Government Adopts Amendment of Hard Coal Funding Law

Yesterday, the Federal Government adopted a draft amendment of the law regulating the phase-out of hard coal funding (Steinkohlefinanzierungsgesetz) submitted by the Federal Ministry of Economics and Technology (BMWi) under Minister Rainer Brüderle. The draft needs to be approved in the parliamentary approval process before becoming law.

In February 2007, the German Federation, the states of North Rhine-Westphalia and Saarland, the trade union IG BCE and RAG AG, which pools the German hard coal mining activities, agreed on a phase-out of subsidies for hard coal mining until 31 December 2018. The phase-out is regulated by a framework agreement on a socially responsible termination of state aid for hard coal and the Steinkohlefinanzierungsgesetz. In its current form the Steinkohlefinanzierungsgesetz contains a revision clause, pursuant to which the Bundestag (German Parliament) will review the phase-out of hard coal funding in summer 2012.

State aid for hard coal mining has to be approved by the EU Commission pursuant to Council Regulation (EC) No 1407/2002 on State Aid to the Coal Industry. As the Regulation only applies until 31 December 2010, the Commission approved a proposal for a Council Regulation on state aid to facilitate the closure of loss-making hard coal mines in the EU by 1st October 2014, in July.

The phase-out date of October 2014 caused a stir in German politics. The German EU Energy Commissioner Günther Oettinger was criticized for not attending the respective meeting. While Economics Minister Rainer Brüderle favoured the earlier phase-out date, Mrs Merkel said she wanted to abide by the 2018 phase-out date, agreed in 2007. Deleting the 2012 revision clause was one of Mr Oettinger’s recommendations to win support by other Member States for extending the deadline for state aid until 2018. Meanwhile, a great number of Member States seem to back the German position, according to the newspaper Die Welt.

Mr Brüderle welcomed the adoption of the Steinkohlefinanzierungsgesetz amendment deleting the revision clause. “It is important to me that the phase-out of hard coal funding cannot be reversed. The amendment makes the end of state aid for hard coal mining in 2018 irreversible. That is good news for German tax payers”, he said.

Source: Federal Ministry of Economics and Technology, Welt Online

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