Western Europe's Long Retreat from Coal and Implications for Energy Trade

Ronald P. Steenblik and Mark Mateo

World Trade Review, 2020, vol. 19, issue S1, s98-s119

Abstract: Western Europe's industrialization was powered largely by coal. Within 15 years after the end of the Second World War, however, governments were subsidizing coal and protecting producers from foreign competition while allowing their industries to contract in a way that avoided large-scale unemployment of miners. The oil-price shocks of 1973–1974 and 1979–1980 gave temporary reprieve to hard-coal production until international oil prices slumped in 1986. This event, combined with ever more stringent environmental regulations and, later, caps on carbon-dioxide emissions, led to the disappearance of subsidized coal mining in one country after another. As of the end of 2019, hard coal was still being mined – in small amounts – in only three Western European countries: Norway, Spain, and the United Kingdom. This paper describes the history of the industry from 1945 through to the present, and the consequences of subsidy policy for trade in hard coal and its substitutes. A common observation is that a reduction in subsidized coal production by a country has not necessarily translated into increased imports of coal on a one-for-one basis.

Date: 2020
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