Who is Michael Kretschmer and why does his view matter now?

Michael Kretschmer is Saxony’s minister president. His view matters because Germany’s gas storage sits near 32%, with a risk of dropping below 15% by end March. He pushes a CO2 price pause on lignite and more coal dispatch to secure supply, which could influence power prices and carbon sentiment.

How could a CO2 price pause affect German power prices?

Pausing the CO2 charge on domestic lignite would cut variable costs at those plants. That could shift the merit order away from gas and lower day ahead and near curve baseload prices. The impact depends on wind output, interconnector flows, and weather driven demand into late March.

Does this change EU carbon market rules?

No. A national pause would not rewrite the EU ETS. If lignite runs more, utilities may need extra EUAs, which is bullish. Yet policy uncertainty and weather can cap moves. Traders will track auctions, industrial demand, and headlines around Michael Kretschmer’s proposal for near term direction.

What does this mean for LNG vs coal in Germany?

If more lignite displaces gas in power, Germany could need fewer spot LNG cargoes, easing prompt TTF if weather cooperates. That is sensitive to cold snaps and outages. The LNG vs coal balance remains a winter lever, not a structural shift, unless policy support extends beyond the heating season.

Global Market Insights

Germany Energy: Kretschmer Backs Lignite, CO2 Pause — February 08

ByDanny Kontos February 8, 2026February 8, 2026

Michael Kretschmer is calling for a temporary CO2 price pause on domestic lignite and a shift toward coal over costly LNG. With German gas storage near 32% and a risk of falling below 15% by end March, the debate is urgent. We explain what this means for Germany energy policy, power prices, EU carbon sentiment, and LNG vs coal procurement. Investors should watch policy signals, weather, and plant availability as near term drivers for German power and gas markets.