DUESSELDORF, Germany (Reuters) - German utility RWE (RWEG.DE) on Friday said a court ruling which delays its ability to mine brown coal in Hambach, Germany will result in a more than 100 million euro fall in operating profit for its Lignite & Nuclear division in 2019.
A German court told RWE (RWEG.DE) that it could not start logging in an ancient forest until a separate court had reviewed environmental claims, potentially delaying the start of lignite mining in the area until after 2020.
“As a result, as of 2019, the earnings before interest taxes depreciation and amortisation (EBITDA) of the segment Lignite & Nuclear will be negatively affected in the range of a low three digit million euro amount per year,” RWE said on Friday.
The utility giant, one of Europe’s largest carbon dioxide emitters, has drawn heavy criticism from environmentalists over the planned clearing of the Hambach forest that it bought decades ago to expand mining in the area, located in North Rhine-Westphalia.
Germany aims to raise wind and solar power’s share of energy generation from a third now to 65 percent by 2030 to help to cut carbon dioxide emissions and achieve its climate commitments, as Europe’s largest economy works on ways to phase out its coal-fired power plants.
RWE has said it would lose as much as 5 billion euros ($5.75 billion) if it could not continue to mine lignite by removing the last bit of the ancient Hambach forest..
The administrative state court in Muenster said that RWE could continue to mine lignite as long as it does not use forested areas in Hambach.
But it said RWE may not start logging until a separate court in Cologne has ruled on environmental group BUND’s suit against the company’s plans for the mine.
The case entails several hundred pages of correspondence and dozens of boxes of documents, which means it will take some time to decide, the Muenster court said in its statement, adding that RWE had failed to make its case that it was necessary to start logging quickly.
RWE had planned to start clearing the forest in mid-October, but a spokeswoman for the Cologne court said a decision was unlikely within a few weeks.
A spokesman for BUND told Reuters that he did not expect a decision until at least April of next year.
Controversy over the project came to a head in September, when riot police cleared environmental activists from treehouses in the forest, dismantling a protest camp set up five years ago to block a coal mining project.
RWE had no immediate comment on the court ruling.
In January, in its core markets Germany, Britain, Belgium and the Netherlands, RWE operated nearly 19 gigawatt of hard coal- and lignite-fired power plants, about 47 percent of its total generation capacity.
Shares in RWE fell as much as 4.7 percent to 19.48 euros on Friday, reaching their lowest level since early July. Germany’s blue-chip DAX index was 0.8 percent lower.
Writing by Tom Sims, Caroline Copley and Edward Taylor; Editing by Edward Taylor and Elaine Hardcastle