Problem

Coal has historically played a key role in Germany’s economic growth and energy security. In 2018, hard coal and lignite were used in 33% of the country’s primary energy production, directly employing 32,800 people and involving as many as 86,000 across the value chain.

That same year, Germany’s Coal Commission was established to drive social consensus on phasing out coal from power generation, including identifying the adverse impact on electricity prices, energy security, coal-reliant regions, and employment. Equity challenges were specifically noted, which include the potential unemployment of coal workers, an increase in electricity prices along with reduced energy security, and cultural disruption in coal-centred communities.

Responses

The German Coal Commission, which consists of stakeholders from Government, industry, labour unions, and environmental groups, was mandated to drive social consensus on phasing out coal from power generation. Despite the Government endorsement, the Commission has full independence in decision-making power in fulfilling its goals.

Six months after its formation, the Commission released a set of recommendations for guiding coal phase-out in Germany. The key recommendations include promoting new value-added industries and employment in coal mining regions by modernising existing energy infrastructure to support renewables and storage technologies, investing in transport and digital infrastructure, and relocating federal Government offices to coal regions. Additionally, the recommendations focused on the transition ensuring a socially acceptable phaseout by providing protections such as early retirement, retraining, and preventing early dismissal, along with facilitating dialogue between regional governments and affected residents. Other recommendations focused on maintaining energy affordability and compensating power plant operators for the shutdown.

Find out more: World Economic Forum