Germany Compensates LEAG €1.75 Billion for Coal Exit by 2038

Germany's economy ministry confirmed approval to compensate power company LEAG with up to €1.75 billion for exiting coal by 2038, after the European Commission's signal. €1.2 billion will cover social costs and mine repurposing, while €550 million will account for lost earnings. This move supports Germany's decarbonisation efforts.

Germany's economy ministry said it was cleared to compensate power company LEAG with up to 1.75 billion euros ($1.90 billion) for exiting coal by 2038, after the European Commission signalled its approval, part of Berlin's efforts to speed up decarbonisation. "This is an important step, especially for the people of the region," Economy Minister Robert Habeck said in a statement.

Some 1.2 billion euros of the compensation, which the Commission has approved in principle, is meant for social costs of the exit and for repurposing opencast mines in the region, the economy ministry said. Around 550 million euros are earmarked as compensation for LEAG's forgone earnings due to the 2038 exit, but the concrete figure will be calculated based on the market situation, carbon prices and the final phase-out date.

"This is an essential building block for our continued successful transformation into a green powerhouse," LEAG Chief Executive Thorsten Kramer said in a statement. ($1 = 0.9204 euros)