Within Germany, subsidies to the domestic coal industry are raising taxes, increasing electricity prices, constraining industry competitiveness and causing distortions to resource allocation decisions. Coal assistance policies raise the costs of German industry, particularly those which use coal and electricity. In the case of assistance to steaming coal production, subsidies are less explicit, making the direct cost of continued support to the industry less obvious. If Germany deregulated its coal industry, it would become a major coal importer, conceivably importing as much as 60 Mt a year. Such an increase in import demand would raise world coal trade volume significantly. The impact of liberalisation on world coal prices would depend on the extent and timing of liberalisation and the responsiveness of suppliers to the increased import demand. 13 refs., 5 figs., 2 tabs.