Germany has the fourth largest economy in the world, after the United States, China and Japan, and accounts for one fifth of EU energy use. In 2022, Germany’s gross domestic product was approximately €3.9 trillion. Adjusted for inflation, German GDP grew by 1.8% compared with the previous year. After the Covid-19 crisis and an economic downturn in 2020, it was hoped the German economy would recover. However, the war in Ukraine, rising energy prices, and record inflation combined to dampen economic growth in 2022. The unemployment rate in 2022 was 3.1%.

 

General data		2022
Population	million	84.4
GDP	€ billion	3 876.8
Per capita GDP	€/person	46 000

Germany has considerable reserves of lignite at 35.4 billion tonnes, making it an important indigenous source of energy. The last two hard coal mines were closed in 2018, following a political decision eleven years earlier to end subsidised German hard coal production.

In 2022, domestic primary energy production, excluding nuclear power generation, totalled 124.4 million tonnes of coal equivalent (Mtce), broken down as follows: 69.2 Mtce of renewable energy (55.6%), 40.7 Mtce of lignite (32.7%), 5.2 Mtce of fossil gas (4.2%), 2.5 Mtce of oil (2.0%) and 6.8 Mtce of other fuels (5.5%).

Germany’s primary energy consumption was 401.6 Mtce in 2022. Oil accounted for the largest share (35.3%), followed by fossil gas (23.6%), coal (19.8%), renewables (17.2%) and nuclear power (3.2%). Within the figure for coal, hard coal accounted for 9.8% and lignite for 10.0% of total primary energy consumption. Germany depends heavily on energy imports, except in the cases of lignite and renewable energy. The country’s overall energy import dependence was 72% in 2022, 100% in the case of hard coal.

Power generation is characterised by a diversified energy mix with hard coal and lignite being essential pillars. In 2022, Germany’s gross power generation of 580.3 TWh was produced as follows: 43.2% from renewable energy sources, 32.7% from coal (of which 19.9% was from lignite and 12.8% from hard coal), 15.7% from fossil gas and oil, 6.0% from nuclear, and 2.3% from waste and other sources. In 2023, power generation from lignite is expected to be at least 20% lower due to a significant decline in domestic electricity consumption, a reduction in generation capacity as part of the gradual coal phase-out, an increase in electricity production from wind turbines and higher electricity imports.

Since 2011, the German government enacted several new or amended energy laws and other measures to foster change in the energy sector. This fundamental, long-term change is known as the Energiewende or “energy transition” to renewable energy sources and included the phase-out of nuclear power generation in Germany by the end of 2022. However, in response to the ongoing energy crisis, the lifetimes of the last three nuclear power plants were extended to mid-April 2023, reflecting the pressing need to ensure a stable energy supply during a challenging period.

On 3 July 2020, the German Bundestag passed the Coal-fired Power Generation Termination Act (KVBG – Kohleverstromungsbeendigungsgesetz) which came into force on 14 August 2020. This law outlines a roadmap for shutting down coal-fired power plants to achieve climate protection goals while ensuring energy supply. The roadmap is based on recommendations from the Growth, Structural Change and Employment Commission. It guarantees social support for coal regions and promotes new economic perspectives. Lignite use for power generation will be phased out gradually and end by 2038 at the latest, following a detailed plan. Hard coal power plants will close from 2020 to 2026 through tenders for compensation, and from 2027 to 2038 through mandated closures without compensation.

The coal phase-out plan includes mitigation measures for affected workers: adjustment payments for older employees until 2043, along with support for new qualifications. The federal government will invest up to €40 billion by 2038 for restructuring in the coal regions with new infrastructure, research institutions and development projects.

In December 2020, the European Commission informed the Federal Ministry for Economic Affairs and Energy (BMWi) that it would launch a state-aid investigation on the proposed compensation for lignite companies. BMWi subsequently notified the European Commission of the Coal-fired Power Generation Termination Act (KVBG). This procedure should complete by the end of 2023.

