An investigation has proven that the payments are in line with the European Union’s state aid rules, the commission said in a statement.
By supporting the phase-out of lignite-fired power plants, the compensation would contribute to the decarbonisation of the economy in line with the EU’s objective of becoming carbon neutral by 2050, the commission wrote.
Germany is to phase-out electricity generated from coal by 2038. Chancellor Olaf Scholz’s current centre-left government aimed “ideally” for an even earlier end to coal use in Germany in 2030 as part of the coalition agreement.
To encourage the early close of lignite mines, Berlin plans to pay operators billions in compensation.
Next to the €2.6 billion earmarked for RWE for the closure of coal pits in the western Rhineland, energy company LEAG can hope for €1.75 billion to close its operations in the Lausitz region of eastern Germany.
The commission concluded that, although the payments to RWE amounted to state aid, the payments are necessary to enable the closure of the coal-fire power plants and are less than the current net value of lost future profits.
