Germany hammers out its coal exit plan

Chancellor Angela Merkel’s so-called coal commission, officially the Commission on Growth, Structural Change and Employment, ended last year in deadlock as to how to end Germany’s long dependence on the dirtiest of all fossil fuels, lignite coal. L. Michael Buchsbaum reports.

The German coal company RWE mines lignite. The phase-out of coal will change a lot, especially for the former coal workers.

Germany’s phase-out of coal is imminent, but yet there is no plan drawn up for the future of former coal workers (Public Domain)

The commission, made up of representatives from industry, trade unions, science and environmental groups, is tasked with developing a plan for Europe’s largest economy to transition away the brown coal industry which employs over 60,000 and supplies almost 30% of Germany’s overall electricity.

While not officially in the title of the Commission, they are also tasked with creating a so-called “Just Transition” for the affected regions and workers. Given the economic devastation throughout the former East Germany following the fall of Berlin Wall, the pain stemming from the area’s “Un-Just Transition” continues to linger, especially in Lusatia. Home to almost 11,000 miners and power workers who will be directly affected by the coal exit, the politicians representing them also face regional elections later this year.

But after a private meeting between Merkel, the leaders of the Commission and the four prime ministers of the affected coal regions, the promise of significant long-term substantial financial support seems to have broken the deadlock. Now with only a few weeks to come up with a decision by its already extended deadline, the commission is expected to meet again on January 25th. And in order to ensure it’s plan is hammered out, it’ll continue its talks at the Chancellery on January 31st and complete its work by the beginning of February.

No matter the outcome, Merkel and the Commission face a tricky balancing act: how to stop the mining and burning of lignite without whipping up more voter anxiety over job losses or further delaying a decision and risk fueling ever-widening clashes with environmentalists around the Hambach Forest. The sustained on-going protests have been growing in size, last year reaching at times over 50,000 demonstrators. The police presence there has also mushroomed, swelling to over 7,000 officers to keep protestors at bay. The largest force ever assembled in North Rheine-Westphalia, the strain and expenses for all sides is starting to wear thin as public support for the Energiewende continues to rise steadily.

Now with Merkel clearly in the twilight of her long reign as Chancellor, what’s also at stake is both Germany’s reputation as a climate leader and her legacy as a climate champion. As the largest economy in Europe and its largest coal burner, she is also quite aware that the whole world is watching how Germany navigates this challenge.

Announced aid plan lacks details, comes with a high price

Following the private summit, Saxony-Anhalt’s Prime Minister Reiner Haseloff (CDU) announced that new long-term support assurances made by federal finance minister Olaf Scholz for the affected regions had potentially won him over. According to AFP, the prime ministers of the federal states of Brandenburg, Saxony-Anhalt, Saxony and North Rhine-Westphalia received pledges that the government will give way more than the so-far budgeted 1.5 billion euros by 2021. More in line with 1.0 to 1.5 billion euros per annum over a period of 15 to 20 years, according to a letter obtained by Bloomberg, the Prime Ministers are demanding “aid worth €60bn ($69bn) on top of current public grants to cushion the coal exit.” This will be used to foster structural change, including new research institutions, new jobs, new industries and the expansion of train connections.

North-Rhine Westphalia, Germany’s biggest state in terms of population, and one of it’s strongest economies, also will be seeking “more than €10bn” to finance the recreation of its economy once coal plants owned by Uniper SE, RWE AG and STEAG are shuttered, the state’s Economy Minister Andreas Pinkwart said on January 11 in Dusseldorf. RWE alone employs about 8,000 in the state’s mining and lignite industries.

“The regions affected by the planned coal exit, such as Lusatia, can count on long-term financial assistance from the federal government, said Saxony-Anhalt’s Prime Minister Reiner Haseloff.

“If we want ambitious climate protection, it will cost money, that’s a truth, it’s on the table,” said Brandenburg’s Prime Minister Dietmar Woidke (SPD). But the money “must be used in such a way that structures are created that are sustainable, which then help to re-develop the region and contribute to its tax revenue”.

Rumored coal phase out being divided into short and long-term parts

One major question remaining is how much power plant capacity should be shut down immediately, by 2022, and by 2030. While representatives of the environmental groups on the Commission are demanding the decommissioning of more than ten gigawatts of power, or about ten to fifteen large power plants, how, when and where to do so is undetermined.

The general thinking is that the power plant and mine closures will be heaviest and more immediate in the west and move slowly in the east.

The reasoning is that with upcoming elections in Saxony and Brandenburg’s regional parliaments combined with the overall more fragile economy in these former East German states, Commissioners may slow the planned speed of the coal exit there. They fear a swifter exit will only help the far right AfD party already on the rise, take voters away from both the CDU and SPD, partially because they stand against the movement towards clean energy. Haseloff (CDU) strongly warned against the consequence of structural change that is not financially cushioned. “This concerns the stability of our society, to the confidence in the ability to act of the state,” he said. “I do not want yellow vests like in France.”

However, Greenpeace Managing Director Martin Kaiser, a member of the coal commission, said that while it’s “important that the federal government supports the countries in modernizing our energy supply…the exit from lignite will only be accepted socially if it is implemented quickly. That is feasible within the next twelve years.”

Whatever the outcome of the Coal Commissions report, their suggestions do not carry any legal weight. It’s quite likely this fight will go on for months as it remains a political football for all parties.



L. Michael Buchsbaum is an energy and mining journalist and industrial photographer based in Germany. Since the mid-1990s, he has covered the social, environmental, economic and political impacts of the transition from fossil fuels towards renewables for dozens of industry magazines, journals, institutions and corporate clients. Born in the U.S., he emigrated to Germany and Europe to better document the Energiewende. He is also the host of The Global Energy Transition Podcast.

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