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Germany revamps coal levy

Faced with tough opposition from trade unions, coal-reliant regions, the industry and a mix of political parties, the German government scrapped a planned coal levy aimed at closing the most polluting coal-fired power plants, instead replacing it with a more expensive but less ambitious alternative.

The idea was to eliminate 22 million tons of carbon dioxide emissions from the power sector (specifically, fossil fuel-fired plants) to keep the country on track to meet its 2020 climate targets. But the government’s plan to slap a penalty fee on coal generators that exceed a certain level of emissions sparked widespread concern about job losses, and drew thousands onto the streets in protest in recent months.

The backlash forced a change, agreed to late Wednesday night, which is gentler in easing the coal industry towards plant closures. Those who supported the coal levy blame Chancellor Angela Merkel for failing to back Economic Affairs and Energy Minister Sigmar Gabriel when the levy became more contentious.

“Gabriel was for a long time committed to the original model, since it was effective and comparatively cheap, but the chancellery stabbed him in the back,” said Felix Christian Matthes, a research coordinator at the Öko-Institute think tank, which developed the model on which Gabriel based the original levy proposal. “The issue, in the end, was decided on the political level.”

The debate started last December, when Berlin announced a climate action plan to close a gap of around 70 million tons of CO2 standing in the way of the country’s aim to reduce emissions by 40 percent by 2020. The power sector was asked to cut 22 million tons, out of 349 million tons emitted in 2014.

Gabriel presented the coal levy plan in March, with the aim of encouraging the dirtiest power plants to reduce CO2. But the opposition was fierce and broad — including two of the country’s largest trade unions, IG BCE and Ver.di, Social Democrat-led state governments from North Rhine-Westphalia and Brandenburg, and Conservative governments from Saxony and Saxony-Anhalt, plus community representatives and companies.

“It had a big impact because there wasn’t a political orientation along party lines, but along topical lines, and in this case the interests of the unions and companies were quite compatible,” said Christian Hülsmeier, a spokesman for IG BCE, a mineworkers union. He added that the unions were concerned about jobs and companies about losing generating capacity.

This was something Gabriel could not ignore, he said in an interview on German television Thursday morning. “Because, as economy minister there’s one thing I cannot say: ‘I don’t care at all about jobs’,” he said.

To Matthes, however, the fear-mongering was mostly about politics. In the coal-heavy region of North Rhine-Westphalia, elections due in 2017 arguably played a central role in driving the two main political parties, SPD and CDU, to join the opposition to the levy.

source: http://www.politico.eu