D-EITI Reporting

Crude Oil

History

Crude oil has been industrially extracted in Germany for more than 150 years. The successful oil well in Wietze near Celle in 1858/59 is generally recognised as being one of the first in the world. Crude oil production in Germany peaked in 1968 with an annual production of around 8 million tonnes. Most of the crude oil reserves are in the North German Basin, primarily in Schleswig-Holstein and Lower Saxony.

Economic importance

With a share of around 36 % of primary energy consumption, crude oil is by far the most important energy source in Germany. In this context, fossil fuels with a share of about 78 % (2023) and 77 % (2024) generally account for a much larger share than renewable forms of energy (see also see also Effects of the Energy Transition and the Structural Change).¹ In 2023, domestic oil production amounted to around 2 % of Germany’s annual consumption and the share thus remained the same compared to the previous year. Germany is one of the world’s largest users of mineral oil, making it almost entirely dependent on importing crude oil and crude oil products. Crude oil imports fell to around 77 million tonnes in 2023. These imports in total were valued at about EUR €45 billion and came from 32 countries, with 59 % of the imported crude oil coming from the USA (14.2 million tonnes), Norway (13.8 million tonnes), Libya (8.8 million tonnes) and Kazakhstan (8.7 million tonnes) – all figures for 2023.² Until mid-2023, Russian crude oil was imported exclusively in the form of linefill (residual quantities in the Druzhba pipeline, about 0.2 million tonnes) and has since no longer played a role in the area of crude oil imports.³ Proven and potential crude oil reserves in Germany were estimated to be almost 23 million tonnes as of 1 January 2024. Germany produced about 1.6 million tonnes of crude oil in 2023.⁴ The country’s share of global oil production amounted to approx. 0.03 % in 2023. The value of crude oil produced in Germany in 2023 is estimated to be EUR 781 million, which represents 0.02 % of GDP. Crude oil accounted for around 5 % of the total value of natural resources produced in Germany in 2023.

In terms of economic significance, crude oil thus ranked third behind lignite and natural gas in the list of fossil energy resources produced in Germany and in seventh place out of all natural resources extracted nationwide. In a 2023 international comparison of crude oil-producing countries, Germany was in 57th place (1970: 26th place). At the end of 2023 (2024), 1,940 (1,644) persons were employed in oil production in Germany (see also Employment and Social Affairs).

Extraction

In 2023, 45 oil fields were in production in Germany. These fields extract oil by means of some 685 production wells in drilling installations (onshore) and production platforms (offshore). In 2023, the oil fields of Schleswig-Holstein and Lower Saxony yielded almost 90 % of the total German production. The remaining quantity was mainly produced in the Federal States of Rhineland-Palatinate and Bavaria, together with very low production levels in Hamburg, and Mecklenburg-Western Pomerania. The largest German crude oil field is the Heide-Mittelplate I field in the Schleswig-Holstein Wadden Sea (Wattenmeer) National Park. It has been developed since 1987 by a drilling and production platform and by oil well facilities on the mainland. This oil field accounted for about half of Germany’s total crude oil production in 2023. Information on exploration and production in the crude oil and natural gas sector is included annually in the report “Crude oil and natural gas in the FederalRepublic of Germany” of the State Office for Mining, Energy and Geology.

Uses

Crude oil is a fossil fuel and mainly used as fuel for vehicles and means of transport and for heating buildings. Over the last few years, oil has accounted for 93 % of energy consumption in the transport sector and has been used in the form of gasoline, diesel and aviation fuel.⁵ In 2023, 28.5 % of residential buildings in Germany were still heated with fuel oil, especially in rural areas without a connection to the gas grid. Crude oil is also used in the chemical industry in particular, for example in the production of plastics and dyes, foams, detergents, medicines, lubricants and cosmetics.

Lignite

History

As early as the 17th century in Germany, lignite was being produced as a replacement fuel for wood, which was becoming increasingly scarce. With increasing industrialisation and the development of new deposits, the 19th century saw an increase in lignite production from 170,000 tonnes in 1840 to 40 million tonnes in 1900. This trend continued unabated in the 20th century until production reached an all-time peak in 1985 with 433 million tonnes produced that year. Much of this increase in overall German lignite production was attributable to the East German lignite coalfields. Following German reunification, production of lignite in the East German lignite coalfields fell by 67 % between 1989 and 1994. Total German production fell from 410 million tonnes to 207 million tonnes during this period.

Economic importance

Lignite is still one of the most important sources of energy in Germany, accounting for a share of around 8.3 % of primary energy consumption. This is behind oil, natural gas and renewable energies and hard coal. Annual production in 2023 was around 102.2 million tonnes (2024: 91.9 million tonnes) and fell by 1.9 % compared with the previous year. Germany covers nearly 100 % of its lignite requirements from its domestic reserves. The value of the lignite extracted in Germany in 2023 amounted to EUR 2.03 billion. Lignite accounted for around 14 % of the total value of natural resources mined in Germany in 2023. This means that lignite was the fourth most important natural resource in Germany, in terms of the value of production. In 2023, Germany’s share of global lignite production was 9 %. Germany is Europe’s largest producer of lignite and the world’s third-largest producer¹ of soft lignite after China and Indonesia, but it is continuing to reduce lignite production in the context of the European climate targets, the compromise found by German society on the coal phase-out as a result of the Commission on “Growth, Structural Change and Employment” KWSB 2019 and the entry into force of the Act to Reduce and End Coal-Fired Power Generation (Kohleverstromungsbeendigungsgesetz – KVBG) in 2021 (see Effects of the Energy Transition and the Structural Change). Germany has the third largest reserves after Russia and Australia.² Reserves of lignite totalling 1.2 billion tonnes are accessible via developed and definitely planned open-cast mines. Additional reserves amount to around 34 billion tonnes.³ In 2023, exports of lignite and lignite products fell to around 0.75 million tonnes of SKE, i.e. around 17 % less than in the previous year. With the decline in lignite production in the wake of German reunification, the number of persons directly employed in lignite mining fell from 130,000 in 1990 to 6,630 in 2023 and to 5,797 in 2024 (exclusive of persons employed in coal-fired power stations) (see also Employment and Social Affairs).

Extraction

Lignite is extracted in three areas (the Rhenish, Lausitz and Central German coalfields), where mining is only carried out in open-cast mines today. In Germany, lignite was mined in ten (2024: nine) active opencast mines in 2023. The lignite deposits in the Rhenish coalfield are in the Lower Rhine Basin in the triangle between the cities of Aachen, Mönchengladbach and Cologne. The Lausitz lignite coalfield is a coalfield in south-east Brandenburg and north-east Saxony. The Central German lignite coalfield is generally assigned to Saxony-Anhalt as well as the north-western part of Saxony and the extreme eastern part of Thuringia.

Uses

Around 90% of the lignite Germany produces is used to generate electricity and district heating. Due to the lower energy and higher water content of soft lignite as compared to hard coal, the economic benefits of lignite result from the combination of the open-cast mine and power plant being near the location of the lignite deposits. Around 10 % of lignite produced is refined into solid or pulverised fuels for commercial use and private households (e.g. brown coal briquettes, pulverised lignite, fluidised bed lignite and lignite coke). Lignite contributes 17 % (2023) of gross electricity generation in Germany.

In addition to the mineral natural resources described in the following section (vii. Other natural resources), salts are industrial minerals. Industrial minerals are mineral resources that can be immediately used in industry due to their special chemical and physical properties, i.e. without any substance conversion. A distinction is made between rock salt, potash salts and magnesium salts.

