Chancellor Angela Merkel clinched a deal to kickstart Germany’s stalled coal exit, offering billions in compensation to utilities and coal regions so that closures of plants can start this year.
In talks that began Wednesday evening and lasted well into the night, the government hammered out a timeline with coal-state leaders to shut down the country’s coal-fired power generation by 2038, a plan that includes 40 billion euros in compensation for impacted regions.
Firms will also get billions in compensation. Utility RWE AG , Germany’s biggest coal-fired power producer, will receive 2.6 billion euros in payments, according to a person familiar with the matter. Lignite operators in eastern Germany will receive 1.75 billion euros, German Finance Minister Olaf Scholz said at a press conference in Berlin.
A spokesman for RWE declined to comment on the compensation sum, adding the company would comment later Thursday. RWE’s stock gained 1.7% in early Frankfurt trading to hit its highest level since October 2014.
Merkel has faced ongoing pressure to slash carbon emissions more swiftly. Climate issues are top of voter concerns, polls show, and most approve of pulling out of coal. Germany will miss its 2020 targets under the Paris Agreement and could fall further behind if it doesn’t start closing coal-fired power plants soon.