Coal is the largest source of electricity in Germany — but the country is trying to cut back.

Germany, one of the world's biggest consumers of coal, plans to phase out coal by 2038 and become emissions-neutral by 2050.

The country gets more than a third of its electricity from burning coal, producing large amounts of greenhouse gas emissions that contribute to climate change. More than 40 German plants run fully or partially on hard coal, according to Reuters.

In August, Germany’s federal cabinet approved a €40 billion plan to alleviate the impact abandoning coal will have on the country’s mining regions.

The initial plan would force utilities to deactivate hard coal power plants by 2026 if not enough closures happened voluntarily. Lawmakers are considering another plan to shut down dozens of coal-fired power plants to meet its sustainability goals.

The best way to reduce reliance on coal for energy is still up for debate in Germany, says Claudia Kemfert, professor of energy, economics and sustainability at the German Institute for Economic Research.

The new plan would include subsidies to encourage operators to close the coal plants on their own. But that means that shutting down coal in the country is going to cost more.

“In Germany, we are willing to pay subsidies or financial compensation,” she says, “but not to that large extent as nowadays is discussed.”

Interview Highlights

On how the phase-out plan will work

“It's still under debate. What they are right now doing at the German government is to establish some kind of climate law where they would like to focus on a coal phase-out plan. … In addition, also, they are talking about some kind of financial compensation. And if we are phasing out coal, we have to phase in more renewables. And there's a big debate right now whether we should have a steeper increase of wind or solar and how fast can we shut down coal-fired power plants. And what about the compensations for the utilities? That's still under debate right now.”

On how much the phase-out plan will cost

“It depends on what they are deciding right now. … The German government has decided to pay €40 billion by 2038 for those regions which are affected from this so-called phase-out — primarily those regions where a lot of coal jobs are located. And the other concept … is what about the climate law and how voluntary or how fixed will be the coal phase-out plan? And there is still a debate right now. It's these days where they are heavily debating also in the Parliament. And we will see what kind of solution they are favoring.”

On how Germans feel about the plan

“The population is very confident that the energy transition is right and they are supporting it. 80% of the people think that that's a good strategy, but ... how to do it is quite under debate right now. And we have still 40,000 coal jobs in those regions. And in the renewable sector, approximately 300,000 people are working right now. But there [are] ... market problems in the renewable energy sector so a lot of solar jobs have been lost and wind these days as well. So there is a big debate on how to solve it and also to maintain the renewable energy jobs and not only to phase out coal and give financial compensation for coal, but also to give financial compensation for those jobs — the future jobs of renewables. And this is a big debate right now, and it has all to do with a phase-out plan.”

On whether German coal companies are facing bankruptcy

“It's the same situation that the coal companies are struggling [with]. So it's quiet under the debate of what they are doing and at the end, whether there [is] such kind of high payment or not. But the Germans are really ... as you said, also confident that we should meet the emission reduction goals and therefore the coal phase-out plan is not under question anymore.”

On where Germany stands compared to the rest of Europe

“We have in Germany the largest amount or the largest share of coal in comparison to all other European countries. There is another country which has also quite a high share, which is Poland. But also now they're debating a strategy how to decrease the share. And in other countries … France has more nuclear power plants than Germany. But Germany is phasing out nuclear, then phasing out coal and phasing in renewables. This plan is still ongoing and … there's still a long way to go.”