New Horizons: Germany Phasing Out Black Coal Mining

The energy source that powered Germany’s industrial revolution in the 19th century will be largely phased out starting in 2009. The government approved a plan on Aug. 8 that will bury the country’s unprofitable black coal industry by 2018. The move is expected to cost the government about US$41 billion.

Germany’s eight remaining black coal mines will be closed by 2018, harsh news for the sector’s approximately 35,000 workers.

The government propped up the ailing sector with large subsidies for decades in a bid to preserve jobs. Germany’s federal and regional governments have been subsidizing coal mining by up to US$3.2 billion annually.

The deal does not affect Germany’s lower-value brown coal mining sector, which can produce coal more inexpensively because it uses open-pit mines, and will be reviewed by parliament in 2012 to see if it still makes economic sense.

The agreement ensures continued financial support for the sector until the last mine is closed. The government will provide at least US$29.7 billion in further subsidies until 2018.

Production of black coal fell to 25.6 million tonnes in 2005, down from 150 million tonnes in 1957 according to German news reports. The number of workers in the industry has shrunk from 166,000 in 1985 to 35,000 today. Last year the country’s eight black coal mines produced about 21 million tonnes of coal.

Coal mining “has no future” declared Germany’s Economy Minister Michael Glos on the day of the announcement. “A great, long era is coming to an end in a socially responsible way.” He said that using cheap imported coal undercuts the expense of heavily subsidizing domestic mining.

Seven of the eight coal plants are in the western state of North Rhine-Westphalia, home to the Ruhr industrial region, and one is in the small state of Saarland on the border with France.

The German magazine Der Spiegel reports that around 20 million tonnes of coal is used to fire power stations and 6 million tonnes is used in the country’s steel industry. Black coal provides 20% of German electricity, according to 2005 figures.

Critics of the plan argue keeping some of the mines open would prevent dependence on imports. According to the World Coal Institute, Germany was the world’s fifth-largest importer of coal in 2005. But advocates argue there are ample supplies of coal available from politically stable countries and that Germany will have reliable access to it after its mines are closed.