Germany to spend €40bn to melt blow from coal closures – Monetary Instances

Berlin has agreed to spend €40bn to cushion the economic blow from the closure of coal mines and coal-fired power plants in eastern Germany and the Rhineland over the next two decades.

The compensation package is part of a historic effort to wean Germany off a fuel that has powered Europe’s largest economy for centuries but that also counts among the dirtiest fuels around. Power plants that run on coal and lignite produced 40 per cent of electricity in Germany last year — and are one of the main reasons why the country has struggled to meet its greenhouse gas emission reduction targets.

Under a plan that was tabled by a government-appointed commission in January, all coal-fired plants will be closed by 2038. 

The phase-out proposal won the backing of both industry and the environmental movement, but it also sparked anxiety in coal-dependent regions like the Lausitz, east of Berlin, one of the economically weakest areas in all of Germany. Calming those fears is a priority for political leaders in Berlin, who face European Parliament elections on Sunday and regional elections in three east German states this year. 

Peter Altmaier, the German economy minister and a close ally of Chancellor Angela Merkel, hailed Wednesday’s announcement as a breakthrough. “This is the first time in postwar history that we are responding to structural change before the change actually happens,” he said. “We are creating new jobs before the old jobs have disappeared.” 

According to the 44-page outline of the plan that was approved by cabinet on Wednesday, the €40bn will fund a long list of projects, including the creation of research and development centres in affected regions, the expansion of motorway and railway links, and the construction of landmark sites such as a sports arena for international competitions in Leipzig. 

The government also promised to improve internet and telephone coverage in the affected regions and to shift 5,000 government jobs into the former coal-mining areas. 

Brandenburg, the federal state that is home to the Lausitz, welcomed the package, as did other regions affected by the coal phase-out. Dietmar Woidke, the prime minister of Brandenburg, hailed the planned government measures as a “strong signal”. 

But there was criticism from environmental activists, who pointed out that the compensation package was being approved ahead of any formal decision by the government and parliament to end coal use — let alone a detailed timetable setting out which mines and power plants would close when. 

“At the heart of the coal compromise is a simple deal: money only in exchange for climate protection,” said Martin Kaiser, the managing director of Greenpeace in Germany. “If the government is now promising billions of euros in support for the coal states without at the same time nailing down measures to protect the climate, then it is undermining this compromise . . . Structural aid must be linked to a clear agreement on when coal power stations will be switched off.” 

The government said it would tackle the shutdown timetable in the second half of this year. 

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