Germany: Transitional support for waste wood power plants

Energy recovery in Germany

In Germany, more than 6.5 million tonnes of waste wood are used as fuel in 74 waste wood power plants every year. Almost all plants are subsidised. From 01.01.2021, the 20-year subsidy for the first 10 waste wood power plants will end. By 31.12.2026, 93 percent of the plants or 96 percent of the quantities will be phased out of the subsidy. The phase-out will take place with a time lag. Market distortions are to be feared.

Amendment to the Renewable Energies Act

We are very pleased that our demanded phase-out support by 31.12.2026 has been implemented. The EEG 2021, which was finally passed today in the German Bundestag, implements the “market integration model for waste wood power plants” proposed by us from 1 January 2021. The new regulation in the EEG 2021 helps us to transfer the plant stock into a subsidy-free post-EEG phase. The energy recovery of waste wood with its important disposal function for wood waste in Germany is secured, market turbulence and disposal bottlenecks are avoided from today’s perspective. In addition, important capacities for the energy turnaround in general and the heat turnaround in particular are preserved for our national economy.

Funding in detail

In order to transition the plants into a post-EEG era, the funding period will be extended until 31.12.2026. In 2021 and 2022, the previous subsidy rate for the respective plant will be maintained. From 01.01.2023, the subsidy rate will be reduced linearly by 20 percent annually. On 01.01.2027, when 93 percent of the installations or 96 percent of the quantities have been removed from the subsidy, the transitional subsidy will end completely. Installations that continue to receive support beyond 2027 are not affected by the transitional regime.

The detailed regulation can be found EEG 2021 §101 Regelung Altholzanlagen.