Sustainable energy alone does not make the EU a climate leader

European climate policy should not focus solely on stimulating the use of sustainable energy sources, but should also focus on scaling down the use of coal. Germany is a prime example of what happens when that last part gets left by the wayside, argue Gert Jan Kramer, Herman Lelieveldt and Gerrit Rentier.

This blog was published on 11 December 2019 on the climate blog of the NRC.

At the climate summit in Madrid, all eyes are on the EU's ambitions, especially now that the new European Commission has made the climate into a key topic with its Green Deal. Will we be able to maintain the momentum achieved since the Paris Agreement? And can the EU expand on its leading role with regard to climate policy?

In the last couple of years, the share of renewable energy in the EU increased from 8.3 percent in 2004 to 17.5 percent in 2017. It seems like the goal of reaching 20 percent in 2020 is attainable. Production costs for electricity generated by wind and solar power are lower than they are for coal-fired electricity. If it were up to the market, then, coal-fired power stations would gradually disappear and the remaining coal mines would close.

Political interests can lead to certain countries holding on to coal-fired power for an unreasonably long time

However, this is not the case in all EU countries. Political interests can lead to certain countries holding on to coal-fired power for an unreasonably long time, according to a comparative analysis we made of four EU Member States. Take Germany and the United Kingdom, for instance. These countries were in similar situations in 1990, with two-thirds of the electricity being generated by coal-fired power stations and 90 percent of coal being mined nationally. In the meantime, a different picture has emerged. While the share of coal used in the United Kingdom saw a significant decline, it stayed the same in Germany.

German taxpayers

In the United Kingdom, privatisation and liberalisation of the energy sector have been key terms since Prime Minister Margaret Thatcher was in office in the 1980s. Coal mines, which were running at a loss, had to close despite fierce opposition by miners and unions. The phase-out of coal firing was also facilitated by the discovery of large amounts of natural gas in the British part of the North Sea.

What's more, the United Kingdom introduced its own carbon tax in 2013, which made coal-fired electricity much more expensive than gas-fired electricity. As the British were also accelerating the roll-out of offshore wind energy, they managed to bring down the share of coal as fuel for the generation of electricity by 63 percent in 25 years.

In Germany liberalisation and privatization have stagnated, causing the survival of the coal mining industry

This is quite the contrast with the situation in Germany. There, liberalisation has not come as far as it has in the United Kingdom. Regional authorities are often shareholders in the big energy corporations that own the coal mines, related infrastructure and coal-fired power stations. That means these owners have strong links with the German federal government. Additionally, German miner's unions have always had easy access to the political sphere as well.

That strong lobby helped ensure that, in the decades after 1975, German taxpayers kept the coal mining industry alive through the Kohlepfennig (or 'coal penny', an 8 percent tax on electricity). While the German Federal Constitutional Court ruled that the Kohlepfennig was against the constitution in 1994, effective lobbying by unions and coal companies made sure the German government still supported coal, this time through a 1.6 billion euro purchase obligation.

Phasing out coal

By artificially prolonging the life of the dwindling coal industry like that, German use of coal only fell by 12 percent in the last quarter of a century. A drastic reduction of coal use is not likely to happen in the near future, either. Pursuant to a controversial proposal by the Kohlekomission (coal committee), the phase-out of coal will only be completed by 2038, and even that deadline is not set in stone, due to the influence of the coal lobby. The increasingly popular Alternative for Germany (AFD) party opposes the phasing out of coal, while the conservative wing of the Christian Democratic Union of Germany (CDU) is sabotaging the Kohleausstieg (or ‘coal exit’, the phasing out of coal).

Not only is this lack of ambition in Germany bad for the energy transition in Germany itself, but also sends the wrong signal to other EU Member States

Not only is this lack of ambition in Germany bad for the energy transition in Germany itself, it also sends the wrong signal to other EU Member States, as well as the international community. This is despite the fact that burning coal causes over 70 percent of the electricity sector's global carbon emissions and forms 30 percent of the total carbon dioxide problem.
As long as Germany holds on to its coal interests, Poland and its neighbours will also want to defend their coal interests. That would jeopardize not only the European climate targets, but also the EU's leadership role in shaping international climate policy. If the European Union does not show sufficient unity and ambition, major powers like China, Brazil and India will be more reluctant to take further action as well.

Momentum

At the climate summit in Madrid, Ursula von der Leyen, the new President of the European Commission, has the opportunity to demonstrate that the EU is not content with a leading role in the acceptance of renewable energy, and also intends to lead the way in phasing out the use of fossil fuels. She could use this momentum as leverage to encourage Germany to press on with the Kohleausstieg, and to prevent a situation where the only way for them to realise the phase-out is by paying large sums of money to shut down the mines. That would allow the European Commission to get a running start for its climate ambitions, while simultaneously speeding up the implementation of the Paris Agreement.

Gert Jan Kramer is professor of Sustainable Energy at Utrecht University, Herman Lelieveldt holds the Jean Monnet Chair of Political Sciences in Middelburg and Gerrit Rentier works for the Zeeuwind energy cooperative and is an external PhD candidate at Utrecht University.

Scientists from Utrecht University are reporting in the climate blog of the NRC on their research in the field of sustainability. They are united around the strategic theme of 'Pathways to Sustainability.

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