History

The commissioning of the world’s first potash factory in Staßfurt in 1861 marked the beginning of what is now a 150-year tradition of German potash mining. The extraction of salt by solubilisation, i.e. by making it soluble using water injected via boreholes, or by mining in salt mines, has a long history. People were digging for salt in the Berchtesgaden area as early as the 12th century. In the 16th century a salt mine was built there which is still in operation today.

Economic importance

In 2023, the amount produced in Germany was approximately 12.5 million tonnes of rock salt (including industrial brine) and some 5.8 million tonnes of potash and potash salt products. This is roughly equivalent to a value of EUR 2.5 billion and it accounts for a 0.06 % share of GDP. Salts accounted for around 18 % of the total value of natural resources mined in Germany in 2023. This means that salts ranked 3rd among all natural resources mined in Germany in terms of economic importance behind the aggregates and natural gas. Domestic production covered 100 % of German requirements for salts (2023). With a total production of approx. 5 %, Germany was the fourth largest producer of salt in the world in 2023, after China, the USA and India, and also the fifth largest potash producer with around 5 % of the world’s total production. In 2023 (2024), a total of 8,398 (8,262) persons were directly employed in potash mining in Germany and a further 2,472 (2,584) were employed in salt mining. The estimated geological rock salt reserves in Germany amount to over 100 trillion tonnes. By comparison, geological potassium salt reserves are lower, with a converted potassium oxide content estimated at about 5 billion tonnes.¹

Extraction

Extraction takes place in Germany in five potash mines (in Hesse, and Thuringia), seven salt mines (in Baden-Wuerttemberg, Bavaria, Lower Saxony, North Rhine-Westphalia, Saxony-Anhalt and Thuringia), six salt works (in Baden-Wuerttemberg, Bavaria, Lower Saxony and North Rhine-Westphalia, and Saxony-Anhalt) and ten solubilisation facilities (in North Rhine-Westphalia, Schleswig-Holstein, Lower Saxony, Saxony-Anhalt and Thuringia), including one operation for the extraction of potash salts (Thuringia).²

Salt and potash mining is carried out in the mines by means of drilling, blasting or cutting techniques or by brining out underground deposits (solubilisation). Brining out is done by introducing freshwater or half-brine into the salt deposits through borehole probes, after which the salts dissolve. The brine is then pumped through a probe and processed above ground in salt works or specialised facilities, where it eventually becomes salt, potash salt and other products.

Uses

Rock salt and evaporated salt is used for commercial and industrial purposes as well as for food and de-icing. Salt is an indispensable natural resource for the chemical industry, e.g. in the production of soda, chlorine and caustic soda. Glass, plastic and aluminium could not be produced without salt. It is used as regenerating salt in water softening plants, in the feed industry, in road services, for snow clearing and in the food industry. Sodium chloride meets particularly high purity requirements as an active pharmaceutical ingredient.
The potash crude salts, which are mainly extracted by mining and to a lesser extent by brine, are mainly used as fertilisers in agriculture. However, they are also used as industrial salt in electrolysis and other industrial processes and are in demand in high-purity form the food and animal feed industry and for pharmaceutical purposes.

Quarried natural resources

Natural stone and earth materials include a variety of mineral resources, in particular gravel and sand, crushed natural stone, natural stone, limestone, marlstone and dolomite, gypsum and anhydrite stone as well as coarse ceramic clay and loam. Stone and earth are bulk raw materials; they are site-specific due to geological conditions and are not evenly distributed across the country.

History

Quarrying has been handed down since the beginning of human history. According to scientific findings, the oldest known “stones from human hands” originate from the 9th to the 8th millennium B.C., taken from ground fortifications in the Middle East. The extraction of quarried natural resources also has a very long tradition in Germany. In the past, these natural resources were mainly extracted by hand, but companies today use modern technology. Geophysics, GPS, intelligent machine and plant control and largely automated processes control the extraction of these natural resources.

Economic Importance

Every year, the building materials and quarrying industry extracts roughly 560 million tonnes of primary raw materials (excluding quartz sand and gravel, kaolin and fine ceramic clay; these natural resources are covered in the section on industrial minerals) or uses these materials in production. In 2023, gravel and sands with 232 million tonnes and broken natural stone with 203 million tonnes represented the largest share of natural resources in terms of quantity in the German extractive industry. The total value of quarried natural resources was around EUR 5.7 billion in 2023. Thus in 2023 almost 40 % of the total value of natural resources mined in Germany was attributed to quarried natural resources.

Germany meets its own requirements for quarried natural resources largely from reserves within the country. In 2023, the extraction of quarried natural resources amounted to 515 million tonnes. Quarried products are generally mined on a regional basis and are transported over short distances to the consumers. The reason for this is that the transport costs are relatively high compared to the value of the material. Accordingly, foreign trade plays mainly a role in areas adjacent to the border. The main customers are the countries which are Germany’s direct neighbours, e.g. the Netherlands, Switzerland and Belgium. In 2023 (2024), imports in terms of volume were approx. 14.5 (14.6) million tonnes valued at EUR 1.2 (EUR 1.2) billion. Exports in terms of volume were approx. 23.2 (21.6 million tonnes valued at EUR 0.9 (EUR 0.9) billion.¹ In 2023 (2024), the quarried natural resources sector (including Other mining) employed 37,777 (37,364) people in Germany who are subject to social insurance contributions (see also Employment and Social Affairs).

Extraction

Quarried natural resources are mined decentrally and, with just a few exceptions, are extracted in open-cast operations. According to the association, mass building materials such as gravel and sand or natural stones were produced in around 2,700 plants in 2023. A plant/location may include several production sites in Germany.² When extracting sand and gravel, a distinction is made between dry and wet extraction, depending on the groundwater situation, and these two scenarios require different production techniques. Nearly all quarried natural resources require processing and refinement before they are sent on for their intended use. As non-renewable natural resources, they are also site-bound because of their volumes.

Uses

Around 80% of the quarried materials are supplied directly to the building industry (e.g. civil engineering to build road bases and wearing courses, track ballast) or are initially processed by the building products sector into basic and building materials (e.g. cement, concrete, quick lime, mortar, insulation materials, tiles, bricks) and then supplied to the construction industry. The remaining approx. 20% are used in the chemical, steel or glass industries. In addition to the quarried quantities of primary earth and stone, approx. 100 million tonnes of secondary raw materials (mineral construction waste and by-products from industrial processes) are used in the building industry every year.³ These result from e.g. the demolition of buildings, the production of pig iron (blast furnace slag) or from electricity generation in conventional power stations (FGD gypsum, fly ash). The use of secondary raw materials contributes to the substitution of primary natural resources. The substitution rate is around 15 %.^4,5

In Germany, the extraction of natural resources is for example regulated by the Federal Mining Act (BBergG), which replaced the old mining law of the Federal States as well as numerous ancillary mining laws in 1982. The BBergG is complemented by various regulations on mining law matters. The Federal Ministry for Economic Affairs and Energy is responsible for mining law within the Federal Government. The mining authorities of the Federal States (see figure 1) implement the law and are responsible for approving and supervising mining activities, depending on the mineral resources. For certain natural resources not covered by the BBergG, some federal states have adopted their own regulations for these landowners’ natural resources in the so-called Excavation Law of the federal states.

