Germany's RWE coal phase-out to cut 6,000 jobs in 10 years
Company says compensation from German government is lower than expected
Germany’s biggest power producer, RWE, is to cut around 6,000 jobs by 2030 as it decides on how to organise an exit from brown coal mining as an energy source.
“The number of employees in our brown coal system will fall by over 60 per cent in just 10 years,” CEO Rolf Martin Schmitz stated.
RWE will receive €2.6bn ($2.9bn, £2.2bn) in compensation from the German government over the next 15 years, to soften the blow to its business. The company says this is below its own €3.5bn estimate, even of excluding lost profits.
The company said it is standing by coal as a business unit, is not considering a sale and is not seeing an impact on its planned 2019 dividend.
Shares in the group were still up 1.3 per cent at this afternoon January 16, the second-biggest gainer among German blue-chips, having earlier touched their highest level since September 2014.
In an effort to meet climate protection targets under international and European rules, Germany has decided to stop using coal for energy generation and shut down all of its coal-fired power plants by 2038 at the latest.
The German government will give at least €40bn in aid to regions affected by the phase-out.
In December it was stated that a law to compensate utilities for phasing out power in Germany will not be approved by the German cabinet by the end of 2019 and that ministries were still coordinating on the law.