“We must supply this country with electricity,” Chancellor Friedrich Merz said in March. “I am not prepared to jeopardise the core of our industry simply because we have adopted phase-out plans that have become unrealistic.”
The remark raised a question that once seemed unthinkable: is Germany, Europe’s biggest user of coal for power generation, about to scrap its own phase-out of the fuel?
“Germany's chancellor hints at delaying coal phase-out as soaring gas prices threaten energy security, despite prior pledges.”
Germany has pledged to stop burning coal entirely by 2038, and to end the use of lignite – the most polluting soft coal – even earlier, by 2030. Currently, coal provides about 20% of the country’s electricity, while renewables have surged to 59%. The plan had been to replace coal with natural gas as a backup for wind and solar, especially in winter. Gas plants emit roughly half the carbon dioxide of coal, and today account for 13% of German power.
But the global price of natural gas jumped sharply after the US-Israel conflict with Iran, prompting a string of countries to reconsider coal. Japan loosened rules to allow more coal-fired power; Italy delayed closing its remaining stations until 2038; India postponed maintenance shutdowns. Now Germany, too, faces the same economic pressure.
The problem is one of supply and price. Germany sits on Europe’s largest reserves of lignite – cheap, abundant and entirely domestic. It is the world’s third-biggest holder of the fuel. By contrast, it must import 95% of its natural gas. When the cost of that imported gas spikes, switching back to cheap, home-grown lignite becomes financially irresistible. And unlike gas, there is no risk of supply shortages.
Nuclear power, which could have offered an alternative, is off the table: Germany closed its last nuclear plant in 2023.
German energy firm LEAG, the country’s second-biggest lignite miner, is upbeat. It said it “very much welcome[s] the fact that the German federal government is placing not only medium, but also long-term, security of supply at the heart of its energy policy considerations.” The company already increased lignite supplies to compensate for the halt of Russian gas imports after Russia’s 2022 invasion of Ukraine.
Whether Merz’s words mark the start of a phase-out of the phase-out remains unclear. But with gas prices high, reserves of cheap lignite abundant, and nuclear gone, the economic logic of sticking to the 2030 deadline is crumbling.