After complaints brought by climate activists, the Federal Constitutional Court ruled in April 2021 that parts of the Climate Protection Act of 2019 were not compatible with the Basic Law of Germany. According to the Court, the Climate Protection Act did not go far enough as it only set a greenhouse gas (GHG) emission reduction target for 2030. To protect the fundamental rights of future generations, it ruled that the legislature should set well-defined climate targets for the period after 2030. In June 2021, the German Bundestag revised the Climate Protection Act by adding the goal of climate neutrality by 2045 and increasing the GHG emission reduction target for 2030 from 55% to 65%. The energy and industrial sectors are expected to bear the largest shares of the emission reduction target. Here, the German Environment Agency (UBA – Umweltbundesamt) advocates for advancing the coal phase-out to 2030 instead of 2038 and for the faster roll out of solar and wind power. But while the energy sector is meeting its targets, other sectors lag behind. Nevertheless, in June 2023, the federal cabinet decided to amend the Climate Protection Act to eliminate mandatory sectoral emission targets; a cross-sectoral goal remains in effect.

The federal election in September 2021 resulted in a coalition of the centre-left SPD, the Greens, and the liberal FDP. The new government established even more ambitious climate goals to increase the share of renewables to 80% of gross electricity consumption by 2030 and to phase out coal “ideally by 2030”. As there is also expected to be a substantial rise in electricity consumption, an Immediate Climate Action Programme for 2022 was introduced to tackle these multiple challenges.

At the same time, the energy policy landscape has undergone a significant shift due to the war in Ukraine. This has led to increased energy prices, emergency measures, and embargoes on Russian coal and oil imports. To ensure energy security, a gas replacement reserve of coal and oil plants was introduced under the EKBG (Ersatzkraftwerke-bereithaltungsgesetz) alongside the temporary reactivation of lignite-fired power plants. The federal government amended the Energy Security Act (EnSiG), the Energy Industry Act (EnWG) and extended the Energy Security Transport Ordinance (EnSiTrV). Under the EnSiTrV, the rail transport of energy products can be prioritised. Recognising the need for economic stability, rising energy costs were tackled in December 2022 with price-control laws.

As per the Coal-fired Power Generation Termination Act (KVBG), the federal government committed to periodic assessments, beginning in August 2022 and including defined criteria with corresponding indicators. These will examine the impacts of the coal phase-out by 2038 on energy security, electricity prices, climate protection and social cohesion. However, due to the administrative workload prompted by the crises, the initial assessment was postponed. Furthermore, a new assessment objective has been introduced, namely an expert evaluation of the potential for a coal phase-out by 2030. An analysis of the supplementary measures needed to achieve this outcome is proposed. Moreover, a new investigation will determine whether a coal phase-out by 2030 would align with the climate protection targets for the energy sector set out in the Climate Protection Act.

Hard coal

Germany’s consumption of hard coal in 2022 was 39.4 million tonnes of coal equivalent (Mtce), an increase on the previous year. Thus, the steady downward trend over several years was interrupted due to the direct and indirect consequences of the war in Ukraine and the strengthening economic recovery after the Covid‑19 pandemic. Coal was able to help offset the decline in fossil gas supply. An additional challenge was the structural decline in nuclear power generation.

The most important coal-consuming sector is utility and industrial power generation: 20.3 Mtce in 2022. In contrast, the use of hard coal in the German steel industry was 18.2 Mtce. Other sectors, mainly the heating market, consumed 1.6 Mtce, a market which includes foundries, district heating plants, small businesses and households.

Since the end of hard coal mining at the end of 2018, the German hard coal market has been supplied by imports alone: 42.3 million tonnes in 2022, including 30.7 million tonnes of steam coal and 11.6 million tonnes of coking coal. Germany also imported 2.2 million tonnes of coke. With the war in Ukraine and trade embargoes, Russian coal imports fell to zero by the end of 2022, having accounted for as much as 50% of total coal imports in previous years. Other countries benefited from the fall of Russian coal imports: South Africa, Colombia and the United States.

The core activities of RAG, the former German hard coal mining company, are now: mine water management, repairing subsidence damage due to past coal mining, and the restructuring of former coal mining areas. The private RAG FOUNDATION, created in July 2007, is the owner of RAG and majority owner of EVONIK, a speciality chemicals company. The ongoing, post-mining liabilities are financed by the proceeds of the foundation which also promotes education, science and culture in the mining regions.

