Sat. Jan 28th, 2023

Today the European Commission announced (EU Commission document) they will start an investigation on the multi-billion bailout Germany is planning for lignite corporations LEAG and RWE. The Commission expressed doubts on the compatibility of the ‘compensation package’ with EU state aid rules and climate ambition, as well as on its suitability considering the current market conditions for lignite power.

We and partner NGOs had been calling on the Commission to start such investigation as the German bailout plan is highly problematic (here our letter and annex):

  • It will promote business as usual for lignite operators, and in some cases even prolong operation, while deteriorating the market value of renewable energy sources.
  • It does not consider that some of the plants would have had to close already by August 2021, unless the utilities went through expensive interventions to bring the plants in line with EU industrial pollution standards (such as Best Available Techniques for Large Combustion Plants), which haven’t been taken into account in the calculations.
  • It entails “compensations” to polluters without clarity on the calculations, whilst the negative externalities of their activities (e.g. air pollution and water impact from mining) are not even addressed; covering re-cultivation costs is also in clear breach of the ‘polluter pays’ principle. Rather than ‘polluters pay’, this would be more of a ‘polluters get paid’ twist.
  • It includes support for gas combustion – hence more fossil fuels burning.
  • It does not prohibit expropriations due to continuation of lignite mining – while people in Germany are already losing their home to coal that should never be burned.

Stakeholders will now have the chance to input into the Commission’s investigation, the German government will have a chance to reply, and the Commission should take a final decision within 18 months.

Here is our reaction:

“We welcome the Commission’s investigation on the German government’s scandalous bailout plan. The coal era is over and operators have known it for years, but they chose not to adapt. Instead of subsidising polluters with public money to compensate for their outdated business choices, the German government should claim back their air pollution, water and carbon debt, and hold polluters accountable for the damage they inflict to people and nature” – Riccardo Nigro, Campaign Coordinator for Coal Combustion and Mines, European Environmental Bureau

For more information:

  • Our media briefing on the German state aid plan
  • Our report showing how lignite companies in Germany – as well as Poland and the Czech Republic – are skipping their water bills and letting taxpayers pay not only for the water they use, but also for cleaning up the damage they inflict
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