With regard to their legal regulation, a distinction is made between three groups of natural resources in Germany (see figure 2):

• Free-to-mine natural resources are not the property of the landowner. The exploration and extraction of these mineral resources is subject to the BBergG and requires a two-stage application procedure: in the first step, the granting of a mining licence (public-law concession) and in the second step, the site-specific approval via the operating plan procedure, in each case by the competent mining authority of the affected federal state.
• Privately-owned natural resources are owned by the landowner and are subject to mining law (see Section 2(1) number 1 BBergG). The exploration and extraction of these mineral resources do not require a mining license, however they require approval in the operating plan procedure by the competent mining authorities of the affected federal state.
• Landowners’ natural resources are all natural resources that are not free-to-mine or privately-owned and are owned by the landowner. They are not subject to mining law and are therefore not supervised by the mining inspection authorities. Instead, the approval procedures with regard to the landowners’ natural resources are carried out in accordance with the provisions of the Federal Immission Control Act (BImSchG) or in accordance with provisions of state law (e.g. Excavation Laws, Water or Building Law, Nature Conservation Law).

Depending on the federal state, natural resource and type of extraction, middle and lower-management levels of governmental bodies are responsible for the latter group of landowners’ natural resources.

In Germany, the conditions under which natural resources are extracted are generally not negotiated directly between the extracting companies and the state authorities. The conditions for the exploration and extraction of mineral resources are laid down in generally applicable laws and are implemented by the relevant authorities. The procedures for the approval and supervision of raw material extraction projects in Germany are not regulated in the same way for all mineral resources. They vary depending on the natural resource type and its legal anchoring in the federal and state governments.

Mining licences

Mining licenses are the basis for exploring and extracting free-to-mine mineral resources. They are applied for in the form of a permit, license or proprietary mining rights. Under Section 22 BBergG, both the transfer of an existing mining licence and the participation of third parties in it are only permitted with the consent of the competent mining authority.

We can distinguish between three types of mining licenses:

Permit

The permit is a mining license that grants the right to explore free-to-mine natural resources in a particular licensed mining site. The permit is limited to a maximum of five years and can be extended by three years (see Section 16(4) BBergG). There is a legal entitlement to the granting of a permit, provided there are no grounds for refusal. The permit may be refused if, for example, no work programme is available or the specified period is not taken into account in the planning. The grounds for refusal are listed exhaustively in Section 11 BBergG. If for reasons for which the permit holder is responsible, exploration is not started within one year, the permit must be revoked (Section 18 BBergG).

License

The license is a mining license granting the right to explore and extract free-to-mine mineral resources in a particular licensed mining site. The license is granted for “a period of time appropriate for the completion of the extraction in the individual case”. Fifty years may only be exceeded if this is necessary in view of the investments normally required for the extraction. An extension is possible (see Section 16(5) BBergG). There is a legal entitlement to the granting of a license, provided there are no grounds for refusal.

The license can be refused if, for example, it cannot be proven that the mineral resources can be extracted according to their location and nature (see Section 12 BBergG). A license shall be revoked after three years in cases where extraction is not commenced or is interrupted, unless there are grounds for obstruction pursuant to Section 18(3) sentence 2 BBergG. The grounds for refusal are listed exhaustively in Section 12 BBergG (incl. reference to Section 11 BBergG).

Proprietary mining rights

Proprietary mining rights are a special form of mining license for the extraction of free-to-mine mineral resources. They comprise the rights and obligations associated with the granting of a license, but also allow mortgage lending and the registration of easements. The proprietary mining rights are entered in the land register with the name and address of the applicant and details of the field. The proprietary mining rights are granted for “a period of time appropriate for the completion of the extraction in the individual case”. Fifty years may only be exceeded if this is necessary in view of the investments normally required for the extraction. An extension is possible (see Section 16(5) BBergG). If the regular extraction of natural resources has been interrupted for more than ten years, the proprietary mining rights must be revoked in certain cases (if Section 18(4) sentence 1 BBergG is applicable). In order to apply for proprietary mining rights, the applicant must already hold a license for the specified field. In addition, proprietary mining rights may be denied if, for example, it cannot be demonstrated that an economic extraction of the natural resources is to be expected (see Section 13 BBergG).

Special case: Mining license according to old law

In addition to the above-mentioned authorisations (permit, license or proprietary mining rights), the authorisation forms also include authorisations derived from old law, which are referred to as old rights. These are mining licenses granted before the current Federal Mining Act of 1982 entered into force. They include, for example, the opencast lignite mining industry in the Rhenish mining area or the salt mining leasehold rights (Salzabbaugerechtigkeiten) and old crude oil contracts in Lower Saxony. They remain valid under current law (see Section 149(1) sentence 1 BBergG) if they have been notified to the mining authorities and confirmed by the mining inspection authorities within a transitional period of three years after the BBergG 1982 came into force. In contrast to authorisations under the new BBergG, authorisations under the old law are neither limited in time nor do mine site or extraction royalties have to be paid. In practice, these old rights related/relate in particular to stone and lignite, salts and hydrocarbons. However, the approval of an operating plan is also required for the extraction of mineral resources under the old law.

Special case: special requirements on the territory of the former GDR

The GDR’s mining law system differentiated between nationally owned and other mineral resources. The former essentially comprised the mineral resources that were free-to-mine and privately owned according to German federal law; the latter were classified as property. The Lending Ordinance of 15 August 1990 created the basis for converting mining licences for nationally owned mineral resources into free-to-mine natural resources, thereby transferring them into the German federal legal system. The mining licenses transferred in this way are considered proprietary mining rights; they are unlimited in time and exempt from mine site and extraction royalties. In contrast to the former federal territory, the old rights that are still valid in the new federal states extend to the deposits explored up to 1990 and also comprise privately-owned natural resources.

Overview of old mining laws, mining laws in the GDR and modern mining laws

You can find an overview of all mining rights at Data on mining authorizations​.

Register of licences

Legal basis

In Germany, the right to explore and extract is only granted by the state for free-to-mine natural resources. The right to dispose of a free-to-mine natural resource is referred to as a mining license and can be applied for from the mining authorities of the Federal States (see How are projects for the extraction of raw materials approved and monitored?)

In accordance with Section 75 et seq. BBergG, the mining authorities keep a so-called mining rights register and a mining rights map in which the mining licenses newly granted under the BBergG or maintained according to Section 149 BBergG (so-called “old rights and contracts”) must be entered. The approval of mining activities themselves is continuously monitored in operating plans (see ii. Approval of an operating plan).¹

Public access to the mining rights register and the mining rights map was made possible within the scope of the German implementation of the D-EITI. Since July 2017, the following information on granted and maintained mining licenses can be inspected upon request to the mining authorities without having to demonstrate a legitimate interest:^2,3

• Owner
• Fields to which the mining license relates
• Date of application and granting
• Duration
• Mineral resource to which the mining license relates

Mining exploration licenses and permits can also be viewed due to the amendment (see also Approval of mining projects). In the EfA Bergbau project community, 14 of the 16 federal states jointly develop the BergPass application software, by means of which mining applications can be submitted in the future. The application to inspect the mining rights register will be available online in future.

The competent authorities can also make this information directly accessible to the public, which has already been the case in many federal states for some time. For example, some federal states publish clear online license registers. Other federal states are planning to set up corresponding systems. An overview of all online registers for mining licences and explanations of access can be found in the interactive map for D-EITI reporting.

Furthermore, all mining licenses in Germany in the hydrocarbons sector are published in the annual publication “Erdöl und Erdgas in der Bundesrepublik Deutschland” (Crude oil and natural gas in the Federal Republic of Germany) and in the BVEG annual report.

