The Schloven coal power plant, owned by E.ON, which is spinning off its generation business to focus on renewables

Operators will be pushed to close coal plants to meet German emission goals

German power firms will be pushed to shut coal-fired plants when the country’s cabinet agree plans to cut CO2 emissions by up to 78 million tonnes by 2020 later today.

Chancellor Angela Merkel’s government has an ambitious goal of cutting CO2 emission by 40 per cent reduction compared to 1990 levels by 2020 and the package, which also includes an energy efficiency programme, is aimed at ensuring the government does not miss this target.

Germany's shift towards renewable energy and away from nuclear and fossil fuels has become a top domestic priority for Merkel, a move accelerated by Japan's Fukushima nuclear disaster in 2011 although launched under her Social Democratic predecessor Gerhard Schroeder in 2000.

"The government is sticking to its national goal," the economy and energy ministry said in a statement yesterday. "It is clear that further measures are necessary to achieve the climate coal of 40 per cent by 2020. All relevant sectors must achieve reductions."

Germany's goals go further than the EU’s plan for a 40 per cent emissions reduction by 2030, but after initially making big strides in cuts thanks to the modernisation of East German industry after reunification in 1990, emissions are on the rise again.

The most contested step in the package will be compelling operators of coal plants to reduce CO2 emissions by at least 22 million tonnes, equivalent to shutting about eight coal plants. Coal accounts for about a third of Germany's CO2 emissions.

The drive has already hit traditional energy firms, as shown by utility E.ON's radical decision to spin off its power plants, both nuclear and coal-fired, to focus on renewables and electricity grids announced earlier this week.

The BDI industry association has said Merkel's plans will hurt Germany's export-oriented industry and cost jobs and the output gap will simply be offset by imports from mostly coal-fired plants in neighbouring states, making the overall contribution to climate change negligible.

But green activists say the plans don't go far enough as although roughly 25 per cent of power generated in Germany comes from renewables, around 45 per cent still comes from coal.

The package, which will require several different laws to go through parliament, also envisages savings of 25 to 30 million tonnes of CO2 emissions through a national energy efficiency plan to modernise buildings and improve insulation.

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