Coal Transition in SPAIN

Spain has had a long tradition of coal mining at least since the XVIII century. However, it is also one of the jurisdictions committing to phase-out of subsidies and implementing it in recent times. This case study discusses the main features of the coal transition in Spain, the factors influencing this transition as well as the policies which both drove it and accompanied their detrimental socioeconomic effects on the workers and regions.The analysis is based on a desktop research of relevant documents, including official communications from the Ministry of Industry (MINETUR) and the European Commission as well as statements of position from the industry association (CARBUNIÓN) and labour unions (UGT and CCOO). Documents on national coal from other institutions (Foundations, NGOs) have also been consulted. Finally, an analysis of articles in the mass media has been carried out. This contains useful statements from different types of stakeholders.

A strong reduction in production and employment in the coal industry has been experienced at least in the last two decades in this country. Successive plans by the government have aimed at reducing coal production, early retirement of workers and closing mines. Caught in the middle of the mining coalition on the one hand and EU legislation and public opinion on the other, the government has had to approve drastic measures leading to phase out. On the other hand, it has tried to accompany the phase out with measures which have tried to mitigate the negative impact on the affected zones, although effectiveness in this context has been limited according to many stakeholders.

The measures adopted by the government to reduce coal production and consumption have been effective. Coal demand has gone down as a result of the combination of lower electricity demand and increasing renewable energy penetration. A drastic reduction in employment and production levels has been experienced.

Some measures have aimed at mitigating the impact in the zones, first through support for production, early retirement etc… and then with actions on the territory, i.e., through the provision of infrastructure. However, an alternative industry has not been created, i.e., a development model which absorbs the unemployed workers and avoids the economic downturn in the mining areas. The support measures have rather solved sporadically the problem of those being unemployed through income transfers, but not by relocating them in an alternative activity. Many miners are not only worried about their jobs but about the future of their children and this has not been addressed. There seems to have been an excessive emphasis on the provision of public infrastructure rather than encouraging directly the setting up of alternative industries which are both economically and socioeconomically sustainable in the long term. This is certainly a mistake to be avoided in the future. One lesson is that, once it is decided to phase out coal, governments should try to manage the negative socioeconomic and distributional effects in the most appropriate manner, e.g., both by compensating workers and creating alternative industries which provide a brighter outlook for the negatively affected regions.