Example of an online system: the NiBiS map server

A good example of the publication of information on mining licenses on the Internet is the NIBIS map server maintained by the State Office for Mining, Energy and Geology (LBEG) in Lower Saxony. On this website, citizens can obtain information on more than 400 specialised maps on the topics of contaminated sites, mining, soil science, erosion, geology, geothermal energy, geophysics, hydrogeology, engineering geology, climate and natural resources. With regard to mining licenses, the following data and, in some cases, initial decisions issued are regularly available to the public on the NIBIS map server for the Federal States of Lower Saxony, Bremen, Hamburg and Schleswig-Holstein:

• Information on the licence holder
• Coordinates of the licenced area
• Date of granting and validity period of the licence
• Type of mineral resource

Mining licenses in the NiBiS map server

Implementation in other Federal States

Other federal states have also made it possible to view the mining rights register and the mining rights map online. An overview of the online registers can be found in the interactive map for D-EITI reporting.

Beneficial Ownership

The question of who is behind a company and who is its so-called beneficial owner has become increasingly important in recent years with regard to combating the financing of terrorism, money laundering and their predicate offences, such as tax crimes. The framework is set by the European Union with its Money Laundering Directive, most recently the 5th EU Money Laundering Directive (Directive [EU] 2018/843), which is implemented by Member States. On 19 June 2024, the new EU money laundering package was announced in the Official Journal of the EU, which consists of the 1st EU Money Laundering Regulation, the 6th EU Money Laundering Directive and the AMLA Regulation and will apply from 10 July 2027 or must be implemented by then. The 1st EU Money Laundering Regulation and the 6th EU Money Laundering Directive provide for further tightening of transparency regarding beneficial owners.

Beneficial owners of companies are those natural persons who ultimately own or control a company or those natural persons at whose instigation a transaction¹ is ultimately carried out or a business relationship is ultimately established (see Section 3(1) of the Money Laundering Act – GwG). The improved accessibility of this information should make it easier to combat money laundering and terrorist financing.

Enhanced due diligence obligations apply if the beneficial owner is a so-called politically exposed person (PEP). A PeP is defined in Section 1(12) GwG as any person who holds or has held a high-ranking important public office at international, European or national level. It also includes persons who hold or have held a public office below national level but of comparable political importance. PePs include, in particular, ministers, state secretaries, members of parliament, members of the administrative, management and supervisory bodies of state-owned companies (if the federal or state governments hold a stake of more than 50 % and have more than 2,000 employees) and members of the management bodies of courts of audit.

In order to facilitate the identification of PePs, each EU Member State and the European Commission shall establish and update a list of PePs in accordance with Article 1(13) of the 5th EU Money Laundering Directive (Directive (EU) 2018/843), a list which specifies the precise functions to be considered as important public offices within the meaning of the Directive. In Germany, the Federal Ministry of Finance is responsible for drawing up and updating the list and sending it to the European Commission. The European Commission brings together the lists of EU member states and its own list and publishes a common list.

German Transparency Register

In Germany, beneficial owners can be found in the Transparency Register, which is accessible via an Internet portal. As part of the implementation of the 4th Money Laundering Directive (EU) 2015/849 of 20 May 2015, a transparency register was set up on 26 June 2017 in the form of a catch-all register that holds data on beneficial owners, provided this data is not already available in other publicly accessible registers.

The Act on the European interconnection of transparency registers and the implementation of Directive (EU) 2019/1153 of the European Parliament and of the Council of 20 June 2019 on the use of financial information to combat money laundering, terrorist financing and other serious crimes (Transparency Register and Financial Information Act), which was announced on 30 June 2021, changed the transparency register from a catch-all register to a full register. This means that all legal entities are obliged to notify their beneficial owner directly to the register-keeping office of the Transparency Register for entry. In accordance with Section 3 (2) GWG, legal persons who hold more than 25 % of the capital shares, control more than 25 % of the voting rights or exercise control in a comparable manner are considered to be beneficial owners in accordance with European law.

Information on beneficial owners in the Transparency Register

The first and last name of the beneficial owner, date of birth and place of residence, country of residence, type and scope of the beneficial interest and all nationalities are recorded.

Management of the Transparency Register

The Transparency Register is kept by Bundesanzeiger Verlag GmbH as the entrusted agency. In principle, the associations and legal entities in Germany specified in Section 20 and Section 21 GwG are obliged to report the current details of the beneficial owner to the Transparency Register in electronic form. Upon registration, the office keeping the register carries out a conclusiveness check of the reported data, Section 18(3) GwG. The content of the reported data is checked if a discrepancy report has been submitted.

Incorrect, incomplete or missing entries constitute an administrative offence and may be subject to a fine. The competent regulatory authority for the imposition of fines is the Federal Office of Administration (BVA). In addition, persons subject to anti-money laundering obligations (e.g. credit institutions, financial services institutions, insurance institutions, auditors, real estate agents or lawyers and notaries if they buy or sell real estate or commercial enterprises for the client) and certain authorities² must report any discrepancies they notice in the Transparency Register in accordance with Section 23a GwG. Obliged parties are also liable to a fine for failing to submit a required discrepancy report (Section 56(1) sentence 1 no. 66 GwG).³

Final and non-appealable decisions on fines are published by the BVA if the fine exceeds EUR 200.

Inspection of the Transparency Register

The information on the beneficial owners in the Transparency Register is accessible to authorities, courts and the bodies specified in Section 2(4) GwG within the scope of their statutory duties, and to persons subject to anti-money laundering obligations within the scope of fulfilling their due diligence obligations under anti-money laundering law.

The Transparency Register has also been accessible to the general public since 1 January 2020 in accordance with the provisions of the Amending Directive to the 4th EU Anti-Money Laundering Directive (Directive [EU] 2018/843) (Section 23(1) GwG). In this context, a ruling by the European Court of Justice on 22 November 2022⁴ stipulates that the provision of the EU Money Laundering Directive is invalid, which stipulates for the entire EU that information on the beneficial owners of companies or other legal entities entered in the Transparency Register is accessible to all members of the public without restriction in all cases. In order to protect the fundamental rights to privacy and data protection of beneficial owners, the data may only be made accessible under certain conditions. The notification obligations regarding beneficial owners remain unchanged and the continuation of the Transparency Register is also not affected.

In an EU member state, national laws must be in line with EU law. Therefore, a legitimate interest in accessing the Transparency Register must currently be demonstrated. Art. 74 of the 6th EU Money Laundering Directive provides for the reintroduction of the legitimate interest; this regulation was already to be implemented by the EU member states by 10 July 2025.

If interested parties wish to view the Transparency Register, they must register once online on the website www.transparenzregister.de. Subsequently, the legitimate interest for each legal entity requested must be established individually by setting out past or planned activities in the field of money laundering and terrorist financing. The individual registration steps are explained in more detail in the quick guide “Inspection of the Transparency Register for members of the public” . The consultation of civil society has shown that the process can be improved and accelerated. This is planned in the German government’s implementation of the 6th Money Laundering Directive.

If the beneficial owner has interests worthy of protection, it is still possible to have access to the Transparency Register restricted by the office keeping the register. For this purpose, the beneficial owners must present facts according to which public inspection would expose them to the risk of becoming victims of certain criminal offences (e.g. extortion) (Section 23(2) GwG). As of 20 September 2024, 4,423 requests for restriction have been submitted. Since 2021, the office keeping the register has published annual statistics on the number of restrictions granted and the reasons for restrictions and transmitted them to the European Commission (see Section 23(2) last sentence GwG as amended).

