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EU Commission allows billions for coal exit from German energy company Leag

by AI | 20.Nov 2025 | Europe in brief AI

Energy companies like Leag receive billions from the state to exit coal. Is that compliant with competition rules? Yes, ruled the EU Commission.

The EU Commission already allowed compensation payments of 2.6 billion euros to RWE in 2023. Photo: Patrick Pleul/dpa

Brussels (dpa) – The German government is allowed to compensate the energy company Leag with a sum in the billions for its exit from coal. The EU Commission sees no violation of EU state aid rules in the funding of up to 1.75 billion euros, as the authority in Brussels announced. Two years ago, it had already approved a similar payment to RWE. 

The aid compensates for the premature shutdown of lignite power plants, according to the Commission. Germany had registered the planned compensation with the Commission in 2021. As early as 2024, the Federal Ministry of Economics had announced that the Commission would approve the aid. The German Minister of Economics Katherina Reiche spoke of good news from Brussels. 

1.2 billion for fixed costs

Specifically, it concerns 1.2 billion euros in “fixed costs” for the follow-up costs of open-pit mining – primarily recultivation costs – as well as social costs such as social agreements. This happens regardless of when Leag (Lausitz Energie Kraftwerke AG) actually exits coal-fired power generation. The remainder of up to 550 million euros is, according to the Ministry of Economics, tied to conditions starting from 2024. 

This will be taken into account when it is confirmed that the power plants of Leag would have been economically viable even beyond the shutdown dates specified in the law for ending coal-fired power generation, and thus Leag would miss out on profits due to the statutory exit regulation.

“The payment finally brings security for the employees,” said Brandenburg’s Prime Minister Dietmar Woidke. For the company and the entire region, there is now planning security, emphasized his Saxon counterpart Michael Kretschmer. Leag CEO Adi Roesch stated that the compensation provides investment flexibility to offer new perspectives to employees affected by the coal exit.

Measure proportionate

The EU Commission concluded that the measure is appropriate and proportionate and is limited to the necessary minimum. If a country in the EU wants to support companies with state money, it must adhere to strict rules. The EU Commission oversees compliance. 

In total, the state aid amounts to 4.35 billion euros for two operators. In 2023, the Commission already approved 2.6 billion euros for the RWE lignite plants in the Rhineland. (November 18)