London — Germany's finance, environment and economy/energy ministries have agreed to controversial details on the country's coal exit law expected to pass cabinet next Wednesday, an environment ministry (BMU) official said Monday.
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The draft is to include details of how EU carbon allowances linked to closures are to be cancelled, with a first review in 2021, a BMU spokesman told S&P Global Platts.
This confirmed comments made by BMU state secretary Jochen Flasbarth Monday at the COP25 conference in Madrid.
Cancellations of certificates linked to coal closures would only take effect after the impact of the Market Stability Reserve had been taken into account, Flasbarth told German news agency DPA.
The MSR mechanism can cut up to 24% of the annual surplus in allowances until a threshold (833 million mt) is reached.
The minister expected a final draft to be passed by cabinet next Wednesday.
A draft dated November 11 did not include a mechanism for carbon allowance cancellation, a BMWi spokeswoman saying November 12 this would only be reviewed in 2022.
Earlier drafts have detailed plans to close hard-coal plants through annual auctions, with a first auction of 4GW of compensated closures planned for 2020.
In January, Germany's coal commission recommended to cap hard-coal and lignite coal capacity at 15 GW each by 2022, requiring the closure of 3 GW of lignite capacity with a first wave focused on RWE's plants in the Rhenisch mining area in order to halt clearance of the Hambach forest.
Flasbarth said it was unlikely the law would prevent start-up next year of Uniper's new 1.1 GW Datteln 4 coal plant.
Uniper plans first grid connection for the Eur1.5 billion project in January with commissioning scheduled for summer 2020.
Flasbarth, meanwhile, confirmed that rules on the distance of wind turbines from housing have been taken out ofthe draft, with the political debate more complex than envisaged.
German environment minister Svenja Schulze is set to address the UN climate conference in Madrid on Tuesday with Germany's climate plans.
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