Germany and Italy May Turn Back to Coal

Written by Martin Lynch, European News Editor for IIR News Intelligence (Sugar Land, Texas)

Summary

Germany and Italy have both signalled that keeping coal-fired power for longer may be necessary as the war in Iran increasingly disrupts global fuel supplies.

Phase-Out Plans Unrealistic

Germany and Italy are planning to keep coal-fired power for longer as a way to deal with the fuel crisis gripping Europe. 

It flies in the face of their stated goals under European Union (EU) climate law to phase out coal from the electricity mix within a decade. Speaking at a conference in Frankfurt, German Chancellor Friedrich Merz said the country had to evaluate all options to deal with the ongoing energy crisis stemming from the recent bombing of Iran by the U.S. and Israel.

"If the energy crisis continues and there is in fact a shortage, we may even have to keep existing coal-fired power plants in operation for a longer period," he said. "We have to supply this country with electricity. I am not prepared to put the core of our industry at risk just because we have decided on phase-out plans that have become unrealistic."

Germany has a stated target of exiting coal-fired power by 2038, previously 2030. In the first half of 2025, coal was the second most important energy source for domestic electricity generation accounting for 22.7%, behind wind energy at 27.2%, according to the Federal Statistical Office.

New Gas-Fired Power

Speaking of other options, Merz said in the short-term there are few that are viable: "Technically, the three decommissioned nuclear power plants which were shut down on April 15, 2023, cannot be brought back online. That's what the operators tell us, and if we want to decide on it today, it would take five to 10 years. We don't have that time. We are conducting research in fusion technology, and we have the ambition to put the world's first large fusion plant online in Germany...We are very far advanced. But this is something for the longer term."

He continued: "We now need to ensure that we can achieve baseload electricity generation in the short term and that's why we have applied for and received in Brussels for baseload capable gas-fired power plants and unlike the previous coalition we will build them in the old locations, we will put them into operation with the existing networks and we will not make them hydrogen-capable immediately. We now need to quickly move into the construction of gas-fired power plants." Industrial Info is tracking 12 gas-fired projects in Germany worth US$6 billion. Subscribers to Industrial Info's Global Market Intelligence (GMI) Project Database can click here for the reports.  

Italy Puts Coal on Standby

Italy was supposed to have phased out coal-fired power by the end of 2025 but has now voted to push that deadline out by more than a decade to 2038. Legislation before parliament, which was part of an approved controversial bill to lower energy costs for consumers and businesses, will allow for some coal plants to be on standby beyond 2025 in case of emergencies. It wants the plants classed as 'strategic assets' to make them exempt from EU state-aid rules so that the government can pay the operators for keeping them idling. For additional information, see March 9, 2026, article - Italy's Energy Decree Threatens EU Power Market. Coal supplied less than 2% of overall power in 2025 - down 13.5% on 2024.

Speaking to TgCom24, Minister Gilberto Pichetto Fratin said the country "has coal-powered stations that I wouldn't like to re-activate, but they are there in reserve to safeguard our country. We have the highest [gas] storage levels in Europe, we have diversified sources, and therefore we can say there is not an extremely severe situation regarding the quantities of resources, and I am speaking mainly about gas." Italy, which is heavily reliant on gas-fired power, has the highest gas storage levels in Europe right now at over 47%, well above the 30% recommended by the European Commission. The region has seen its gas storage levels drop worryingly low in recent months. For additional information, see March 30, 2026, article - Europe Calls To Fill Gas Storage Early.

Reaction

"Backward-looking" was how Beatrice Petrovich, senior energy analyst at energy think tank Ember, described the legislation.

"A worryingly backward-looking political signal: Yesterday, Italy's parliament voted to delay the closure of the country's last four coal-fired power stations by over a decade - pushing the coal phase-out back from 2025 to 2038 on "energy security" grounds," she said. "Any security gain is far from guaranteed. Yet, including an old and largely non-operational coal fleet in the energy security toolkit risks being an additional burden on Italy's electricity consumers, who already pay some of the highest electricity prices in the EU."

She continued: "​Coal plays a minor role in Italy's power mix, and this won't change going forward. However, by delaying the phase-out of Italy's last four coal plants by over a decade, the government risks sending the message that protecting old coal power plants matters more than driving much-needed innovation in the energy sector."

Key Takeaways 

• Germany and Italy look to coal-fired power in the energy crisis.
• Both countries are looking to extend the phase-out times, with Italy voting to push the end of coal out to 2038.
• Germany wants to accelerate the building to gas-fired plants - Industrial Info is tracking 12 active gas-fired projects worth US$6 billion.

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