German Chancellor Angela Merkel. Picture: BLOOMBERG/KRISZTIAN BOCSI
German Chancellor Angela Merkel. Picture: BLOOMBERG/KRISZTIAN BOCSI

Berlin — Chancellor Angela Merkel has reached a deal in principle with Germany’s coal-producing states for Europe’s largest economy to begin phasing out the dirty fossil fuel.

The talks that began on Wednesday evening and lasted well into the night set out a timeline for shutting down the country’s coal-fired power generation by 2038.

As part of the deal, the government reaffirmed its legal commitment to disburse the €40bn it had previously promised as compensation for regional infrastructure projects.

Berlin said it also aims to get a coal exit law approved by the first half of this year, according to a statement from the government’s media office.

The deal agreed to by four state premiers doesn’t mention compensation to power utilities, which was under separate negotiations for weeks. Mine operators and power utilities must still give their final approval.

The biggest resistance to a cleaner energy matrix had come from states in the former communist East, which relies most heavily on coal and has a lower per capita income than the western part of the country.

Merkel has faced ongoing pressure to slash carbon emission more swiftly. Climate issues are on the top of voter concerns, polls show, and most approve pulling out of coal. Germany will miss its 2020 targets under the Paris Agreement and could fall further behind schedule if it doesn’t start closing coal-fired power plants soon.

Merkel’s predicament on the coal issue in part feeds into a broader political challenge for her, with the Greens party and the far-right Alternative for Germany (AfD) party rising on both sides of the political spectrum to squeeze Germany’s traditional mainstream parties, including her Christian Democrats. The AfD has been particularly strong in the eastern mining states.

Coal plant closures are to be carried out through 2038, in line with carbon emission reductions targets.

Under the agreement announced early on Thursday, LEAG’s Jaenschwalde power plant is to be transformed into a gas-fired unit.

The federal government will also pay retraining programmes for power and lignite mine workers who are made redundant by plant closures.

The deal is part of a broader government effort this week to showcase measures to combat climate change. On Tuesday the government announced huge investments in railways to lure passengers from cars and aircraft, which have a higher carbon footprint.

Bloomberg