Legal briefing: The Commission’s doubts on the State aid compensations for the closure of LEAG and RWE lignite plants in Germany

The European Commission has opened formal investigations into compensations provided to RWE (EUR 2.6 billion) and LEAG (EUR 1.75 billion) for the closure of lignite plants in Germany by 2038. The Commission preliminarily concludes these payments constitute state aid and expresses doubts regarding their proportionality, specifically whether the calculations for foregone profits and mine rehabilitation costs are realistic or lead to overcompensation. ClientEarth argues that the aid may violate the 'polluter pays principle' regarding mine recultivation and that declining market conditions and rising CO2 prices make the assumed long lifespans of the plants unrealistic.

• The European Commission has preliminarily determined that the compensations for RWE and LEAG constitute state aid because they likely exceed what would be justified as damages under German law, particularly for plants already written off.
• The planned compensations under the German Coal Exit Law total EUR 2.6 billion for RWE for closures in Rhineland and EUR 1.75 billion for LEAG for closures in Lusatia.
• The Commission doubts the proportionality of the aid, questioning if the assumed lifespans of the plants (some projected until 2061) are realistic given technical limits, mandatory environmental standards, and increasing CO2 prices.
• There are significant uncertainties regarding the additional rehabilitation costs for opencast mines, with ClientEarth arguing that such payments may breach the 'polluter pays principle' since operators are legally liable for remediation.
• ClientEarth contends that the aid may lack an incentive effect because some installations, particularly those operated by LEAG, would have closed earlier under market conditions due to the declining profitability of lignite.

APA

Delarue, J. (2021). Legal briefing: The Commission’s doubts on the State aid compensations for the closure of LEAG and RWE lignite plants in Germany. ClientEarth. https://www.clientearth.org/media/awfpcyug/german-lignite-compensations_clientearth-legal-briefing-on-com-opening-decision_27-04-2021.pdf

Chicago

Delarue, Juliette. Legal briefing: The Commission’s doubts on the State aid compensations for the closure of LEAG and RWE lignite plants in Germany. ClientEarth, 2021. https://www.clientearth.org/media/awfpcyug/german-lignite-compensations_clientearth-legal-briefing-on-com-opening-decision_27-04-2021.pdf.

Wikipedia

{{cite report |last1=Delarue |first1=Juliette |title=Legal briefing: The Commission’s doubts on the State aid compensations for the closure of LEAG and RWE lignite plants in Germany |publisher=ClientEarth |date=1 April 2021 |url=https://www.clientearth.org/media/awfpcyug/german-lignite-compensations_clientearth-legal-briefing-on-com-opening-decision_27-04-2021.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{delarue2021legal, author = {Delarue, Juliette}, title = {{Legal briefing: The Commission’s doubts on the State aid compensations for the closure of LEAG and RWE lignite plants in Germany}}, institution = {ClientEarth}, year = {2021}, month = apr, url = {https://www.clientearth.org/media/awfpcyug/german-lignite-compensations_clientearth-legal-briefing-on-com-opening-decision_27-04-2021.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }