Energy giant warns of ‘significant’ job losses over Germany’s coal phase out

There will be "significant" job losses as Germany phases out coal use by 2038 as part of efforts to combat climate change, energy giant RWE's CEO Rolf Martin warned on Monday.

Energy giant warns of 'significant' job losses over Germany's coal phase out
A stop sign outside a coal power station in Voerde, North Rhine-Westphalia. Photo: DPA

“We can't exactly say yet how many employees will be affected,” Martin told the Rheinische Post newspaper.

“But I expect a significant reduction as soon as 2023, which goes far beyond current planning and what can be done through normal fluctuations.”

SEE ALSO: Germany should phase out coal  mining by 2038: Commission 

A government-appointed coal commission on Saturday set a 2038 deadline for Germany to shutter coal mines and electricity plants powered by black or brown coal.

It also recommended some €40 billion euros be set aside to help coal-reliant regions with the transition, including through retraining younger workers and early retirement schemes for others.

Energy companies can also expect billions in compensation.

Coal, the dirtiest of all fossil fuels, last year accounted for more than 30 percent of Germany's energy mix.

RWE, the biggest operator of coal-fired plants in Germany, has for years nbeen warning of the negative impact the exit from coal would have on jobs and energy security in Germany.

Some 20,000 people are directly employed in the coal industry in Europe's top economy.

It is now up to the German government to implement the commission's recommendations.

A meeting between Chancellor Angela Merkel, Finance Minister Olaf Scholz and regional leaders to discuss the proposals is scheduled to take place on Thursday.

Germany's reliance on dirty coal is in part down to Merkel's decision in the wake of the 2011 Fukushima disaster to ditch nuclear power by 2022.

But the use of the polluting fuel has complicated Germany's efforts to stick to targets for limiting greenhouse gas emissions, undermining Merkel's role as a leading advocate of the global Paris Climate Agreement.

Under the commission's plans, power plants in Germany using lignite or brown coal, which is even more polluting than black coal, would be closed by 2022.

Other plants will follow until 2030, when only 17 gigawatts of Germany's electricity will be supplied by coal, compared to today's 45 gigawatts.

The last plant will close in 2038 at the latest, the commission said, but it did not rule out moving this date forward to 2035 if conditions permit.

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German government announces fresh relief package for high energy costs

With Russia's invasion in Ukraine exacerbating high energy and petrol prices, Germany is set to introduce a second relief package to limit the impact on consumers.

German government announces fresh relief package for high energy costs

The additional package of measures was announced by Economy and Climate Protection Minister Robert Habeck (Greens) on Sunday.

Speaking to DPA, Habeck said the wave of price increases throughout the energy sector were becoming increasingly difficult for households to bear.

“Extremely high heating costs, extremely high electricity prices, and extremely high fuel prices are putting a strain on households, and the lower the income, the more so,” he said. “The German government will therefore launch another relief package.”

The costs of heating and electricity have hit record highs in the past few months due to post-pandemic supply issues. 

This dramatic rise in prices has already prompted the government to introduce a range of measures to ease the burden on households, including abolishing the Renewable Energy Act (EEG) levy earlier than planned, offering grants to low-income households and increasing the commuter allowance. 

READ ALSO: EXPLAINED: What Germany’s relief package against rising prices means for you

But since Russia invaded neighbouring Ukraine on February 24th, the attack has been driving up energy prices further, Habeck explained.

He added that fears of supply shortages and speculation on the market were currently making the situation worse. 

How will the package work?

When defining the new relief measures, the Economics Ministry will use three criteria, Habeck revealed. 

Firstly, the measures must span all areas of the energy market, including heating costs, electricity and mobility. 

Heating is the area where households are under the most pressure. The ministry estimates that the gas bill for an average family in an unrenovated one-family house will rise by about €2,000 this year. 

Secondly, the package should include measures to help save energy, such as reducing car emissions or replacing gas heating systems.

Thirdly, market-based incentives should be used to ensure that people who use less energy also have lower costs. 

“The government will now put together the entire package quickly and constructively in a working process,” said Habeck.

Fuel subsidy

The three-point plan outlined by the Green Party politician are not the only relief proposals being considered by the government.

According to reports in German daily Bild, Finance Minister Christian Lindner (FPD) is allegedly considering introducing a state fuel subsidy for car drivers.

The amount of the subsidy – which hasn’t yet been defined – would be deducted from a driver’s bill when paying at the petrol station. 

The operator of the petrol station would then have to submit the receipts to the tax authorities later in order to claim the money back. 

Since the start of the war in Ukraine, fuel prices have risen dramatically in Germany: diesel has gone up by around 66 cents per litre, while a litre of E10 has gone up by around 45 cents.

READ ALSO: EXPLAINED: The everyday products getting more expensive in Germany

As well as support for consumers, the government is currently working on a credit assistance programme to assist German companies that have been hit hard by the EU sanctions against Russia.

As reported by Bild on Saturday, bridging aid is also being discussed for companies that can no longer manage the sharp rise in raw material prices.

In addition, an extension of the shorter working hours (Kurzarbeit) scheme beyond June 30th is allegedly being examined, as well as a further increase in the commuter allowance.