German ministry softens CO2 emission demands for power plants

By Markus Wacket BERLIN (Reuters) - Germany plans to force coal-fired power plant operators to reduce their CO2 emissions by 2020 by less than previously planned, according to an economy ministry document seen by Reuters on Monday, bowing to opposition from within the industry. Thousands of coal workers marched in Berlin last month to protest against plans to slap a levy on the oldest and most polluting power plants, which unions say could put 100,000 jobs at risk. The levy is aimed at forcing coal operators to slash their emissions and stop Germany from falling short of its target to cut greenhouse gases by 40 percent by 2020 compared to 1990 levels. But RWE, the country's largest power producer, warned the measure would lead to the immediate closure of its lignite-fired power plants. In an attempt to defuse the situation, the economy ministry now plans to require coal plant operators to cut their emissions by 16 million tonnes by 2020, compared with a previous target of at least 22 million tonnes, according to the document. Under the original proposal power plants older than 20 years were required to pay a penalty on CO2 emitted above a limit of seven million tonnes per gigawatt of installed capacity, with the oldest power plants receiving even lower exemptions. The new proposal has raised the amount of CO2 older power stations are able to emit before the penalties kick in. "Increasing the amount that is exempt by almost a third will significantly increase the profitability of older power stations," the document said. Generators E.ON and Vattenfall declined to comment. RWE was not immediately available for comment. The government now plans to achieve the remaining six million tonnes of CO2 emission cuts for the energy sector by promoting the use of more environmentally-friendly combined heat and power plants, government sources said. However the proposal is yet to be approved by the Chancellor's office and other ministries, they said. (Writing by Caroline Copley; Additional reporting by Tom Kaeckenhoff; Editing by Stephen Brown and Greg Mahlich)