More electricity was produced from brown coal last year than at any point since German unification in 1990, a study by the Working Group on Energy Balances (AGEB) showed on Tuesday.
Germany is the biggest producer of brown coal, or lignite, in the world. It is responsible for 25 percent of the country's energy production. Supporters say burning lignite produces fewer harmful emissions than burning black coal.
Yet the current boom could be counteracting all the progress in new green energy production from solar and wind plants, environmentalists say, and ruin Germany's chances of hitting emission reduction targets.
"Anyone who is serious about protecting the climate has to make sure that less electricity is produced from brown coal," said climate expert and Green politician Bärbel Höhn.
"An appropriate price needs to be put on CO2 emissions so that environmentally friendlier gas-fired power plants catch on," she added.
The boom is also hindering the development of gas power plants elsewhere in Europe, as Germany exports more and more cheaply produced coal-sourced electricity abroad.
"Germany exported more electricity than it imported on eight out of every ten days in 2013," said Berlin based electricity expert Partrick Graichen of thinktank Agora Energiewende. This is predominantly electricity from brown and black coal.
Critics say that the coal branch has been the main benefactor of Germany's 2011 decision to shut down its nuclear power plants. Electricity produced from black and brown coal was up by eight billion kilowatt hours (kwh) last year, while gas power production fell by 10 billion kwh, the study showed.
This has lead to what Graichen has called an "energy revolution paradox" - rising carbon emissions despite a higher number of solar and wind parks being built than ever before.
Meanwhile, consumers continue to pay a high price for Germany's switch to clean energy. Each four-person household is expected to pay just under €220 this year in green energy subsidies on top of their electricity bill.
High prices have led some such as Bavarian state Economics Minister Ilse Aigner (CSU) to suggest the government should pour borrowed money into the electricity market to ease the burden on consumers paying for the energy switch.
But Aigner's party leader and Bavarian Premier Horst Seehofer has rejected the suggestion, leading to a split within the Christian Social Union (CSU) ahead of their party conference on Tuesday.
Others say the solution lies in Europe. Coal will continue to boom unless stricter checks are put on carbon polluters on a European level and changes to the carbon emissions trading scheme, says Jochen Diekmann from the German Institute for Economic Research (DIW).
Yet it will be down to Germany to lead any revision of the European carbon trading scheme, which seems unlikely from the new coalition.
"[Energy Minister Sigmar Gabriel] has to stop the shocking coal boom," demanded Gerald Neubauer from Greenpeace. He said it was "endangering Germany's credibility in matters of climate protection and the switch to clean energy."