Money News

Germany's coal exit plan becomes law

FRANKFURT (Reuters) - Germany’s lower and upper houses of parliament formally approved a law on Friday on ending coal burning by 2038.

Steam rises from the cooling tower of the lignite power plant complex of German energy supplier and utility RWE, in Neurath north-west of Cologne, Germany, February 5, 2020. REUTERS/Wolfgang Rattay/Files


It implements last year’s climate protection package that the coalition government passed to set Europe’s biggest economy on a course to meet climate targets.

Germany aims to cut greenhouse emissions by 2030 by 55% across all sectors from 1990 levels and to reach a share of 65% of renewables in power generation.

The law entails over 50 billion euros ($56.17 billion) of spending on mining and generation plant operators, affected regions and employees, to lessen the impact of the transformation of energy assets.


Operators of hard coal fired power plants may compete in auctions beginning in September and run up to 2027 for closure compensation payments.

They will also be paid for switching to gas from coal, which emits less CO2.

Plants built less than 10 years ago can ask for direct payments or a transition into a network reserve in exchange for compensation.

These decisions will be made at the point of closure and are regularly monitored.

They must be in line with EU state aid regulations and will depend on fuel and carbon prices at that time.

Plants stop operating by 2033.


The industry comprises of domestic mining of brown coal, also called lignite, and its burning in plants by operators RWE and Leag.

A 4.35 billion euro package to phase out these operations by 2038 was agreed last week.


Mining state North-Rhine Westphalia needs money as as traditional heavy industries have lost sway. Coal regions in eastern Germany also have yet to fully shrug off the impact of four decades in Communist East Germany.

($1 = 0.8902 euros)

Reporting by Vera Eckert and Markus Wacket; Editing by Frances Kerry