Eastern German states call for clarity on EU state aid position on coal exit compensation

Coal mining states in eastern Germany have called for clarity regarding the release of 1.75 billion euros in support funds from the federal government for the transition away from the fossil fuel. After the European Commission greenlighted support payments of 2.6 billion euros to lignite mine operator RWE from western state North Rhine-Westphalia, the state premiers of eastern states Brandenburg and Saxony called on the federal government to push for a swift resolution of the pending EU decision regarding state support for the eastern coal mining regions, newspaper Tagesspiegel reported. In a letter to Social Democrat chancellor Olaf Scholz (SPD), Dietmar Woidke, SPD state premier of Brandenburg, wrote he suspected that an agreement between the federal government and eastern lignite operator LEAG on the dissemination of support funds might not be adhered to. This scenario would be “catastrophic” regarding trust in political deals, Woidke argued. Saxony’s state premier, Michael Kretschmer from the conservative Christian Democrats (CDU), said he was under the impression “that the federal government doesn’t do enough for the eastern lignite companies” LEAG and MIBRAG, adding that he expected a quick solution.
LEAG CEO Thorsten Kramer said his company needed a positive reply regarding support payments soon to have planning security during the transformation. On Monday, Kramer had said  his company is “very optimistic” to run lignite mines past the 2030 phase-out aim.

The European Commission on Monday said the payments granted to RWE would ensure a rightful compensation for the early closure of the company’s lignite operations, which the latter agreed to end by 2030 in the western coal region. The Commission argued that while the payment constitutes state support, this is necessary for RWE to shut down its lignite plants, as the net value of lost earnings from them is greater than the compensation payment. While western state North Rhine-Westphalia has agreed to phase out coal-fired power production by 2030 and the government aims to “ideally” make that the end year for coal in the whole country, the eastern states so far have insisted they see little wiggle room for ending the fossil fuel’s use before the official end date in 2038.