As of 1 January 2021, law enforcement authorities and the Financial Intelligence Unit (FIU) were granted automated access to all data in the Transparency Register as part of their duties (see Section 26a GwG). The Transparency Register and the Financial Information Act have extended this possibility to the supervisory authorities, the Federal Central Tax Office, the local tax authorities and the federal and state constitutional protection authorities.

For D-EITI reporting, access to the data in the transparency register of the Independent Administrator may be considered on the basis of a legitimate interest, provided that the Administrator intends to determine whether the companies invited to report have an entry in the transparency register and whether this entry is plausible on the basis of the information available to and to be obtained by the Administrator.⁵

The Independent Administrator was able to inspect all entries of the companies participating in the D­EITI in the Transparency Register and to check them for plausibility. On 24 April 2023, the Independent Administrator announced: “After reviewing the information […] and comparing it with public sources available to us, we have not identified any implausibilities in the information (as of 21 April 2023). As a precautionary measure, we would like to point out that an audit in accordance with Section 23a GWG was completed for one participating company in April 2023 and an audit was still pending for another participating company at the time of our inquiry.”⁶

Members of the private sector in the MSG examined whether voluntary disclosure of information on beneficial owners is possible. The companies pointed out that there are practical and legal obstacles to obtaining the consent of those affected. A basis under data protection law is required for the disclosure of beneficial owners and PePs. Without the consent of the data subjects, individual case assessments are necessary for each data subject, which is time-consuming, as contact persons in the companies must first be identified and contacted.

The EU member states are currently working together with the EU Commission on the networking of the European Transparency Registers in accordance with Art. 30 et seq. of the Amending Directive to the 4th EU Money Laundering Directive (Directive [EU] 2018/843). This networking will lead to access to the Transparency Registers of all Member States via a common European platform (“BORIS”). Following the announcement of the ECJ ruling, 12 member states suspended access to their Transparency Registers. The networking of the European Transparency Registers was partially suspended for this reason. However, the authorities already have access to the networked data.

Other publicly available information on company structures

Information about legal entities (e.g. corporations), as well as personal trading companies (e.g. limited partnerships, open trading companies, partnership companies and registered companies under civil law) is recorded in the registers of the competent register courts. These registers document persons authorised to represent the company and, for certain legal forms, information on other parties involved that must be published (e.g. in accordance with the German Commercial Code (HGB), Limited Liability Companies Act (GmbHG), Partnership Act (PartG), etc.).

The commercial register serves to disclose the facts and legal relationships of merchants and commercial companies that are of particular importance for legal transactions. All authorised representatives and shareholders of commercial partnerships are entered in the commercial register and can be viewed by the public. The shareholders of a GmbH are included in the publicly accessible list of shareholders.

As part of the implementation of the so-called 4th EU Anti-Money Laundering Directive 2015, the 2017 GwG reform also created regulations that expanded the required shareholding information in shareholder lists in accordance with Section 40(1) GmbHG and the GmbH Shareholder List Ordinance.

Anyone is permitted to inspect the commercial register for information purposes (cf. section 9(1) sentence 1 HGB33). The right includes all documents to be submitted, including the lists of shareholders submitted to the register. Entries and documents from the commercial, association, cooperative, company and partnership registers can be viewed publicly online via the joint register portal of the federal states.

In addition to access to the entries in the above-mentioned registers and the disclosed documents, the Company Register also contains e.g. accounting documents and company reports in accordance with the German Commercial Code (HGB) and publications in accordance with capital market regulations (e.g. German Securities Trading Act (WpHG)). As with the commercial register, anyone can view the Company Register online (Sections 8b, 9 (6) HGB).

The beneficial owner of listed companies can often be determined on the basis of the voting rights notifications in the Company Register. Pursuant to Section 33 (1) WpHG, reaching, exceeding and falling below 25 % of voting rights is subject to notification, whereby far-reaching attribution facts apply pursuant to Section 34 WpHG (e.g. in the case of fiduciary constellations). These notifications must be published in accordance with Section 40 WpHG and can be viewed in the Company Register. The 25 % threshold also corresponds to the notification requirement for significant shareholdings in unlisted stock corporations (Sections 20 et seq. AktG (German Stock Corporation Act).

There is further information about companies and individuals that can be viewed online, which serves different purposes and can only be mentioned here as examples. For example, insolvency proceedings can be viewed in the Insolvency Notifications and data from debtor directories in the Joint Enforcement Portal of the Federal States.

Public contracting authorities are obliged or can access the electronic competition register in the context of procurement procedures in order to check companies with regard to the existence of final criminal convictions and penalty orders or decisions imposing fines for certain economic offences. Details are regulated in the Competition Register Act.

Corruption prevention regulations in public administration and the private sector

Corrupt behaviour can occur in a variety of forms and in different areas of a society. Whether bribery or corruptibility in international business transactions or in one’s own country, whether venality in politics and administration – corruption undermines the foundations of a society by damaging the trust of citizens in the state and the economy and can also cause material damage.

In Germany, various regulations and instruments are used to prevent and prosecute corruption in administration, politics and business. These include laws, administrative regulations and awareness-raising measures. Since corruption often happens in secret, transparency is key to preventing and detecting illegitimate practices.

Public administration

Public authorities make decisions and set rules, particularly for private sector activities.

Public officials are exposed to corruption risks in the performance of their duties. Criminal offences and penalties are regulated in particular by the German Criminal Code (StGB).¹ Accepting and granting benefits as well as bribery and corruption are punishable. The penalty ranges from three years (Sections 331, 333 StGB) to 15 years (Section 335 (1) number 2 StGB). Corruptibility of judges (Section 332 (2) StGB) and corruptibility and bribery of elected officials (Section 108e StGB) are crimes and punishable by a prison sentence of one to ten years.

In accordance with Section 71 of the Federal Civil Service Act (BBG), civil servants of the federal states and local authorities may not demand, accept promises of or accept any rewards, gifts or other benefits in relation to their office/official duties for themselves or third parties in accordance with Section 42 of the Civil Service Status Act (BeamtStG). The prohibition applies to all benefits of an economic and non-economic nature.

An analogous provision applies to employees covered by collective agreements in accordance with Section 3(2) of the Collective Agreement for the Public Service (TVöD): Rewards, gifts, commissions or other benefits relating to official activities must not be accepted.

Civil servants in Germany are subject to special obligations, such as the duty of confidentiality and the obligation to comply with the official channels. In connection with acts of corruption, however, they are entitled² to report³ the suspicion of a corruption offence to the competent supreme service authority, a law enforcement authority or other bodies without adhering to official channels.

In addition to statutory regulations, the prevention strategy in the area of federal administration is essentially based on the Guideline of the Federal Government for Corruption Prevention in the Federal Administration from 2004 and its annexes. The administrative regulation specifies concrete measures to prevent corruption, e.g. the regular identification of work areas particularly at risk of corruption, the multiple-control principle, the appointment of a contact person for corruption prevention, awareness-raising and further training for employees as well as guidelines for awarding public contracts.

In 2017, the European Union adopted a directive on the fight against fraud⁴ by means of criminal law to protect its financial interests, as well as a convention⁵ on the fight against corruption, which also applies to officials of the EU and the Member States. In May 2023, the European Commission also presented a new anti-corruption package,⁶ including a proposal for a directive to strengthen criminal law rules. This is currently undergoing trilogue negotiations between the Commission, Council, and Parliament.

Under international law, Germany’s obligations to combat corruption arise primarily from the United Nations Convention against Corruption (UNCAC) of 2003⁷, the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions of the Organisation for Economic Cooperation and Development (OECD) of 1997 and the Criminal Law Convention on Corruption of the Council of Europe of 1999.⁸ Separate regulations exist for state administrations at the federal state level. They are essentially based on the Federal Government’s directive.

