17 Aug 2023, 14:30
Julian Wettengel

German lignite mining regions have used only small part of €40bln support so far

Clean Energy Wire

Germany’s lignite mining regions have only used a fragment of earmarked state support to compensate for the ongoing coal phase-out, as authorities first had to work out guidelines for the allocation of funds, said a government report. From the start in August 2020 until the end of 2022, 659 million euros of the total budget of 41.09 billion euros were used, said the Leibniz-Institute for Economic Research in Halle (IWH) and the Rhineland-Westphalia Institute for Economic Research (RWI), who wrote the report for the economy ministry. “However, this is not surprising given the short implementation time of two years so far,” said the ministry in a press release. Federal projects in the mining regions worth more than 20 billion euros have already been decided, it added.

The report gives the first overview of Germany's coal phase-out support programme, and is meant to evaluate whether the financial support is invested in a targeted manner and what effects it has. However, the institutes say that the time period evaluated so far is too short for reliable statements about the effects of the measures, especially since the pandemic and the energy crisis have strongly distorted recent economic development. The funds have so far been used for education projects, construction of roads and railway tracks, and research and development.

Germany has decided to phase out coal power by 2038 at the latest, which will have significant economic effects on the country’s lignite mining regions. Particularly in the eastern German Lusatian mining region, the lignite industry and the economic sectors associated with it have a relatively large share of regional value creation and employment. The government support programmes are set to compensate for this loss. For the Rhenish mining area, the government and the energy company RWE have meanwhile agreed to bring the coal phase-out forward by eight years to 2030. Economy minister Robert Habeck aims to reach a similar agreement in the eastern German coal regions as well, but faces resistance.

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