Can future of the coal industry in Ukraine be similar to German one?

Can future of the coal industry in Ukraine be similar to German one?

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Members of the Parliament from the Committee on Fuel and Energy sector, Nuclear Policy and Nuclear Safety of Verkhovna Rada of Ukraine, mayors of single-industry coal cities, jpurnalists, representatives of the Ministry of Energy and Coal Industry of Ukraine and civil society took part in the study visit to Germany on "Perspectives of development beyond coal." 

During the week from the 3rd to 7th of July 2017 the participants visited Berlin, Essen, Düsseldorf and Bottrop, became familiar with the concept of German Energy Transition (Energiewende), met different experts and politicians and visited some interesting from an energy perspective facilities .

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The visit began with a review of the German Energy Transition, during which Germany almost abandoned hard coal mining (the last mine will close in 2018), is considering reducing brown coal and is actively developing renewable energy.

The main questions from participants were concerning how to provide new jobs while replacing the coal industry, taking into account the cultural identity of miners, whether privatization is a way out, how to organize the work with the staff and the public mining regions, how to provide a decent standard of living while preserving the environment and improving health, which forms of energy should replace the share of coal in the energy balance, and more.

The experience of structural transformation of the coal regions in Germany which was presented by Timon Wehnert, deputy director of the Berlin office of the Institute for Climate, Environment and Energy in Wuppertal, in this context, is very relevant. For example, over the past 60 years  the share of service workers in the coal region of the Ruhr has considerably increased, and the proportion of workers under coal industry has decreased. Number of people working in coal mining in Germany is currently 21,000, while only one company DTEK "Pavlogradcoal" in the Dnipropetrovsk region has 23 800 people. Also in North Rhine-Westphalia region in Western Germany there are examples of appropriate conversion of mines into touristically attractive sites, creating jobs in renewable energy and economic clusters.

The second day of the study tour began with meeting Nick Reimer, a journalist, social activist and former employee of the coal industry, who told about the restructuration of the industrial regions in Eastern Germany. Based on the example of different approaches for implementing change, he showed that the success of the reform of social and economic structures requires a clear plan of making changes based on the dialogue between grassroot community initiatives, workers in the sector which will be restructured and the government. A good example of this process in Germany is the decision planned 5 years ago to cease production of coal in Germany. Thus, the last mine in Bottrop will be closed in 2018, and its power is considered as a platform for creating hydro accumulative power station. At the same time a special fund was set up, which task is to monitor the restructuring process.

Also, the conclusions which can be drawn is that in order to ensure effective work with communities successful examples of restructuring are need to be created and displayed elsewhere to show people an alternative. It should also be remembered that the question of coal industry workers’ identity is often related to the sphere of their employment. That is why it is hard to advocate cutting down coal industry, because for them it would mean rejecting a part of their identity. So it is important to think about what can be offered as a replacement, for example, maintaining jobs in the energy sector through the development of renewable energy in the region (Germany currently employs about 330 thousand people in RES) or maintaining industrial facilities as cultural heritage.

Another important aspect is education. Very often in highly industrialized areas higher and professional education is focused on training specialists in inherent in this region forms of industry. That is why we should take care not only of the reorientation of existing workers in the coal industry, but also of the conversion of educational institutions so that they ceased to teach workers of those industries that are scheduled to roll.

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The last item of the second day program was a meeting with Mr. Oliver Krischer, deputy of the Bundestag, deputy head of the Alliance 90/Greens. One important aspect which was discussed was the question of political support for the transition to renewable energy. Although different political parties in Germany see different ways for this transformation, the aim to move to 100% renewable energy until 2050 has a majority support, as it is necessary to achieve the objectives of the Paris climate agreement. Its’ implementation is taken very seriously in Germany.

The third day of the trip began with a meeting in the Ministry of Economy, Innovation, Digitalization and Energy of North Rhine-Westphalia. During the meeting it was stressed that the restructuring of the highly industrialized regions has begun already in 1957. Since then, the number of employees of the coal industry in the region decreased by 99% and the number of coal mines decreased from 157 to 2.

