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Germany’s decision on coal brings a clash of wills

The conflict at the heart of Germany’s energy policy is coming to a head. Can Germany claim to be an environmental leader while still burning more coal than any other developed country apart from the US?

The issue is easier to describe than to resolve. Germany has led the EU in adopting “green” policies, including the promotion and subsidy of renewables. Energy consumers, including industry, have tolerated ever-rising energy costs. The process of closing Germany’s nuclear power stations by 2022 has begun. These policies enjoy support across the political spectrum — the Green party won just 7.3 per cent of the vote in the last federal election but green ideas now permeate the thinking of all parties. The coalition between the Christian Democrats and the Social Democrats is committed to reduce emissions by 40 per cent by 2020, 70 per cent by 2040 and 80 to 95 per cent by 2050. The German approach is being exported to Brussels with a drive under the European Commission to shape an EU energy policy along the same lines.

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But the country is not as pure and green as the rhetoric suggests. Emissions have risen over the past three years. Renewables have also grown, but 44 per cent of electricity still comes from coal, in particular carbon-intensive lignite or brown coal; coal-fired power plants account for a third of all emissions. The decision to close the nuclear sector after the Fukushima accident in Japan opened the door to a rise in coal consumption. Be­­tween 2011 and 2015, there will be more than 10GW of new coal-fired capacity. Nor has Germany supported the key steps that could cut emissions, such as the establishment of an effective carbon price.

Finally, however, the problem is being addressed. The government is applying US-style regulatory tactics to reduce emissions from coal-powered plants by setting ever higher standards. Under the plan announced by Sigmar Gabriel, the economics and energy minister, the rules will eliminate some 22m tonnes of carbon emissions and allow the country to meet its targets for 2020.

The question is whether the plan will go through or if Mr Gabriel, whose SPD depends on trade union support, will back down. The opposition is led by the utilities — which are finding it ever harder to justify continued investment in the sector — with strong support from workers particularly in regions such as North Rhine-Westphalia and Saxony, where coal-fired plants are concentrated. Three weeks ago, 13,500 people marched through Berlin in defence of brown coal, claiming 100,000 jobs were at risk — a figure Mr Gabriel denies. The opposition has some support in Chancellor Angela Merkel’s CDU party, not least from those who emphasise the cost of the energy transition — €134bn on some recent estimates. As yet no serious politician has been bold enough to challenge the core green agenda.

The argument highlights the environmental agenda as one of the key faultlines of European politics, one that cuts across traditional dividing lines. In some countries, such as France and the UK, the main issue is shale gas development; in others it is nuclear power. Climate change is the backdrop but the issues at stake are also about the immediate local environment.

In political terms, the decision on what happens to coal is a crucial test of will between two of the key forces in German society — the green movement on one side and industry and the unions on the other. The momentum that has been with the greens is being tested. The outcome matters beyond Germany. If the measures against coal go ahead there is every chance something similar will be applied across the EU. If the trade unions and the utilities win we may be seeing the turning point — the moment at which the green agenda reaches the limits of the possible in terms of the sacrifices electorates are prepared to make.

source: http://www.ft.com