The European Commission has approved a €2.6bn German State aid to support the energy company RWE, which will compensate the German utility for the early phase-out of its lignite-fired power plants in the Rhenish mining area. The State Aid is deemed necessary for RWE to phase out its lignite-fired power plants, which are currently profitable, in order to achieve Germany's environmental protection objectives and to reduce its greenhouse gas (GHG) emissions by 2030.
Germany has decided to enter into agreements with the main producers of lignite-fired electricity, RWE and Lausitz Energie Kraftwerke AG (LEAG), to encourage the early closure of lignite-fired power plants. In 2021, the country notified the European Commission of its plan to compensate these operators with €4.35bn: €2.6bn were earmarked for the RWE lignite-fired power plants located in the Rheinland and €1.75bn for the LEAG installations in the Lausitz. Germany plans to phase out the use of coal for the production of electricity by 2038.
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