Local Government

A wide range of regulations and measures to prevent corruption can also be found at municipal level, such as service instructions, codes of conduct and contact persons. In view of the local self-government guaranteed in Art. 28 (2) Basic Law, the municipalities are granted the right to regulate all matters of the local community on their own responsibility within the framework of the law. As a rule, municipal administrations have detailed anti-corruption measures in place.⁹

Bribery and corruption of elected representatives

Anyone who holds a political mandate bears particular responsibility for the integrity of the political system in Germany.¹⁰ Corruption in the form of bribery and venality (e.g. “vote buying”) damages this integrity and therefore democracy. To counter this danger, the criminal offence of bribery of members of parliament was introduced in 1994. As part of the implementation of the United Nations Convention against Corruption, the offence was expanded in 2014 and Section 108e StGB was revised under the heading of bribery and corruption of public officials. On 19 October 2021, the penalty threat was significantly increased.Accordingly, corruption and bribery of elected officials is a crime and therefore punishable by a prison sentence of one to ten years, and in less serious cases by a prison sentence of six months to five years. In order to prevent abusive opportunities for influence by elected representatives, the legislator has created a new criminal offence of inadmissible representation of interests (section 108f of the Criminal Code), which came into force on 18 June 2024 and criminalises the inadmissible influence trade by elected representatives even if it is aimed at a representation of interests outside the mandate.

Prevention and control through transparency

Corruption is an offence that is committed in secret and the parties involved have no interest in exposing it. Furthermore, the actual damage to individuals and the general public cannot usually be determined, or only after a delay. Measures to create transparency are therefore important instruments in the fight against corruption. These include, on the one hand, the regulations to combat money laundering with the help of the disclosure of “beneficial owners” through the Transparency Register (see Beneficial Owner). In addition, the transparency rights under the Environmental Information Act enable the disclosure of the contents of authorisation notices that companies in the natural resources extraction sector require for their practical activities, for example to avoid unlawful environmental pollution (see Public access to environmental information and “authorisation notices”).

Another instrument is the reporting of corruption by employees in companies and public authorities (whistleblowers). They are often the first to notice abuses and can use their information to ensure that violations of the law are uncovered, investigated, prosecuted and stopped. At state level, there are reporting offices for corruption, for example at the Federal Financial Supervisory Authority (BaFin), the state criminal investigation offices or in the form of ombudspersons in various federal states and municipalities. The contact persons for the prevention of corruption (at federal level in accordance with the Directive on the Prevention of Corruption, section 5) also receive reports of suspected cases of corruption.

The Directive (EU) 2019/1937 of the European Parliament and the Council of 23 October 2019 on the protection of persons who report breaches of Union law has now been implemented. On 2 July 2023, the law for better protection of whistleblowers and for the implementation of the directive on the protection of persons who report breaches of Union law came into force. The central component of the law is a new parent law for better protection of whistleblowers (Whistleblower Protection Act). The law also applies to the reporting of crimes, so that the reporting of corruption offences under Sections 321 et seq. StGB is also covered.

The Federal Criminal Police Office provides information on annual developments and corruption statistics in the Federal Situation Report on Corruption. In addition, the Federal Ministry of the Interior publishes an annual Report on Corruption Prevention in the Federal Administration (since the 2020 reporting year, the “Integrity Report”), which provides an account of the implementation of the Corruption Prevention Directive to the German Bundestag.¹¹

Private Sector

Corruption in the form of bribery and venality in business dealings is a criminal offence (Section 299/Section 300 StGB) and can be punished with a fine or a prison sentence of up to three years or a prison sentence of three to five years.

Many companies support the 17 Sustainable Development Goals (SDGs), which underline, for example, in Goal 16 “Peace, justice and strong institutions” and more specifically in Subgoal 16.5 “Substantially reduce corruption and bribery in all their forms”.

Based on 10 universal principles and the SDGs, the UN Global Compact (UN GCD) pursues the vision of a more inclusive and sustainable economy for the benefit of all people, communities and markets, today and in the future. Currently, the signatories include over 25,500 companies and organisations from civil society, politics and science in more than 170 countries. In Germany, more than 1,240 participants are registered, including about 1,150 companies from DAX to mid tier and SMEs. In principle 10 of the UNGC on Anti-Corruption, companies are asked to “fight all forms of corruption, including extortion and bribery”.

Other sustainability frameworks also contain principles or requirements in the area of anti-corruption. Criterion 20 of the German Sustainability Code, for example, specifies behaviour that complies with the law and guidelines. The user group includes large and small, public and private companies with and without sustainability reporting, companies subject to reporting requirements and all those organisations that want to inform their stakeholders about their sustainability performance. Selected indicators of the Global Reporting Initiative (GRI) and European Federation of Financial Analysts Societies (EFFAS) need to be reported.

Compliance is generally understood to mean ensuring that a company, its executive bodies and employees and, where applicable, third parties act in accordance with the statutory, internal and external regulations that affect the company by means of suitable measures. This does not only include compliance per se, but also the formal and informal organisation of compliance through the implementation of appropriate measures. Compliance management systems in companies are based on a risk-based approach that takes into account the long-term interests of the company, ethical behaviour, reputational risks and special liability risks in addition to avoiding conduct that is relevant under criminal law and subject to fines. Compliance regulations and codes of conduct play a central role as an instrument of prevention and a core element of an effective compliance management system. In addition, many companies have compliance officers and whistleblower systems as central points of contact for the implementation of compliance regulations.

In codes of conduct¹², companies usually formulate a zero-tolerance policy towards corruption, which is generally binding for all employees.

Although there are no comprehensive legal regulations on compliance, some government regulations in particular are close to compliance. For example, the law on administrative offences and company law (Section 43 GmbHG and Sections 91, 93 AktG) should be mentioned here. In addition, the German Corporate Governance Code (DCGK) in the 2022 version plays a central role, for which every listed public limited company must issue a declaration of compliance in accordance with Section 161 AktG. In addition, there are a number of special statutory provisions, such as for insurance companies in the Insurance Supervision Act, for companies in the financial sector in the Securities Trading Act, in the Commission Delegated Regulation (EU) 2017/565 of 25 April 2016 supplementing MiFID II Directive with regard to organic requirements for investment firms, the Investment Services, Conduct and Organization Regulation, in the Banking Act or in the circulars of the German Federal Financial Supervisory Authority (BaFin), in particular the Minimum requirements on risk management (MaRisk) or the Minimum requirements on the compliance function and other conduct, organization and transparency obligations (MaComp).

If a company fails to take appropriate compliance measures and a corruption offence is committed as a result, the company may be fined in accordance with Sections 130, 30 OWiG (German Administrative Offences Act). The respective requirements on compliance are not specifically regulated by law.

Extractive companies in Germany pay various fees, duties and taxes on their activities. A company that extracts free-to-mine natural resources in a Federal State pays specific mine site and extraction royalties to that Federal State as per the Federal Mining Act. Excluded from this are natural resources that are extracted on the basis of “old rights” (see Legal framework). Regardless of the activity involved, all companies in the extractive sector – and most other companies – are subject to trade and corporate tax.

Who is responsible for revenues collection?

Due to the federal structure of the Federal Republic of Germany, tax administration is split between the Federal Government and the Federal States. Depending on the type of tax, it is levied by the financial authorities of the Federal Government, the Federal States or the local authorities. One exception to this rule is mine site and extraction royalties, which are levied by the mining authorities of the Federal States.

