Germany’s billions in coal phase-out aid slowly flowing to states

Berlin (dpa) – Of the 40 billion euros (46.33 billion dollars) promised to Germany’s coal-producing states to support them through the country’s transition to cleaner power, only around 80.5 million have been allocated so far, according to a government report.

Acting Economy Minister Peter Altmaier said on Wednesday that the structural overhaul, which involves phasing out coal by 2038, is going well.

The grand coalition agreed last year to the ambitious plan, which mainly affects the country’s eastern regions, as well as its industrial heartland of North Rhine Westphalia in the west.

With outgoing Chancellor Angela Merkel’s conservatives expected to go into opposition following the September elections, their Social Democrat partners are expected to pursue an even earlier phase-out under a coalition with the Greens and liberal FDP.

The three parties, which are currently negotiating to form a new government, want to “ideally” close Germany’s last coal-powered plant by 2030.

The money allocated so far will go towards seven projects put forward so far by the states, Altmaier’s report said.

Experts however have questioned whether the development aid for these regions is being sensibly spent.

Economist Joachim Ragnitz told dpa that some authorities were using the funding to build childcare centres or renovate local museums to attract tourists. In his view, this did not amount to the structural change necessary to transform these regions economies.

By 2028, the federal government aims to have created 5,000 jobs in formerly coal-dependent areas by partially or entirely relocating authorities to those parts of the country.

According to the government report, 2,140 of these positions have already been filled.

North Rhine Westphalia’s new governor said on Wednesday that his state is prepared to halt the mining of lignite, also known as brown coal, as early as 2030.

Hendrik Wuest, a member of Merkel’s Christian Democrats (CDU), said he intended “to do everything to ensure that this works.”

This would require the promotion of renewables and the creation of incentives for alternatives to ensure the electricity supply, he noted.

According to the website of Germany’s Debriv lignite association, the Rhine coalfield, which lies in North Rhine Westphalia, is the largest lignite field in Europe. The coal is used exclusively for power generation.

Wuest predicted that continuing lignite production would become “increasingly uneconomic” in view of the regulations on emissions introduced by the European Union, the German government’s own targets and the continued expansion of renewables.

Lignite is the poorest and most polluting coal quality. Germany has already shut down its last hard coal mines.