The recommendations of the Coal Commission are an important milestone in the German energy policy debate: Germany has now resolved to phase out both nuclear energy and coal, and is fully committed to developing renewable energy.
For decades, Germany's economy was reliant on energy from lignite and hard coal; in the future, renewables will serve as a basis for economic prosperity.
The Commission's proposals, if fully implemented, will lead to CO₂ savings of some one billion tonnes by 2038.
In the absence of implementation, CO₂ emissions from coal-fired power plants will only decline at a slow rate. However, the Coal Compromise is not sufficient for Germany to meet its 2030 carbon emissions target. Considerable additional measures are required, especially in the industrial, building, and transport sectors.
The Coal Compromise will ensure a just transition for coal regions and employees.
The compromise guarantees that no worker will be left high and dry and that coal mining regions will have sufficient time and resources to adapt economically. To this end, the compromise foresees 2 billion euros in federal spending per year - which in parts can also be understood as compensation for structural policy failures since German reunification especially in Eastern Germany.
While the Coal Compromise envisions full phase-out occurring in 2038, earlier achievement of this goal is likely.
Periodic reviews in 2023, 2026, 2029, and 2032 will offer policymakers an opportunity to react to a worsening climate crisis with additional measures. Furthermore, the Commission’s compromise creates a foundation for a socially equitable acceleration of the phase-out.
Coal has been a cornerstone of economic growth and prosperity since the dawn of the industrial era. However, climate change, air pollution, and increasing health and environmental concerns require us to end the age of coal as soon as possible. To be sure, countries with heavily coal-dependent energy systems such as China and Germany will face serious socio-economic challenges in the effort to reduce and eventually phase out coal-fired energy production.
To prevent economic disruption and associated social hardship for workers, coal-dependent countries would be well-advised to initiate a political process on how to transition from coal to clean energy. In the summer of 2018, Germany launched such a process by establishing a "Commission on Growth, Structural Change and Employment" - otherwise known as the "Coal Commission". Following in-depth deliberations between key stakeholders, in January of 2019 the Commission presented a comprehensive roadmap for the phase out of coal-fired power generation in Germany by 2038. The federal government has declared its intention to implement the Commission's recommendations.
In this report, we analyse the Commission's recommendations with regard to their anticipated impact on the German electricity sector, carbon emissions, and economic development in coal-mining regions.
The cooperation of Agora Energiewende and Aurora Energy Research is kindly supported by the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) on behalf of the German government.
Senior Associate (until February 2022)