Slovenia Advances Plan for Velenje Coal Mine Closure by 2033

Government Initiates Draft Act for Mine Closure

The Slovenian government has commenced discussions on a draft act outlining the gradual closure of the Velenje coal mine and the subsequent liquidation of its operator, Premogovnik Velenje. This legislative initiative is a crucial component of Slovenia's national strategy to phase out coal use, with a target completion date of 2033. The plan aligns the country with broader European climate neutrality goals and its commitment to achieving net-zero emissions by 2050.

The draft bill envisions a period of parallel coal production and closure activities until 2033. This approach is designed to facilitate a gradual reduction in the workforce and ensure the continued supply of heat for residents in the Saleska Valley. Following the cessation of coal extraction, closure-related tasks, including environmental remediation, asset divestment, and site rehabilitation, are projected to continue until 2045.

Financial Commitments and Economic Context

The implementation of the closure law will be supported by substantial financial commitments. The Slovenian state budget is set to allocate over 1.1 billion euros through 2045, averaging approximately 50 million euros annually. Additional funding is expected to be generated from the mine's ongoing operations and the divestment of its assets.

Premogovnik Velenje has faced financial challenges in recent years, reporting a net loss of 816,055 euro in 2024, an improvement from a net loss of 5.7 million euro in 2023. Coal production at the mine also saw a decline, totaling 2,169,201 tonnes in 2024, down from 2,439,539 tonnes in 2023.

Just Transition and Regional Development

A central aspect of the closure plan is ensuring a 'just transition' for the affected communities and workers. The draft act includes provisions for employee retirement and severance packages, as well as various social measures. The European Union's Just Transition Fund (JTF) plays a significant role, providing substantial financial support for the restructuring of coal regions. For instance, 248.38 million euros are earmarked for the Savinjska-Šaleška and Zasavje regions over two years, with 188.98 million euros specifically planned for the Savinjsko-Šaleška region between 2021 and 2027.

These funds are being directed towards projects aimed at diversifying the regional economy, creating new employment opportunities, and supporting retraining programs for workers. The city of Velenje itself has demonstrated a strong commitment to this transition, aiming to become climate-neutral by 2030 and participating in the EU Climate-neutral and Smart Cities Mission.

Impact on Šoštanj Thermal Power Plant

The Velenje coal mine is the primary supplier of lignite to the Šoštanj Thermal Power Plant (TEŠ), Slovenia's sole remaining coal-fired power plant. TEŠ has experienced financial difficulties due to high carbon allowance costs and market uncompetitiveness. The government has intervened with EUR 403 million to prevent the bankruptcy of TEŠ and Premogovnik Velenje, taking over both entities from the state-owned power utility Holding Slovenske Elektrarne (HSE). TEŠ's operational focus has shifted, with its main unit now primarily supplying heat, and electricity generation serving as a byproduct.