German government passes coal exit law

15 July 2020

Following an agreement in January resulting from months of talks with coal plant operators and the political leaders of the affected states, the German government has passed legislation to end coal-fired power generation by 2038 at the latest and agreed on a shutdown schedule for individual lignite power plants. For hard coal, the ‘coal exit law’ foresees auctions for plant operators to take capacity off the grid according to the government’s timetable.

The German parliament has adopted the coal exit law 18 months after a multi-stakeholder coal exit commission recommended in 2019 an end to coal-fired power generation in the country by 2038.

The law sets out the roadmap for shutting down the country’s remaining coal power capacity, with separate routes for lignite and hard coal. A lignite phase-out has greater effect on mining regions and workers – Germany’s last hard coal mine closed in 2018. It also settles compensation claims by coal plant operators and paves the way for economic support programmes in coal regions worth 40 billion euros.

The coal exit law spells out in detail the step-by-step reduction and end of electricity production using coal in Germany.  The targets for reduction are 15 GW hard coal and 15 GW lignite capacity by the end of 2022 (from 22.8 GW hard coal and 21.1GW lignite in 2019). Scheduled reviews in 2026, 2029 and 2032 will decide whether the phase-out can be completed by 2035.



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