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Government Minister Axel Horstmann: “The emissions trading system must not be allowed to destabilise the energy mix”

Statement from the Ministry for Transport, Energy and Regional Planning: In referring to the reports on a discussion paper from the Federal Environment Ministry, which expressed the intention, under the proposed emissions trading scheme, to make coal-based power generation much more expensive and as a result to put coal-fired power stations at a disadvantage compared with gas-fired plant, NRW Energy Minister Axel Horstmann commented:

Minister Dr. Axel Horstmann

Dr Axel Horstmann: “Given today’s awareness of the finiteness of resources it makes no sense whatsoever to seek to replace one type of fossil energy with another. Instead we really need to focus on innovation and on boosting energy efficiency across the fuel range. If we are to create a secure, cost-effective and eco-friendly energy supply we need fossil fuels such as coal, gas and oil just as much as the renewables. A broad energy mix lays the basis for affordable prices for consumers and industry alike, and this is of vital importance for Germany as a whole and for NRW in particular as an industrial centre. Any one-sided stipulation in favour of a single fossil fuel would only disrupt this balance.”

The Minister went on to say that plans to replace coal with gas would simply not produce the ecological benefits being claimed across the board. Plantside emission measurements do not take account of the fact that the extraction of gas in remote regions of the world, together with its transport to consumers, is also wasteful and generates considerable emissions of its own. The long-term availability of natural gas is also a factor that needs to be considered. Furthermore, we cannot be sure whether the Hürth gas-fired power station, which has long been backed by the regional Government, will in fact ever be built by the investors.

Some 40% of Germany’s power-station capacity will be due for renewal in the next two decades alone. “We want to realise this investment on the basis of the most modern and most innovative technology. We have now taken the first steps: the lignite-fuelled power plant at Niederaussem, which boasts energy efficiency levels unmatched anywhere in the world, has recently been commissioned and has now gone into service. Two further installations with even higher efficiency rates are now being planned for the Rhine basin. For these to become reality we need planning predictability and an appropriate energy and climate policy framework. Modern coal-fired power stations are now being developed. These will provide export opportunities for other companies too“, says the Energy Minister, who then goes on:

“While of course no-one can or wants to prescribe specific regulatory conditions in a competitive marketplace for decades to come, nevertheless the rules for the allocation of emission trading permits must be aligned to the fact that because of the very long lead time involved investment in the large power-plant sector needs planning predictability, and that as a centre of commerce and industry we are particularly dependent on indigenous fuels, such as coal and renewables, especially as we prepare to phase-out our nuclear power.

In any case, the ambitious emission-reduction targets of the kind that we have been applying in NRW for years do not conflict with this objective. Basing so-called benchmarks primarily on the carbon content of the primary fuels does not bring us any further forwards.

No more than the targeted promotion of a fuel switchover by transferring bundles of trading permits from coal to gas-fired installations. On the other hand, as far as increasing efficiency goes, the greatest potential for reducing emission levels will still lie with the new technological advances. The success of the emissions trading scheme in Germany will in fact be measured by the extent to which it can give a new dynamic not just to energy efficiency, low emission performance and cost effectiveness in equal measure but also to economic development throughout NRW and to the employment sector.”