Germany reaches agreement to phase out coal by 2038

Clay Curtis
January 18, 2020

The government will draft a law this month for exiting from coal and it expects to have the legislation in place by mid-2020. The govt has set a goal of producing 65% of Germany's electrical energy from renewable resources by means of 2030.

Climate activists in Germany are calling on power plant operator Uniper to abandon plans to add a new coal-fired power station to the German grid in July - a move that comes despite a political agreement finalised this week to phase out all coal and lignite generation by 2038.

But the group complained that was "well below" the 3.5 billion euros (Dh14.31bn) of losses it expects.

"Germany is taking big steps on its way out of the fossil fuel age", finance minister Olaf Scholz told reporters in Berlin.

Shares in the group were 2% higher at 1508 GMT, the second-biggest gainers among German blue-chips, having earlier touched their highest since September 25, 2014 as traders welcomed the clarity after months of wrangling.

Thursday's deal lays out for the first time in detail which brown coal plants will be shut down when, beginning with one operated by RWE near the massive Garzweiler open-pit mine in western Germany.

Late last year, the government agreed not to force hard coal power plants to close over the next seven years.

Energy-intensive companies which compete internationally will be eligible for annual subsidies from 2023 to compensate for higher electricity costs caused by the coal exit, Seibert added, without giving details. Lignite, known as "brown coal", is the most polluting type of the fossil fuel. Among the most contentious projects is a new $2 billion coal mine in the country's northeast.

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But environmentalist group BUND complained that the government's scheme pushes more closures back beyond 2030, keeping some plants running longer than previously thought.

An online petition launched by the young climate activists calls on the German government to introduce a speed limit of 120 kilometers per hour on the country's highways; end the "flood of plastic" by moving to reusable packaging; and shutting down coal-fired power plants without delay.

"It's not just about future generations, but also about our generation and our lives", says Neubauer.

Mines and utility companies that are affected will also be compensated.

Germany announced on Thursday that it would spend $44.5 billion to quit coal - but not for another 18 years, by 2038.

The settlement reached after late-night deliberations between federal ministers and representatives of 4 coal-mining states gets rid of a key hurdle in Germany's plan to curb greenhouse gasoline emissions over the approaching many years. The country is in the process of exiting atomic power, with the last nuclear reactor set to go offline at the end of 2022.

Shares in RWE, Germany's largest operator of coal-fired power plants, rose as much as 3% to 30.3 euros on the news, their highest level since September 25, 2014.

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