The European Commission approved compensation worth €2.6 billion ($2.8 billion) by the German government for energy provider RWE for the early closure of coal-fired power plants.
An investigation has proven that the payments are in line with the European Union's state aid rules, the commission said in a statement.
By supporting the phase-out of lignite-fired power plants, the compensation would contribute to the decarbonisation of the economy in line with the EU's objective of becoming carbon neutral by 2050, the commission wrote.
Germany is to phase-out electricity generated from coal by 2038.
To encourage the early close of lignite mines, Berlin plans to pay operators billions in compensation.
Next to the €2.6 billion earmarked for RWE for the closure of coal pits in the Rhineland, energy company LEAG can hope for €1.75 billion to close its operations in the Lausitz region.
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