ČEZ to stop mining brown coal in Northern Bohemia by 2038

The Northern Bohemian brown coal mines belonging to the majority state-owned Czech energy conglomerate ČEZ will stop mining activity by 2038 at the latest, ČEZ Group Chief Financial Officer Martin Novák said on Tuesday. The original deadline counted on mining operations ceasing by 2050.

Brown coal mining on Czech territory will become unprofitable once it is no longer possible to use inside the country, Martin Novák told the Czech News Agency. This is because brown coal is not an internationally traded commodity like black coal and transporting it to other markets is not economically feasible.

The news of ČEZ moving its deadline comes more than half a year after the Czech Republic’s Coal Commission recommended that the commodity be phased out of energy production by 2038. The Czech government has since taken the advice into consideration, but without setting up a definitive deadline. Meanwhile, the European Union has been pushing strongly for increasing the share of renewable sources in energy consumption.

In ČEZ‘s Vision 2030 strategy, which was published this May, the company announced plans to reduce coal energy production to just 12.5 percent of its total generated power by the end of the next decade. At the same time, ČEZ intends to expand its capacity of emission-free sources to 6,000 MW by 2030.

In the first half of 2021, the energy conglomerate’s net profit fell by 89 percent year-on-year. Adjusted for extraordinary effects, such as provisions, this is a fall by 31 percent (CZK 11.3 billion). The decline in net profit was partly due to deteriorating market conditions for coal energy, according to ČEZ.

ČEZ has been reducing its coal power segment over the past decades, shutting down nearly 2,000 MW of coal power plant capacity during the 1990s. A further 1,000 MW have been shut down over the past year and a half. At the same time, ČEZ’s portfolio of renewable sources currently accounts for 1,700 MW, the energy producer states on its website.