RWE AG, the utility whose coal-fired plants make it Europe’s largest carbon emitter, surged after Germany’s governing coalition agreed not to introduce a coal levy that had been discussed for months.
RWE jumped as much as 4.8 percent, the most since June 24, and traded up 4.2 percent at 20.155 euros at 10:25 a.m. in Frankfurt, making it the biggest gainer in Germany’s benchmark DAX index, followed by competitor EON SE, up 1.7 percent.
German Chancellor Angela Merkel, Economy Minister Sigmar Gabriel and Bavaria Prime Minister Horst Seehofer decided against a levy on lignite plants, the Economy Ministry said in a statement Thursday.
They agreed to cut the power industry’s C02 emissions by 22 million metric tons by 2020 through an alternative plan.
Half of the reductions will come from idling 2.7 gigawatts of lignite plant capacity, it said. Four million tons will come from combined heat and power plants, and 5.5 million tons from energy-efficiency measures. The lignite industry committed to cut emissions by an additional 1.5 million tons from 2018, if needed, to reach the 2020 target. This will help Germany reach its goal to reduce CO2 emissions by 40 percent by the end of the decade from 1990.
RWE has said the introduction of a coal levy would result in closing 17 of its 20 lignite plants and two of its three open-cast mines. The Essen-based company declined to comment immediately on the coalition’s agreement.