranche 4 (24 July to 31 December 2002) Reconciliation Report Form S4R (697Kb) are now available from this site . These should be used in accordance with the subsidy period to which the reconciliation refers.

List of applicants

The application forms make clear that, in the interest of transparency, the DTI will publish on its website the identity of each production unit that applies for subsidy. Where a subsidy is awarded, the fact of the award , although not necessarily the amount of the award, will also be published. Accordingly a list of applicants is available and this will be updated on a regular basis.

The Import Parity Price Panel

This site should be the first port of call for producers seeking information on the coal subsidy scheme. It is also intended to be the main vehicle for the Import Parity Price (IPP) Panel to communicate with the coal community at large. Potential applicants are therefore advised to check this site on a regular basis.

Environmental Appraisal

The then Minister for Energy, Helen Liddell, undertook to the Environmental Audit Committee on 13 June 2000 to publish an Environmental Appraisal of the Coal Subsidy Scheme. Accordingly, this document has been made available on this site.

Contact

If you have any questions regarding the subsidy scheme and the application forms, or have any difficulty in downloading the documents on this site, please contact:

Arantxa Fernandez
Department of Trade and Industry
Energy Innovation and Business Unit- Coal Sponsorship
Bay 295
1-19 Victoria Street
London, SW1H 0ET

Tel: 020 7215 5116
Fax: 020 7215 2753
E-mail: arantxa.fernandez@dti.gsi.gov.uk

Last updated 23 September 2002