According to the plans on cessation of brown coal using at power plants till 2038, the government of Germany will pay compensation worth about 40 billion EUR to regions and companies.

This news was reported by the Minister of Economy Peter Altmaier, Caspian Energy News reports, citing Reuters.

The plans are a part of measures aimed at reducing greenhouse gas emission in Europe’s biggest economy down to 55% (from the level of 1990) in 2030. Brown coal is considered the most contaminating type of coal because a low content of heat in it means that it has to be burnt more.

The government agreed to pay over 14 billion EUR, as a financial aid, to federal lands such as Brandenburg, North Rhine-Westphalia, Saxony and Saxony-Anhalt which would be affected by refusal of coal most of all.

Energy companies competing internationally will have a right for annual subsidies, starting from 2023, to cover big expenditures on electricity caused by rejection of coal. The details regarding these subsidies are not known yet.

Two government sources told Reuters that Berlin plans to pay compensation worth about 2.6 billion EUR to RWE, the second largest energy company of the country, for the shutdown of coal stations.

The mining company Mibrag, which belongs to the Czech energy company EPH, will probably get compensation worth 1.75 billion EUR.

Energy losses caused by refusal of coal should be compensated by adding natural gas-driven capacities at existing plants.

Germany is the world’s largest producer of brown coal which accounts for about 19% of electricity generation in the country.