Germany Has Agreed to Phase Out Coal by 2038. What Happens Next?

A German commission last month said the country, one of Europe’s lingering bastions of coal generation, should phase out the fuel source by 2038. 

"This is an historic accomplishment," Ronald Pofalla, chairman of the 28-member government commission, said at a news conference after the negotiations concluded. "It was anything but a sure thing. But we did it."

But the work isn't done yet. According to Gregor Kessler of Greenpeace Germany, there’s still a lot to do.

"The first thing to bear in mind is that the commission’s report is still only a recommendation at this stage. However, it’s one that was specifically commissioned by the government, with a near-unanimous vote," Kessler said. “It would be irritating if it is not put into a legislative framework,” he added.

That seems unlikely, though. The landmark deal, achieved only after fraught discussions over the target date of completion, looked to keep mining interests happy by injecting the equivalent of €40 billion ($46 billion) over 20 years into coal-dependent regions.

It is proposed that this financial aid should be enshrined in a special coal industry restructuring law, so beneficiaries know for sure they can count on the support in coming years.

Meanwhile, said Kessler, climate-related parts of the proposal are due to go into a climate act that the government has promised for later this year. The wide-ranging act is due to cover not only energy but also transport, agriculture, industry and housing.

It will set out how these sectors need to be restructured to meet a 2030 target of 55 percent lower carbon emissions than in 1990. The aim is to have a first draft of the law before the summer break, Kessler said, although there are fears it could be delayed until autumn.

For the energy sector, the big issue will be how to bring about the coal commission’s recommendation of removing 7.7 gigawatts of hard coal and 5 gigawatts of lignite generation capacity from the grid by 2022.

“Merkel’s government has to identify which plants will be switched off to meet these reductions and has to find a financial agreement with the utilities,” Kessler said.

Coal phaseout still "not enough"

Another short-term issue for the government is how to resolve problems linked to Hambach Forest, an ancient woodland habitat that is due to be cleared by landowner RWE to make way for extensions to Europe’s largest open-pit lignite mine.

The forest has long been a flashpoint for environmental protests and was singled out by the coal commission, which was set up in June 2018, as being in need of protection. With all this, it is clear that the coal commission’s recommendations will take a while to implement.

The European policy newswire Euractiv cited Federal Minister for Economic Affairs and Energy Peter Altmaier as saying it could take at least a few months to address the legal questions raised by the phaseout, although the budget for the support program was already in place.

Environmental interests are keen to see the proceedings move forward as quickly as possible. Jennifer Morgan, Greenpeace International's executive director, said: “This coal phaseout timeline still overshoots what climate science and people everywhere need.”

In a press release published in association with the Friends of the Earth Germany and the nature conservation body Deutscher Naturschutzring, Greenpeace said the commission’s report was “not enough for climate protection.”

The associations both “firmly assume the end of coal will come before 2035,” it said.

Replacing baseload capacity

The political will to achieve this may exist. Germany has already conceded it will miss its 2020 emissions target, which the Financial Times said was “a severe embarrassment for a country that once prided itself on its green leadership.”

German lignite and hard coal generation capacity has fallen from 48.9 gigawatts in 2008 to 45.4 gigawatts last year, based on figures from Clean Energy Wire. However, the two fossil fuels still accounted for more than 35 percent of all generation in 2018, the figures show.

That’s almost exactly the same proportion as renewables, with natural gas and nuclear making up most of the remainder.

Since Germany is phasing out nuclear, too, the country will effectively have to replace 47 percent of its baseload capacity with new forms of generation in the coming years. It will be interesting to see how the world’s fourth-largest economy rises to the challenge.