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Spain's government has held meetings with the European Commission with a view to propping up its coal industry which is suffering accelerated closures due to low international prices, the country's industry ministry said Friday.

Industry minister Jose Manuel Soria met with the EU's competition commissioner Margrethe Vestager last week to ensure that a plan of "ordered closures" through to 2018 is maintained.

In the meeting, Spain proposed a temporary mechanism covering the period to 2018 which could guarantee the ongoing use of domestic coal, the ministry said, without elaborating.



Spain had a mechanism of incentives for domestic coal until 2014, which were eliminated by the EU as a form of state aid, as part of its program to close all uneconomic mines by 2018.

The ministry said that the Spanish case had been well received and that the two sides would look for a solution that was compatible with European regulations.

Soria argued that, given Spain's isolated nature, security of supply is relatively vulnerable and requires domestic supply.

A potential solution would be to find a legal way for Spain to compensate the burning of domestic coal up to 2018, the ministry said.

Spanish unions have said that as many as 2,000 jobs are dependant on a solution.

Spain's domestic coal sector has shrunk considerably since 1990, when it was producing 20 million mt/year, dropping to 4.4 million mt in 2014.

Imported coal volumes have also fallen in the long-term, from around 20 million mt/year between 2000 and 2005 to an average of 16 million mt in the five years to 2014.

In 2014, 63% of Spain's coal-fired power generation was via imported coal, according to ministry data.

Spanish coal burn increased 24% to 50.3 TWh in 2015, according to data from grid operator Red Electrica, aided by a slump in hydro output in the country.

--Gianluca Baratti, newsdesk@platts.com
--Edited by Alisdair Bowles, alisdair.bowles@platts.com