EC probes German state aid for early coal phase-out

The European Commission announced on Thursday that it is expanding an investigation into German plans to compensate electricity producers with several billion euros for the closure of coal-fired power plants, reported dpa.

Previously, the commission had launched a probe into a 2021 arrangement to compensate power producers RWE and LAEG with €2.6 billion and €1.75 billion respectively for phasing out coal-fired production sites to reduce climate-damaging emissions.

Last December, Germany revised its coal phase-out, anticipating the closure of three lignite-fired power plants run by RWE in the Rhenish mining area from 2038 to 2030, while delaying the closure of two others from 2022 to 2024.

Germany informed Brussels that it still foresees to pay RWE €2.6 billion despite the change of dates and an different calculation of foregone profits, the commission said on Thursday.

The commission now wants to verify whether the compensation to RWE is proportionate and justified under the revised coal phase-out, the press release said.

State aid in the European Union is strictly regulated and in many cases has to be approved by the commission.

Production and the use of energy account currently for more than 75% of the bloc's greenhouse gas emission, according to the commission.

Making the sector more sustainable is seen as a major contribution to reaching the EU's goal of becoming climate neutrality by 2025.