16 Apr 2015 | Sören Amelang

Researchers rebuff claim of major job losses from coal levy

The researchers that prepared the German government's proposal for a levy on old coal-fired plants have rejected union claims the plan would cause massive job losses in the lignite industry and beyond. The Institute for Applied Ecology and think tank Prognos explained one of the central premises for the design of the levy was to avoid the closure of power plants and insisted it will achieve that aim.

Coal union IG BCE has warned that the levy, which is aimed at bringing Germany back on track to meet its climate target of reducing CO2-emissions by 40 percent by 2020 compared to 1990 levels, puts 100,000 jobs at risk and the “social blackout of whole regions” may follow.  

The “national climate contribution”, outlined in a paper by the Ministry of Economic Affairs and Energy, plans to cut 22 million tonnes of COemissions from the energy sector by demanding additional CO2 levies from older power plants. The levy has also met strong resistance from affected utilities.

Frank Peter from think tank Prognos, which was also involved in the design of the proposal, said model calculations show lignite plants can still be operated economically despite the levy. Especially existing networks of mines and connected power plants had many possibilities to optimise the operation. “We are convinced that we don’t need to fear abrupt structural changes in those areas”, argued Peter.

The Federal German association of all lignite producing companies (DEBRIV) argues the levy might cost around 40,000 jobs in the lignite regions alone because it posed an existential threat to around half of the country’s lignite plants. Based on calculations by economic think tank HWWI, it says more than 11,000 employees at mines and power stations will be directly affected and another 28,000 people would lose their jobs in the mining regions in the medium term because of lost income, according to DEBRIV.  

Felix Matthes, head of the Institute for Applied Ecology, dismissed these numbers, saying they were based on the false premise that half of all lignite plants will be closed. He also criticised the calculations for indirect job losses were unrealistic because they rested on the assumption that not a single affected person could find alternative employment and that all suppliers would go bankrupt instead of finding alternative markets.

Both experts also dismissed a study by investment bank Lazard put forward by trade unions, which said the closure of one plant in a group of interconnected mines and plants will have a “domino effect”, eventually forcing the closure of all plants because of ever rising operating costs.  Peter said various model calculations under many different assumptions had shown a “domino effect” would be highly unlikely.  

The heated debate over the future of coal will be taken to the streets next weekend, as supporters and opponents of lignite mining both call for mass protests on Saturday, 25 April. Coal union IG BCE will stage a demonstration in Berlin. Friends of the Earth Germany (BUND) and other environmental groups are calling for a human chain at the open-cast mine Garzweiler in the west of the country to protest against “climate killer coal” and demand an “overdue exit”.

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