Germany Increases CO2 Tax to Support Coal Phase Out
Local media reported that Germany is aiming for a green start to 2021 by shutting down a coal fired power plant and slapping a CO2 price on transport.
Local media reported that Germany is aiming for a green start to 2021 by shutting down a coal fired power plant and slapping a CO2 price on transport. From January 1, 2021 the government will charge 25 euros per tonne of carbon dioxide emissions released by the transport and heating sectors. The price will increase to 55 euros by 2025, and will be decided at auction from 2026.
Also on January 1, the 300-megawatt Niederaussem D unit power plant near Cologne, running on lignite, became the first to close down as part of Germany's phaseout of coal by 2038. Energy giant RWE, which has operated the plant since it was built in 1968, said decommissioning the facility as required by Germany's 2020 coal exit law- was a difficult step that would lead to some 300 job losses.
Despite a green reputation abroad, Germany remains heavily reliant on dirty coal. In the third quarter of 2020, just over half of the electricity produced came from non-renewables, with coal alone accounting for 26%.
Climate activists, including the youth-led Fridays for Future movement, have urged the government to speed up Germany's coal exit, saying the current timetable of closing all coal fired plants by 2038 is not ambitious enough. To their fury, the government has given special permission for North Rhine-Westphalia's huge open-cast Garzweiler coal mine to keep expanding over the coming years in order to fuel nearby power stations, causing the destruction of several villages in the process. Environmentalists have also railed against the planned multi-billion-euro pay outs set to flow to energy companies in compensation for the plant shutdowns, alongside 40 billion euros in government aid for regions that depend on mining and energy jobs.