The German government has set deadline of 2038 to close the last of the country's coal power plants, in the latest bid to cut carbon emissions.
Finance Minister Olaf Scholz unveiled a €4.35 billion package on Thursday to compensate plant owners for loss for earnings – but was criticised by environmentalists for being too timid.
That bail-out for polluters comes on top of a previously agreed €40 billion in payments to regions to help soften the impact of the transition away form fossil fuels.
The shut-down agreement came after negotiations between the federal government, Germany's states, and industry.
The plan also keeps open the possibility of ending coal power generation in 2035, with reviews to be carried out in 2026 and 2029 as to the feasibility of an early exit.
Economy Minister Peter Altmaier, from Angela Merkel's CDU party said: “What we have here is a good agreement for climate protection because it makes clear that we mean it seriously."
But environmentalists criticised the approach and noted that it would see a new coal plant, Datteln 4, come online later this year, and even allow for the expansion of an open cast mine elsewhere in the country.
“Australia’s forests are burning, millions of people are demonstrating for climate protection and the German government is clearing the way for a new coal power plant,” said Martin Kaiser Greenpeace Germany's director.
“Nothing shows more clearly than Datteln 4 that this government can’t find an answer to the climate crisis.”
Shares in utility companies set to benefit from the cash rose sharply by 2 per cent on news of the deal.
Coal is still the largest source of energy in Germany, though usage has been falling in recent years.
A planned phase-out of nuclear power plants in the country by 2022 has left the country searching for alternative energy sources.
Renewables have been growing steadily and accounted for around 38 per cent of electricity generation in 2017.
Climate change is very high on the political agenda in Germany, while the country's Green party challenging the centre-right CDU for first place in the polls.
But like many countries, Germany has been criticised for sometimes being too slow to act. Ministers this week said they would not consider contributing more to the EU budget to fund the European Commission's plan for a continent-wide Green Deal.
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