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The fossil fuel coal plays a key role in the Federal Republic's current mix of energy sources. Hard coal and lignite together account for almost a 22% of primary energy consumption (10.9 and 11.1 per cent, respectively in 2017).
Coal also is the most important energy source for power generation. Some 37% of gross electricity was generated from coal and lignite in 2017 (lignite: 22.5%, hard coal: 14.1%).
Consumption and supply
The main consumers of hard coal in Germany are the power stations and the steel industry. In 2017, power stations accounted for 78% of total consumption of hard coal, the steel industry for 20%, and other industry, home fires and small-scale consumers for roughly 2%. The German hard-coal mining industry has been undergoing a process of restructuring for some decades. Output and the number of mines and employees are constantly falling. On 31 December 2018, the extraction of hard coal will cease in Germany when the last two mines, Prosper-Haniel and Ibbenbüren, are closed. In view of this development, imports now cover more than 90% of the supply of hard coal and hard coal products on the German market (50.3 million tonnes in 2017 according to the Coal Importers Association).
Subsidies for domestic hard coal mining
Hard coal mining in Germany (3.7 million tonnes in 2017) is unable to compete internationally and is therefore subsidised. The purpose of the subsidies is to balance the difference between production costs on the one hand and revenues generated from the sale of the coal produced on the other - coal subsidies per tonne must not exceed the difference between production costs and the average prices of coal in third countries - as well as cover the costs of mine closures. State aid for hard coal mining must be approved by the EU Commission based on the EU rules governing state aid for the coal sector (PDF: 731 KB) as decided on 10 December 2010 by the Competitiveness Council.
Phasing out of subsidised hard coal mining in Germany
On 7 February 2007, the Federal Government, the Länder of North Rhine-Westphalia and Saarland as well as the German Hard Coal Corporation (RAG Corporation) and the Mining, Chemical and Energy Industrial Union (IG BCE) reached an agreement on the socially acceptable phasing out of subsidies for hard coal in Germany by the end of 2018. This process is regulated by a corresponding framework agreement concluded on 14 August 2007 between the Federal Government, the coal-mining states and the RAG Corporation, and by the Hard Coal Funding Act (only in German) which came into force in December 2007. The Act amending the Hard Coal Funding Act (only in German, PDF: 20 KB), which entered into force in July 2011, repealed the original provision for a review by the German Bundestag of the decision to phase out subsidies (review clause).
On the basis of these regulations and on subsequent funding decisions, the maximum subsidies to be provided by the Federal Government and the Land of North Rhine-Westphalia (NRW) for the period from 2014 to 2019 (in million euros) are as follows:
The funding provided by the RAG Corporation itself over this period will amount to 192 million euros.
Long-term liabilities of hard coal mining
With regard to the RAG Corporation's long-term liabilities from coal mining operations (pit water management, permanent mining-related damage, ground water purification), a separate arrangement reflecting the specific responsibility of the coal-mining states has been made. Established on 10 July 2007, the RAG Foundation guarantees the financing of the long-term liabilities by realising the assets of Evonik Industries AG (formerly RAG Beteiligungs AG). Should the Foundation's funds prove to be insufficient, financing of the long-term liabilities is guaranteed by the Länder of North Rhine-Westphalia and Saarland, based on a corresponding Legacy Agreement between these three parties. Under the agreement reached with North Rhine-Westphalia and Saarland, the Federal Government will cover a third of any guarantee to be furnished by these Länder, hereby safeguarding the financing of the long-term liabilities.
In terms of domestic energy resources that are available in sufficient quantities and can be extracted without the need for subsidies, lignite is the most important. The reserves and resources of lignite that are known to exist today are enough to last a very long time. In licensed open-pit mines, deposits total around five billion tonnes.
There are three areas in Germany that still have active lignite mines, all of them open-cast mines. These are the Rhineland, Lusatia and Central Germany. Extraction in the Helmstedt district ended in August 2016. Annual output has remained broadly stable in recent years, totalling around 171.5 million tonnes in 2017.
Germany is the world's largest producer of lignite, followed by Australia, Russia and the United States.
Around 90% of lignite is used to generate electricity and district heating in public and industrial power plants. It therefore accounted for 22.5% of electricity generation in Germany in 2017.
Due to lignite's specific properties, open-pit mines and power plants work together in order to exploit it commercially, close to where deposits are found. In this way, they are able to ensure maximum efficiency and security of supply. As a result, there is no international market for lignite. Just under ten per cent of the lignite produced is upgraded into solid or pulverised fuels (lignite briquettes, pulverised lignite and fluidised bed lignite, lignite coke), for use either commercially or in the home.
Lignite mining changes the landscape permanently and is constantly linked to damage caused to both human and animal habitats and to nature in general. As part of licensing procedures in relation to regional planning and mining legislation, an attempt is made to strike a balance between the interests of the energy industry on the one hand and social, technical and environmental concerns on the other. In so doing, the public - for example, citizens, specialist authorities, environmental groups - are also given the opportunity to both influence and play a part in the process.
Since operations began, around 177,300 hectares of land in total have been used for lignite mining, approximately 70 per cent of which has already been recultivated. Around 20 per cent of the recultivated area has been reassigned as agricultural land, approximately 30 per cent as forest and woodland areas and around 13 per cent has been made into water areas.
External sites -
External sites:Federal Office for Economic Affairs and Export Control (BAFA)