Which payments are made by the extractive industry?

Corporate tax and solidarity surcharge

Extractive companies with the legal form of a corporation (in particular a limited liability company or public limited company) which have their head office or management in Germany are subject to unlimited corporate tax. Corporations which do not have their head offices and management in Germany are subject to corporate tax on the income generated in Germany. In Germany, corporate tax amounts to 15% of the taxable income. From 1 January 2028, the corporate tax will be reduced in five steps by one percentage point per year. From 1 January 2032, the corporate tax amounts to 10% of the taxable income. The revenue is shared by the Federal Government and the Federal States. Corporate tax is levied by the tax authorities of the Federal States. A solidarity surcharge set at 5.5% of the corporate tax determined is levied as a supplementary tax to corporate tax. The solidarity surcharge is payable to the Federal Government and is collected by the tax offices of the Federal States.

Mine site- and extraction royalties

Companies and persons require a permit to prospect for “free-to-mine” natural resources (Section 7 BBergG). Owners of this type of permit are required to pay annual mine site royalties as per Section 30 BBergG. Pursuant to Section 30(3) sentence 1 of the BBergG, a mine site royalty generally amounts to €5 per square kilometre of a mine site in the first year after the permit has been granted; the amount increases by €5 per year to a maximum of €25 per year, whereby the legislation of individual Federal States may provide for differing royalty amounts and even exemptions under certain conditions (see Section 32(2) BBergG and table: Federal State law regulations on mine site and extraction royalties. The expenses incurred for prospecting are set off against the mine site royalties. Mine site royalties must be paid to the Federal State in which the licensed mine site is located.

If natural resources are found, a license is required for their extraction. However, extraction is only possible if the necessary operating plan permit and any other approvals such as water right approvals have already been granted. If the extracted natural resources can be used for financial gain, the permit holder must pay extraction royalties for the extracted free-to-mine natural resources as per Section 31 BBergG. The standard rate for extraction royalties is 10% of the market value of the natural resources in question (Section 31(2) sentence 1 BBergG). Here too, individual Federal States may stipulate different regulations in their legislation for the calculation of mine site and extraction royalties under certain conditions (see Section 32 BBergG and table: Federal State law regulations on mine site and extraction royalties).

Owners of old rights are exempt from extraction royalties in accordance with Section 151(2) no. 2 BBergG (see Legal framework). In practice, this primarily affects lignite extraction and old grants for granite, coloured earths, salt and brine. Even before BBergG 1982 came into force, the operators of these sites had received unlimited-term, irrevocable extraction rights free from royalties or had acquired old rights in the “new” Federal States in eastern Germany in the course of privatising proprietary mining rights.

For this reason, they are not recorded in the State ordinances on extraction royalties.

This excludes Saxony and Saxony-Anhalt. In these Federal States, special aspects required new licenses to be applied for in accordance with the BBergG within the framework of the Unification Treaty. These licenses are always subject to royalties. Therefore, exemptions were created in the Extraction Royalties Ordinances of both States (Parliamentary advisory service of the State parliament of Brandenburg 2008).¹ In Saxony and Saxony-Anhalt, the exemptions are currently limited until 31 December 2025.

Mine site and extraction royalties only apply to free-to-mine natural resources. While mine site royalties are appropriated into the respective Federal State’s budget, the revenue from extraction royalties is used for inter-state financial equalisation. Mine site and extraction royalties are levied by the mining authorities of the Federal States.

An overview showing which natural resources are subject to mine site- and extraction royalties can be found below.

Trade tax

Trade tax is levied on real estate or property. Assessment of trade tax involves several stages: The municipalities due to receive the trade tax are routinely responsible for levying the tax. The trade tax is levied by the municipality in which the enterprise is located. The purpose of the trade tax is to tax the objective earning potential of a commercial enterprise. However, unlike corporate tax, trade tax is not linked to economic performance. Additions and deductions correct the profit of the commercial enterprise (Sections 8 and 9 GewStG (Trade tax)). To calculate trade tax, the responsible tax office determines the taxable amount, which is 3.5% of the objectified earning potential of the commercial enterprise. For all the companies in its area of jurisdiction, the responsible municipality determines a uniform tax factor, which must be at least 200% (Section 16(4) sentence 2 GewStG) and calculates the trade tax based on the taxable amount determined by the tax office and the individual tax factor.

Extractive companies with the legal form of a partnership or limited company are subject to trade tax. If operating facilities are located in an area belonging to several municipalities or are operated in a number of municipalities, the tax assessment basis (assessment basis for trade tax) is distributed among these individual municipalities (so-called “reallocation”). As a general rule, the wages in the individual operating facilities are used as a measure for the calculations. This means that each municipality involved levies its share of the trade tax.

Tabular overviews of the tax factors of the municipalities in Germany are available via the Federal Statistical Office² and visualised on a map for 2023. Trade tax is the main source of tax for municipalities, followed by land tax. The Federal Government and the States share in the revenues of the trade tax through an allocation and redistribution mechanism for trade tax. The remainder of the trade tax for the municipalities flows into their general budgets, thus helping to finance the local infrastructure and to provide education and social services among other things.

Lease payments

In Germany, the extraction of natural resources is governed by the BBergG, if the resources concerned are free-to-mine or privately-owned natural resources (see Legal Framework, Figure 2). The ownership of a property does not extend to free-to-mine natural resources, so in this respect the property rights of the landowner are limited. Privately-owned natural resources, on the other hand, are owned by the landowner. The landowner may carry out prospecting and extract the resources if found, without the need for any additional special legal title in addition to the operating permit and other required public-law approvals. Its inclusion in the scope of validity of the BBergG aims to make their extraction subject to a uniform legal framework throughout Germany and (in particular) to uniformly regulate natural resource extraction in underground mining and ensure uniformity in the management of mining inspection authorities. This is because the mining of natural resources requires the submission of operating plans, which must be approved by the mining authorities before the natural resources are extracted.

In addition to privately owned natural resources, there are the so-called “landowners’ natural resources”. Like the privately owned natural resources, these are also the property of the landowner, but they are neither subject to mining law nor to mining inspection authorities.

A company does not have to own the land to extract privately owned natural resources and landowners’ natural resources. If the owner of the land simply makes it available to the company on the basis of a legal private contract (e. g. through a lease agreement) – and this is often the case – that alone suffices. Such contractual arrangements may include fixed payments or payments that depend on the quantity extracted, or a combination of both variants. On the Federal State side, official bodies including local authorities (e. g. counties or municipalities) and forestry offices may have the roles of landowners and landlords. The revenues from these leaseholds may be transferred to municipal budgets or Federal State budgets, thus making it possible to finance statutory tasks.

Excise duties

Energy and electricity taxes are particularly relevant for companies in the extractive sector, within the framework of excise duties. The Energy and Electricity Tax Act is based on the harmonised provisions of the EU Energy Tax Directive 2003/96/EC of 27 October 2003. Like the other excise duties, energy and electricity taxes are explicitly excluded from the reporting obligation within the framework of the legal commercial (corporation) payment report, as per the EU Accounting Directive and its implementation in Section 341r, no. 3 b) HGB (German Commercial Code).

On 1 April 1999, the electricity tax was introduced in Germany along with the law covering ecological tax reform, and the energy tax rates (at that time still called mineral oil tax) were gradually increased. This set incentives for reducing energy consumption and developing resource-efficient production processes.

