Legislative Changes Pave Way for Compensation Payments to Leag Amid Germany's Coal Exit

Germany is moving forward with legislative amendments to facilitate compensation payments to energy provider Leag as part of the nation's accelerated coal phase-out. The Federal Ministry for Economic Affairs has indicated that approval from the European Commission regarding these payments is expected in the near future, following an ongoing review process. These developments mark a significant step in Germany's efforts to transition away from coal-based energy production in accordance with climate objectives.

To enable the disbursement of compensation, the federal government is updating the existing Coal Exit Act. The proposed amendments are intended to establish the necessary legal framework for providing financial support to Leag, particularly for the early closure of its coal-fired power plants. The legislative package, prepared by the Ministry for Economic Affairs, aims to ensure that the adjustments to national law are completed promptly, with the goal of enacting new provisions before the end of the year.

Under the revised regulations, Leag is set to receive substantial financial compensation. An initial reimbursement of approximately 377 million euros is earmarked for advance payments already made to entities responsible for land reclamation associated with former mining sites. These funds are managed by dedicated organizations tasked with restoring affected landscapes, ensuring that post-mining regions are rehabilitated in line with environmental standards.

Between 2025 and 2029, Leag will also be eligible for annual payments of around 92 million euros, which will be directed to these reclamation organizations. These disbursements are designed to cover all federal funding allocated for the environmental restoration required as a result of the coal exit. According to a spokesperson from the Ministry for Economic Affairs, these amounts are intended to ensure that the financial obligations for land rehabilitation are fully met.

In addition to environmental compensation, Leag is entitled to reimbursement for social costs incurred as a result of the early termination of coal operations. This includes expenses related to workforce restructuring and the implementation of social plans for affected employees.

Should the Federal Network Agency determine that Leag has experienced financial losses due to the premature closure of power plants, additional payments may be issued. The total amount of federal support available under these measures could reach up to 1.75 billion euros, contingent upon relevant approvals and assessments.

The government's approach is structured to comply with European regulations, with the final disbursement of funds subject to authorization by the European Commission. The aim is to ensure a transparent and legally sound process as Germany continues its transition to renewable energy sources and the gradual reduction of fossil fuel dependency.

By advancing these legislative adjustments and financial arrangements, Germany reaffirms its commitment to meeting national and European climate targets, while also providing for the social and environmental responsibilities associated with the coal phase-out.