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Lignite phase-out: EU examines billions in compensation for corporations

2021-03-02T13:34:21.144Z

4.35 billion euros in tax money are to flow to RWE and Leag for the exit from lignite. That could violate EU law.



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Neurath power plant (North Rhine-Westphalia): RWE is to receive 2.6 billion euros in compensation for phasing out lignite

Photo: Federico Gambarini / dpa

The EU Commission is scrutinizing the billions in compensation for phasing out lignite in Germany.

You have initiated an in-depth investigation into the planned payments of 4.35 billion euros to the power plant operators RWE and Leag, said the competition authority.

Accordingly, it is not certain whether the funds are limited "to the necessary minimum" and lead to distortions of competition.

After a long struggle last summer, Germany paved the way for the gradual exit from coal by 2038 at the latest.

Above all, powerful lignite-fired power plants should continue to run until the end;

For the shutdown of other lignite plants by the end of 2029, the power plant operators RWE and Leag are to be compensated by the federal government with a total of 4.35 billion euros.

The RWE systems in the Rhineland account for 2.6 billion euros and the Leag systems in Lusatia account for 1.75 billion euros.

The gradual phase-out of lignite contributes to the EU's goal of a climate-neutral economy, said EU Competition Commissioner Margrethe Vestager.

In order to protect competitors, however, the Commission must ensure "that the compensation granted to plant operators for early withdrawal is limited to the minimum necessary".

According to the information available to date, this cannot be confirmed "with certainty".

According to its own information, the Commission therefore has “doubts about the compatibility of the measure with EU state aid rules”.

According to the authority, this concerns firstly the calculation of the compensation for lost profits.

The second point is the payments for follow-up costs of the open pit.

According to the Commission, compensation is also conceivable here.

Brussels, however, doubts the information provided on the basis of calculation.

This applies in particular to the "counterfactual scenario on which Leag is based".

Shortly after the compensation decision, the Freiburg Öko-Institut estimated that the compensation could be up to two billion euros too high.

In November the Commission approved the decommissioning payments for German hard coal power plants.

Potential distortions of competition through the payments were therefore "limited to the necessary minimum".

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fdi / AFP

Source: spiegel

All business articles on 2021-03-02

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