Germany plans to force oldest coal plants to cut CO2

Reuters News
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Posted: Mar 19, 2015 9:37 AM

BERLIN (Reuters) - Germany plans measures to force operators of coal plants to curb production at their oldest and most-polluting power stations, as part of efforts to achieve its climate targets, senior government sources said on Thursday.

Concerned it was on track to fall short of goals to reduce CO2 emissions by 40 percent by 2020 from 1990, the cabinet approved a climate package last December.

This included plans to oblige coal operators to slash their emissions by at least 22 million tonnes by 2020, equivalent to shutting about eight coal plants.

Under new measures, the government plans to allow coal plants to produce 7 million tonnes of C02 per gigawatt of installed capacity, for which they will only need to acquire pollution permits under the European Union's emissions trading scheme (ETS), the sources said.

Any C02 produced above that level would, however, be subject to a fine, for example of 18 to 20 euros per ton.

By introducing a fine, the government hopes utilities such as RWE and Vattenfall [VATN.UL] will be forced to reduce production at their oldest and dirtiest coal plants.

The government plans to pass a law by the end of the year regulating the exact size of the fine, with the aim of bringing it into force from 2017, the sources said.

(Reporting by Markus Wacket, writing by Caroline Copley, editing by David Evans)