Germany targets coal plants to reach 2020 climate goals

[December 03, 2014]  By Madeline Chambers

BERLIN (Reuters) - Germany's cabinet on Wednesday agreed plans to cut CO2 emissions by up to 78 million tonnes by 2020, pushing operators to shut some coal-fired plants, to help Europe's biggest economy meet bold targets to fight climate change, government sources said.

The broad package, which includes an energy efficiency program, is essential if Chancellor Angel Merkel is to avoid the embarrassment of missing her government's goal of a 40 percent reduction in emissions by 2020 compared to 1990 levels.

The government has said sectors from power to transport must step up efforts if Germany is to meet the target, more ambitious than the EU's goal of a 40 percent reduction by 2030.

"The energy package has gone through," said one government source. Details will be released at a news conference later.

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

The closely-watched experiment has hit traditional energy firms, as shown by utility E.ON's radical decision this week to spin off its power plants to focus on renewables and electricity grids.

The cabinet's agreement comes as talks between about 190 governments get underway in Lima, Peru, to lay the groundwork for a U.N. deal to slow climate change.

After big initial strides in cuts with the modernization of East German industry after reunification in 1990, CO2 emissions are on the rise again. The most contested step in the package is compelling coal plant operators to reduce emissions by at least 22 million tonnes, equivalent to shutting about eight plants.

Coal accounts for about a third of Germany's CO2 emissions.

The BDI industry group says Merkel's plans will hurt the export-oriented economy and jobs. Environmentalists it does not go far enough. Greenpeace activists set off black smoke outside Merkel's office and shouted: "Exit coal to protect the climate!"

Although about 25 percent of power generated in Germany comes from renewables, around 45 percent still comes from coal.

The package, which will require several different laws to go through parliament, envisages savings of 25-30 million tonnes of CO2 emissions via a national energy efficiency plan to modernize buildings and improve insulation. It also includes incentives for electric cars and stricter rules on fertilisers and waste.

(Additional reporting by Andreas Rinke, Thorsten Severin and Markus Wacket; Editing by Mark Heinrich)

[© 2014 Thomson Reuters. All rights reserved.]

Copyright 2014 Reuters. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.