Vattenfall to sell brown coal operations in Germany

1:09 min

Swedish state-owned energy company Vattenfall has signed an agreemnt to sell its lignite operations to Czech energy company EPH, along with PPF Investments, Vattenfall announced on Monday.

The controversial deal is still subject to the approval of the Swedish government.

"The divestment represents a major step in Vattenfall’s shift towards more sustainable production," the press release stated.

The sale comes at a price for Vattenfall, which estimates that it will mean a SEK 22-27 billion drop in profits.

“We want to reduce our CO2 exposure, so for us this is the right thing to do and it frees up resources to focus more on renewable energy," Magnus Hall, the company's President and CEO, was quoted as saying in the press release.

He also said, "the sale means more than 75 percent of our production will be climate neutral compared to about 50 percent today."

According to the press release, "the sale includes all of Vattenfall’s lignite assets in Germany. Those are power plants Jänschwalde, Boxberg, Schwarze Pumpe and Vattenfall’s 50 percent stake in Lippendorf, as well as the open cast mines Jänschwalde, Nochten, Welzow-Süd and Reichwalde and the recently closed mine Cottbus Nord."

The Greens, who are the smaller party in the ruling government coalition, have not wanted Vattenfall to sell off the brown coal operations because of their effect on the environment. Instead, they have wanted the operations to be phased out, but in an interview with Swedish Radio News in September of last year, Åsa Romson (Green Party), Minister for the Environment, indicated there was little chance they would be able to stop a sale.

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