Coal phase-out policies could slow population decline in Germany's mining regions – analysis

Economic support policies which accompany the planned phase-out of coal-fired power generation in Germany could help slow projected population declines in affected regions, according to an analysis by the Federal Institute for Research on Building, Urban Affairs and Spatial Development (BBSR).

Investments in the structural economic transformation of former mining regions will be a key factor in determining how fast the regions shrink or whether some could remain stable by the time coal mining is set to end in 2038, the report stressed. The BBSR examined the country’s Rhenish mining region in western Germany as well as the so-called Central German and Lusatian mining regions in eastern Germany and how structural measures agreed in the context of the phase-out will impact population development. Such measures include the expansion of key infrastructure, targeted business attraction strategies and investment in research, education, and digitalisation. 

It found that populations in the more rural areas of the Central German and Lusatian lignite mining regions are set to shrink significantly by 2038. In otherwise economically weak Lusatia, for example, the population decline expected in the wake of Germany’s coal exit is more pronounced overall than in other mining regions. In the city of Cottbus and the Dahme-Spreewald district in the state of Brandenburg, large investments could lead to growth and new jobs, but more rural districts are forecast to continue losing residents even with support measures. 

By contrast, the Rhenish mining region shows only a slight population decline, the extent of which also depends on the success of the structural transformation, the BBSR noted. “If new jobs, research institutions, and modern infrastructure can be established, the decline will be significantly less pronounced.”

The research showed that the structural transformation of the lignite mining regions is not only an economic but also a demographic challenge, said BBSR expert Gustav Lebhart. "Where investments take effect early, regions can be stabilised."

Germany, which used to be the largest lignite producer in the world, plans to complete its coal exit by 2038. While the number of jobs related to coal mining and coal-fired electricity production has declined steadily in recent decades, the industry continues to be of major significance for local economies, especially in the formerly communist eastern parts of the country. Germany has made a ‘just transition’ away from the fossil fuel a key element of its phase-out in a bid to ensure that the coal industry’s decline does not lead to social hardships and political extremism in affected regions.