Why is Michael Kretschmer comparing LNG and lignite?

Michael Kretschmer argues that when methane leakage and logistics are counted, LNG’s climate impact looks close to lignite. He says LNG also raises costs and import dependence. The comparison aims to justify more lignite use and a pause in the CO2 price on brown coal to cut power costs and secure supply.

Could this lower German power prices?

If lignite runs more and faces a lower effective carbon cost, wholesale prices could ease during tight hours. Gas plants might set the price less often. Effects depend on fuel costs, carbon rules, and weather. Any policy change would also affect utility hedges, plant maintenance plans, and forward curves.

What does a CO2 price suspension mean for investors?

It would weaken the price signal that guides capital toward low-carbon assets. Coal generators could gain margin, while gas and some renewables might see lower capture rates. It could also face legal and EU challenges, adding policy risk. Investors should price in timing, scope, and the chance of reversal.

What should investors watch next?

Watch federal ministry statements, coalition committee notes, and EU reactions. Follow utility updates on fleet scheduling and hedges, plus movements in EU ETS prices and German forward power. Local media and court commentary can offer early clues on whether Michael Kretschmer’s ideas gain real policy momentum.

Global Market Insights

Germany Energy Policy, February 7: Kretschmer Backs Lignite Over LNG

ByHuzaifa Zahoor February 7, 2026February 7, 2026

Michael Kretschmer has reignited the energy debate in Germany. The Saxony premier argues lignite should run harder and that the CO2 price on brown coal should be suspended. He says imported LNG has a similar climate impact but raises costs and dependence. For investors, this could shift German energy policy, change the generation mix, and move carbon signals that guide capital. We explain what this means for prices, utilities, and policy risks in the months ahead.