Swedish state-owned energy utility Vattenfall is in the focus of a study released Thursday by the German Institute for Economic Research (DIW). The survey of the firm's lignite mining activities in eastern Germany had been commissioned by the environmental pressure group Greenpeace in a bid to question Vattenfall's mining business model in the region.

And the DIW's report delivered just that, speaking of the Swedish company's "risky business" that lacked sustainability and a sound future.

The Berlin-based think tank admits that lignite mining in Germany's Lusatia region is still profitable for Vattenfall, but only because the environmental and health damage caused by coal mining are not yet reflected in the electricity price.

Environmental footprint

The study maintains that with over 70 of a total 88 million tons, Vattenfall's German carbon dioxide emissions surpass the company's CO2 budget of 65 million tons in 2020, while the firms Scandinavian power generation structure already largely corresponds to its CO2 emission targets.

The report concludes that phasing out lignite is essential for Vattenfall to meet its environmental aspirations, all the more so since the previous hope of "clean coal" raised by the CO2 capture, transport and storage technology (CCTS) has failed to win local support and is no longer an option in the foreseeable future.

The study also sees Vattenfall's coal operations in Germany in stark contrast to the country's energy transition program under which greenhouse gas emissions are to be reduced by at least 80 percent by 2050 (baseline: 1990).

hg/cjc (dpa, Greenpeace)