EU commissioner backs eastern German coal region’s ambition to become European phase-out model

With a visit by EU commissioner Thierry Breton, the eastern German coal phase-out region Lusatia has launched its bid to become Europe’s first so-called Net Zero Valley (NZV) that hosts a fully climate-neutral local industry. “The EU Commission is ready to support this proposal,” Breton said at the event held at the Schwarze Pumpe coal plant on the border of the two eastern German states Brandenburg and Saxony. The EU’s internal market commissioner pointed out that Lusatia is the first region in Europe that could benefit from the novel NZV programme, which aims to bundle infrastructure development and funding to transform industrial regions to become net-zero and attract investment in future technologies.

“I’m confident that this is feasible and can be done soon,” Breton told journalists at the event. He stressed that Lusatia could serve as a prime example for an industrial transformation that “affects the entire continent,” not least because the region so far “has been 100 percent dependent on lignite” for its prosperity.

Breton said EU funding for the scheme, which is part of the bloc’s Net Zero Industry Act (NZIA), is in place and could help the coal mining region “do what needs to be done.” In particular, the NZV would mean “more subsidies for projects, more investment, easier licensing, infrastructure expansion, the creation of local training centres and more high-quality jobs.” Pointing at major investments in semiconductor manufacturing in Saxony’s capital Dresden and other future technology projects in the wider Lusatia region, the EU commissioner said creating a new foundation for an industry that fully runs on clean energy and manages its greenhouse gas emissions is within reach. “We need to deregulate and cut red tape” to implement the vision of a climate neutral industry after coal mining in Germany ends in 2038 at the very latest, he said.

A communal alliance of mayors in the region in March submitted its application to become the EU’s first NZV model region. In the context of its national coal phase-out law, the German government already earmarked more than 40 billions of euros in funding for managing the transition away from coal. The funds that are paid out over many years are supposed to serve an anchor for private investments by providing modern infrastructure, tax incentives, training programmes and other instruments to ensure the exit from the fossil fuel does not hurt the local economy. The rural region located between Berlin and Dresden also suffers from a shortage of skilled workers to fill positions in new industries and renewable power production that could become a greater problem for its economic prospects than the loss of its remaining coal industry jobs, researchers of the local Technical University of Cottbus-Senftenberg found earlier this year.

Breton’s visit to the eastern coal region ahead of the EU elections puts a spotlight on Germany’s economic slump linked to the energy crisis while pushing ahead with its energy transition. Robert Habeck in February commended the region’s representatives for making great efforts to become the first NZV, arguing that Lusatia “is shaping transformation in a very concrete way with its own ideas and projects” as a region “that is hit particularly hard by structural change.”