Brown coal and lignite

Lignite supply in 2022 totalled 39.9 Mtce with insignificant trade – exports of pulverised lignite and briquettes amounted to 0.9 Mtce.

Nearly 90% of lignite production is used for power generation (116.9 million tonnes in 2022), accounting for 19.9% of total power generation in Germany.

With the shutdown of the lignite power plants Neurath B, Niederaußem C, and Weisweiler E in the Rhineland at the end of 2021, in accordance with the Coal-fired Power Generation Termination Act (KVBG), a total of 900 MW of lignite power plant capacity was no longer available. The total lignite power plant capacity as of 1 January 2022 was 20 814 MW. In April 2022, another power plant unit (Neurath A) with a capacity of 300 MW was also decommissioned. Nevertheless, lignite was still able to make a significant contribution to power supply in 2022.

To ensure supply security in times of crisis, the government allowed the temporary return of coal power plants to the electricity market. The lignite power plants Jänschwalde E & F, Niederaußem E & F, and Neurath C, with a total capacity of 1.9 GW, are part of a new supply reserve created on 1 October 2022. Temporary market participation is possible until 31 March 2024 if gas supply alerts or emergencies are declared, based on the Supply Reserve Call Regulation (VersResAbV). Restarting the lignite power plants required extensive work and more staff to ensure the facilities were ready for extended operations at high load. Previously, three of the affected reserve power plants were to have been permanently shut down on 30 September 2022, and two more on 30 September 2023.

In the Rhineland, RWE POWER AG produced a total of 65.3 million tonnes of lignite in 2022 from three surface mines: Hambach, Garzweiler and Inden. Almost 90% of the lignite was consumed at the company’s own power stations with a gross installed capacity of 10 416 MW (as of 1 January 2022), while 7.2 million tonnes were used for processed products.² In line with the KVBG, lignite briquetting in the Rhineland region ended on 31 December 2022. At the end of 2022, the Rhenish mining area had a total workforce of around 7 700.

RWE has reached an agreement with the federal and state ministries of economic affairs to terminate market-oriented lignite use by 2030. This political consensus has since been legally enshrined in the Coal-fired Power Generation Termination Act (KVBG). Accordingly, to secure power generation and displace gas use, Neurath D & E, originally slated for decommissioning by the end of 2022 and with a total capacity of 1 200 MW, will continue to operate until 31 March 2024, with an option for extension to March 2025.

To secure power supply beyond 2030, the federal government can also decide in 2026 whether four lignite power plant units will be transferred to a reserve until the end of 2033. These include a 600 MW unit as well as the three most modern facilities with optimised technology (BoA), totalling around 3 600 MW. Should such a reserve be called into service, its fuel supply would require no changes to the planning approval for Garzweiler mine. Coal extraction would continue in parallel with ongoing land rehabilitation without altering land use or restoration activities.

In the Lusatian mining region, the Czech company EPH owns LAUSITZ ENERGIE BERGBAU AG (LEAG) and extracts lignite at the Jänschwalde and Welzow-Süd surface mines in Brandenburg, as well as at the Nochten and Reichwalde mines in Saxony, all with a total output of 48.5 million tonnes in 2022. Significantly more coal was extracted than initially planned, driven by a considerably higher demand from power plants and refineries due to high prices in the electricity and heating markets linked to the gas crisis and the war in Ukraine. The Jänschwalde surface mine is set to be phased out as planned by the end of 2023.

Lignite deliveries to power plants in Lusatia totalled 44.6 million tonnes in 2022. LEAG is the main operator of lignite-fired power plants in the mining area with a total gross capacity of 7 175 MW, including the Jänschwalde, Schwarze Pumpe and Boxberg power plants. At the end of 2022, LEAG had a total workforce of around 7 300.

The Central German mining area around Leipzig yielded a total of 17.0 million tonnes of lignite in 2022. The most important company in this area is MIBRAG, also owned by the Czech company EPH. It has two surface mines at Profen in Saxony Anhalt and Vereinigtes Schleenhain in Saxony. The company supplies lignite to its combined heat and power plant at Wählitz with a capacity of 37 MW, as well as to the larger LEAG/EnBW Lippendorf (1 862 MW) and Saale Energie GmbH Schkopau (980 MW) power stations. At the end of 2022, the Central German mining area had a total workforce of around 1 800.

