Coal “bears brunt” of commission recommendations

(Posted on 31/01/19)

The Coal Importers Association of Germany has commented on how it believes hard coal bears the brunt of the recommendations of the German Commission on Growth Structural change and employment.

The Coal Importers Association e. V. (VDKi) represents the interests of the imported hard coal market in Germany. The German and European members come from the fields of power industry, industry, trade and logistics. The association currently has 59 members, whose plants consume about 80 % of the German hard coal requirement of around 45 million tonnes. Imported coal covers 100 % of Germany's coal requirements. The VDKi thus represents the entire hard coal market in Germany with a financial volume in the billions. The VDKi regularly examines the significance of the global hard coal markets for the European and German import hard coal markets, points out prospects for the further development of imports and regularly publishes statistics on German hard coal imports and prices.

The association states that, “In its final report, the Commission makes no mention of the contribution of hard coal to reducing CO₂ emissions, although hard coal has made the main contribution to reducing emissions in recent decades. By the end of 2018, it had cut its fuel consumption for electricity generation in half compared to 1990.

Against this background, the Commission nevertheless proposes to reduce the output of hard coal-fired power plants by 7.7 GW to around 15 GW as early as 2022. Not only is this proposal completely unrealistic, it also shows that representatives of regions, business, trade unions and environmental organisations have "reached agreement" at the expense of coal, an energy source not represented in the Commission. At the same time, they violate the goals of climate policy, economic efficiency and security of supply.

Hard coal-fired power plants are the existing and economical bridge solution for the energy system transformation: They compensate for the fluctuating supply of renewable energy sources. Whether the required capacity of open gas turbines will be completed by 2022 is highly uncertain. What is certain, however, is that this will cause additional costs that one could confidently do without. Because open gas turbines have a lower efficiency than coal-fired power plants - this measure is counterproductive in terms of climate policy. It makes the energy system transformation more expensive and provokes the demand of the economy for relief from these costs. And yet it would have been the easiest way, especially for business representatives, not to let this nonsensical cost burden arise in the first place.

As the world's leading exporter, Germany cannot isolate itself from the rest of the world in terms of energy economics. Hard coal is available worldwide free of political risks. Natural gas is not only associated with political risks but will also unnecessarily increase the price of energy supplies in Germany.

In its final report, the Commission reduced the 'coal industry' to those employed in power stations, ignoring those employed in trade and logistics. In the Ruhr area and Saarland there are many hard coal-fired power plants which have either been shut down in recent years or are still in operation. These regions have by no means survived the structural change and would urgently need support. Instead, this flows into regions with lower unemployment in many places than in the Ruhr area. Although this is to be understood as an electoral tactic, it has nothing in common with the Commission's mandate.

Nor can this be justified by the fact that the Commission 'discovered' the hard coal very late. In its interim report of 25 October 2018 on possible measures for the social and structural development of the lignite regions, it acknowledged that the Commission's work had so far focused only on structural change in the lignite mining areas. In avoiding structural breaks, however, she only thought of the lignite mining areas. For hard coal there was only one "if necessary" in the interim report and some project proposals for structural development for Saarland in the final report.”