A government-appointed commission in Germany has unveiled plans to phase out the country’s coal-fired plants by 2038.

According to the Financial Times, power plants that run on coal and lignite currently generate 42GW, around 40% of Germany’s electricity. The plan proposes that coal will be phased out gradually – power production from coal-fired plant will be reduced to 30GW by 2022, 17GW by 2030 and 0 by 2038.

The shortfall in energy will be made up by renewables. According to Clean Energy Wire, renewables accounted for 35.2% of Germany’s energy production in 2018 and should account for 65% by the end of the 2020s. Nuclear power will not play a part, as the German government announced in 2011 it would exit nuclear energy by 2022.

The plan is expected to cost €40bn over the course of 20 years, as money will need to be transferred to regions in Germany where coal is an important energy source and job provider. The commission called for the government to protect people from rising electricity prices, which could cost German taxpayers an extra €2bn a year.

The plan will allow Germany to meet its goals in reducing its carbon dioxide by more than 60% by 2030, as it is currently behind on its 2020 emissions targets.

The deal has been met with a mixed response in Germany. Coal commission board member and former Christian Democratic of Germany politician Ronald Pofalla said: “27 out of 28 participants have agreed to the deal. I would call that an absolutely optimal result […] it was a historic tour de force. Implementing the deal would place Germany once again among international climate protection frontrunners […] Germany can show that it can remain a highly industrialised nation while protecting the climate.”

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By GlobalData

Trade Unions are concerned that plans to phase out coal will hurt communities that rely on coal mines for employment.

Head of mining union IG BCE Michael Vassiliadis said: “We have found a compromise after 21 hours of negotiations that cannot make us happy but leaves us overall satisfied. We managed to shield the employees in coal power generation from social hardships from the structural change. At the same time, the coal phase-out is closely tied to verifiable progress with the future energy mix, the expansion of renewables and the grids.”

Greenpeace Germany director Martin Kaiser added: “Germany finally has a road map towards becoming coal-free […] But the [commission] report has one severe flaw: the speed is not right. To exit coal only by 2038 is not acceptable to Greenpeace.”

Germany’s gradual reduction of coal is similar to that of its neighbour Poland. Coal currently generates 80% of Poland’s electricity but should reduce to 50% by 2040.

Chancellor Angela Merkel’s government is expected to adopt the panel’s recommendations.

With additional reporting by Jack Unwin