Also in Central Germany, ROMONTA GmbH operates a surface lignite mine in Amsdorf, Saxony-Anhalt, exclusively for the material use of lignite, namely for the extraction of montan wax. Thanks to its special properties, montan wax is used primarily in specialty chemicals, e.g. for the production of high-tech plastics, for skincare and cosmetics products, as well as in cleaning agents and for the hydrophobic treatment of building materials. In addition, montan wax is used as a forming wax in investment casting and as an additive to modify the performance of asphalt and bitumen. Lignite production amounted to 458 thousand tonnes in 2022. The wax-free coal residue is currently still used in Amsdorf to generate process heat and electricity, but will not be used as a fuel at the site in the future. Alternative energy sources will be used to secure the heat supply for montan wax production.

Extraction of lignite from surface mines changes the natural landscape, so land reclamation is an integral part of any mining project. Mining activities are only complete following the transformation of a former “industrial” mine site into a vibrant landscape. For more than one hundred years, nature has inspired landscape restoration projects in Germany, including indigenous flora and fauna. Projects that return land to productive use, often with a high recreational and agricultural value, are most typical.

The coal phase-out has necessitated modifications to approved mining plans. A new balance among the various interests in the lignite mining areas, including agriculture, forestry, local authorities, water management, nature conservation and, last but not least, mining, had to be established.

The lignite industry itself is making significant contributions to the necessary conditions for the coal phase-out. German lignite mining companies RWE, LEAG, MIBRAG, and ROMONTA are heavily investing in renewables, energy storage and H₂-ready gas power plants. By 2030, the lignite regions alone are projected to add another 9 GW of installed renewables capacity. Additionally, plans are in place for 6 GW of H₂-ready gas power plants.

Other companies within the lignite industry are also adapting to the transition. This includes exploring new value chains, expanding business sectors, and investing in workforce development. The objectives are twofold: developing sustainable power generation projects and safeguarding employment within the lignite regions.

Oil shale

Germany has reserves of 150 million tonnes of oil shale in the Franconian Jura region of Bavaria, in northern Germany near Brunswick, and in Swabian Jura, Baden-Württemberg. Only the latter deposit (CV 3 000–4 000 kJ/kg) is exploited to supply a HOLCIM GROUP cement works at Dormettingen with around 0.5 million tonnes of shale each year. As cement making is carbon-intensive, with few renewable alternatives, there are no plans to end this oil shale use.

Germany

Coal production, reserves and resources		2022
Hard coal saleable output	Mt	–
Hard coal reserves	Mt	–
Hard coal total resources	Mt	82 965
Lignite saleable output	Mt	130.8
Lignite reserves	Mt	35 400
Lignite total resources	Mt	71 900

Saleable coal quality
Lignite net calorific value	kJ/kg	7 000 ‑ 11 300
Lignite ash content	% a.r.	1.6‑16
Lignite moisture content	% a.r.	48.0 ‑ 62.0
Lignite sulphur content	% a.r.	0.15 ‑ 2.1

Coal imports / (exports)		2022
Hard coal	Mt	42.3 / (1.0)
Lignite	Mt	0.0 / (0.0)

Primary energy production		2022
Total primary energy production	Mtce	124.4
Hard coal production	Mt / Mtce	0.0 / 0.0
Lignite production	Mt / Mtce	130.8 / 40.7

Primary energy consumption		2022
Total primary energy supply	Mtce	401.6
Hard coal consumption	Mt / Mtce	40.2 / 39.4
Lignite consumption	Mt / Mtce	130.9 / 39.8

Power supply		2022
Total gross power generation	TWh	580.3
Net power imports (exports)	TWh	(27.3)
Total power supply	TWh	532.3
Power generation from hard coal	TWh	74.1
Power generation from lignite	TWh	115.4
Hard coal power generation capacity	MW net	18 939
Lignite power generation capacity	MW net	18 550

Employment	2022
Direct in hard coal (post mining)	number	655
Direct in lignite mining	number	13 384
Other lignite-related *	number	3 822

* e.g. in power generation, equipment supply, services and R&D

² Raw coal use for upgraded products without the quantities required for electricity and process steam generation at the refining sites.