To ensure the development of the region at the federal and regional levels, it was decided to finance a special program in the amount of 2.4 billion euros (50% from the federal budget and private funds, 50% from the EU), of which 15% is aimed at small and medium enterprises, 40% for research and educational projects, 25% for the reduction of greenhouse gases and the last 20% is meant for urban and infrastructure development.

Although during this time there was done a lot effort in order to align the level of income compared to other regions, the land of North Rhine-Westphalia is remaining a recipient. This shows how reliance on coal makes the region dependent and not competitive. For example, the unemployment rate in the Ruhr region is 10.4%, which is higher than the average in North Rhine-Westphalia (7.6%) and Germany as a whole (5.9%). The level of foreign investment is also lower compared with the region as a whole. Therefore, it is important to realize that the sooner we begin to abandon coal, the more opportunities for other areas of economic development we will have.

So, realizing all these aspects, the management of North Rhine-Westphalia decided to implement a social program aimed at retraining. Land Ministry of Labor and Social Policy is creating special partnerships, working with employees of mines which are closed to provide them with decent compensation, free retraining or early retirement. Thus the land generally increased level of investment attractiveness, as there is a large amount of skilled workforce and the unemployment rate is reducing by an average of 0.3-0.4% from year to year.

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On this day, members and participants also visited the station with wastewater treatment, which produces 85% of the energy it needs. Enterprise Emschergenossenschaft Kläranlage Bottrop is located in the city of Bottrop and serves about 2.6 mln. people. There is also a private mini solar station and a windmill, but mainly company provides itself with energy through biogas cogeneration and sludge incineration.

The founders of this firm are municipal (80%), mining (12%) and other (8%) companies that use the services of water cleaning. Due to this structure, similar to the cooperative, and because water treatment plants operate within a larger structure with water management (management company has 50 sewage treatment plants, 350 pumping stations, over 350 km. of sewer channels), which is also non-profit, all funds are returned to the system and promote the development of water management in the region. So, while building a system of purification of water, the Emscher river, which for many years serves as an open sewer in the Ruhr region, is being renewed. In one part of the river it is already allowed to fish.

On the last day of the trip participants visited the former mine, which is now a museum and UNESCO cultural heritage site, RAG Foundation, and discussed the prospects of the coal industry in Ukraine. RAG Foundation is an organization founded by a joint-stock company, which includes all coal mines of the Ruhr region. The objective of the Fund is to provide decent social conditions for workers in the sector and also training and retraining workers. From 2019 after the closure of the last coal mine RAG Foundation will ensure reclamation of disturbed areas,  pumping and cleaning mine water as well as all polder work in the region. The Foundation was created in 2007 on the initiative of the federal government. It is now responsible for funding and implementation of social programs (subsidies, early pensions, retraining workers) and implementation of measures to protect the environment. RAG Foundation operates as a nonprofit organization, but owns a number of companies, which revenues are used to finance the above activities.

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Another significant event of the study tour was a visit to the Zollverein mine-museum, which until closure in 1986 was one of the largest and most productive mines of the Ruhr region. At the time of mine closure fewer workers were employed in the mine than today in the museum, which is also a good example of new alternative coal sector jobs (e.g., there is always a necessity to work on the restoration and conservation of objects, also the cultural center employs a staff for designing, marketing and all sorts of creative jobs). Saving mine as a museum is also symbolic for communication between generations of miners who still remember the heyday of the coal industry, and young people who have very different priorities for the region’s development and is focused on innovative high-tech service economy. Thus, Zollverein museum helps residents to go through the process of transformation of the cultural identity of the inhabitants in the region less painfully. Approximately 1.5 million guests from around the world visit the facility annually, which adds to the tourism development of the Ruhr region as a whole.

At the end participants discussed prospects of Ukraine's coal industry in the future and tried to formulate recommendations on how you can contribute to a more systematic social and economic transformation during the reduction of coal production in Ukraine, which takes place during the last years. The necessary steps towards this is to establish a dialogue between the government, the coal industry, trade unions, consumers of coal and inhabitants of the coal region to begin public discussion of problems and possible solutions, as well as creating economic alternatives in these regions.

 

Oksana Aliieva, coordinator of the program "Climate change and energy policy,"
Heinrich Boell Foundation Regional Office in Ukraine

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