The Electricity Tax Act and the Electricity Tax Implementing Ordinance constitute the legal basis for levying electricity tax. The Federal Government is entitled to electricity tax revenues, which amounted to €6.8 billion in 2023 and in €5.1 billion in 2024.³ The revenue from the electricity tax and the higher taxation of fuels and heating materials obtained in connection with the ecological tax reform contribute to keeping social insurance contributions at a manageable level. Administration and collection tasks are carried out by customs administration.

Companies in the extractive sector are generally subject to electricity tax. The statutory tax rate is €20.50 per megawatt hour. Reduced tax rates can be considered for various purposes, e. g. railway electricity, whereas the production industry can particularly benefit from tax relief. In addition, all consumers can benefit from tax exemptions for environmentally friendly electricity generated and used by themselves (see Subsidies and tax concessions).

The energy tax is an excise duty on energy products. It is governed by Federal legislation, and levied to tax the use of energy products as fuels or heating fuels within the German tax territory. The Energy Tax Act defines energy products as being (in particular), petrol, diesel fuel, light and heavy fuel oil, liquefied petroleum gas, natural gas and coal as well as biodiesel, vegetable oil and energy products of a similar nature that are used as motor or heating fuels. The amount of the tax varies according to the energy product and its intended use and is regulated in the Energy Tax Act. Tax concessions are standardised in the Energy Tax Act for certain energy products and intended uses (see Subsidies and tax concessions). Like the electricity tax, energy tax is levied by the customs administration, and the revenues flow to the Federal Government. In 2023, energy tax revenue totalled approx. €36.7 billion and approx. €35.1 billion in 2024.⁴

The sheer financial volume of electricity and energy tax payments by companies in the natural resources extractive sector, and the financial scale of electricity and energy tax concessions (see Subsidies and tax concessions) cannot be feasibly presented without a disproportionate amount of bureaucratic effort. Statistics that differentiate between individual economic sectors are not yet kept (for an estimate of the magnitude of electricity tax payments in the extractive sector, see Subsidies and tax concessions d).⁵

EU energy crisis contribution

According to Chapter III of Council Regulation (EU) 2022/1854 of 6 October 2022 on emergency measures in response to high energy prices (OJ L 261I, 7.10.2022, p. 1), profits of companies and permanent establishments of the Union operating in the oil, gas, coal and refinery sectors are subject to an EU energy crisis contribution limited to two years (generally the financial years 2022 and 2023) (EU Energy Crisis Contribution Act of 16 December 2022 (Federal Official Gazette I p. 2294, 2325). The EU energy crisis contribution is 33% of the assessment basis. The assessment basis is the amount equal to the positive difference by which the tax profit for the tax period exceeds the average of the tax profit for the four preceding financial years, increased by 20%.

How important is tax secrecy in Germany?

Tax secrecy has a high priority in Germany. Since taxpayers must fully disclose their tax details to the financial authorities within the framework of their cooperation obligations, the privacy of their information must be ensured. This is ensured by the regulations in Sections 30 et seq. of the German Tax Code (AO) and the provisions of the General Data Protection Regulation (GDPR). The provisions of the Sections 30 et seq. AO regulate who must protect tax secrecy and under what conditions the disclosure or utilisation of data (which is subject to tax secrecy) is permitted. Tax secrecy thus serves to protect the taxpayer.

A breach of tax secrecy can only be permitted under very strict conditions. Any disclosure of information which is subject to tax secrecy is only permitted if expressly authorised by Federal law, if the data subject agrees to the disclosure, or if there is a compelling public interest in the disclosure of the tax data in question.

This is why the disclosure by the tax authorities of data for voluntary reporting initiatives – like the Extractive Industries Transparency Initiative – requires the explicit consent of the companies concerned. Because payment reconciliation regarding tax payments within the framework of the EITI process was carried out with the tax authorities for the 1st and 2nd D-EITI reports, the permission of the taxpayer in the form of a power of attorney for the Independent Administrator was required in each case for each of the finance authorities involved to query the relevant tax data. For this year’s reporting the D-EITI has – since the third report – applied an alternative procedure for assuring the quality of the payments disclosed by the reporting companies (see Disclosed payment flows and quality assurance). With this procedure it is not necessary to obtain a release from tax secrecy and thus the considerable extra work¹ that this involves for companies and the tax authorities, as the data is only collected from the company and not from the tax authorities.

Statutory reporting obligation for extractive companies (§§ 341q et seq. HGB)

By way of derogation from the rules on German tax secrecy, companies extracting raw materials are subject to a statutory reporting obligation and disclosure of payments to public authorities in accordance with Section 341q et seq. of the German Commercial Code (HGB).

The Accounting Directive Implementation Law (BilRUG) of 23 July 2015 implemented the requirements of the EU Accounting Directive 2013/34/EU of 26 June 2013 into German legislation. The provisions of Sections 341q et seq. in the German Commercial Code (HGB) largely correspond to the requirements of the EITI. All the “large” limited companies and limited liability commercial partnerships involved in the extractive sector or in the logging sector in primary forests are subject to these reporting requirements under commercial law (cf. Section 341q HGB). The term “large” in the legal sense refers to companies that exceed at least two of the following three criteria on two successive reporting dates (Section 267(3) sentence 1 HGB):

• Balance sheet total of €25 million
• Turnover of €50 million
• An annual average of 250 employees

Within the meaning of Section 264d HGB capital market-oriented limited companies, as well as credit institutions and insurance companies in the legal form of limited companies (including limited liability commercial partnerships) are also subject to the reporting obligation, irrespective of their size. Besides reporting at the level of an individual company, the HGB also provides for an obligation to report at corporate level. Here it is not a prerequisite that the parent company itself is involved in the extractive sector or in the logging sector in primary forests. It is sufficient if this applies at least to a subsidiary.

The companies subject to the legal provisions are required to disclose payments made to government agencies above a “materiality threshold” of €100,000 per government agency, if these payments fall under one of the reasons for payment specified in Section 341r no. 3 HGB. In addition to tax payments, this includes e.g. licenses, concessions (for both it applies to mining licenses as such) and other contractual relationships related to the extraction of natural resources. The data must be allocated to individual projects (see Section 341r no. 5 HGB), if more than one project has been carried out in the year under review.

How are the revenues of the natural resources sector allocated?

The Federal State structure of the Federal Republic of Germany is reflected in the distribution of tax revenues. The level which has the authority for the revenues, i.e. how they are distributed between the Federal Government, the Federal States and the municipalities is regulated by Article 106 of the Basic Law (GG). Here a distinction is made between so-called “community taxes” and taxes which flow in their entirety to the municipalities, Federal States or Federal Government. In the case of community taxes, the revenues are shared between the Federal Government and the Federal States.

With regard to the extraction of natural resources, corporate tax and income tax are relevant examples of community taxes. The Federal Government and the Federal States are each allocated 50% of corporate tax revenues. Trade tax, on the other hand, is purely a municipal tax. As the most important source of income of the communities, it is allocated to the individual municipalities in which the relevant operating facilities are situated. The Federal Government and the Federal States’ share in the revenues of the trade tax through a specific allocation and redistribution mechanism.

With regard to the revenues from extraction royalties, redistribution between the Federal Government and the Federal States also takes place. The revenues flow into inter-state financial equalisation. The Federal Government is entitled to the revenues from electricity and energy taxes.

As per Section 3 of the Tax Code, the tax from the extraction of natural resources is not earmarked for a specific purpose; the persons responsible for the Federal Budget, the Federal State budget and the municipal budgets decide how they will be used. The amount and use of revenues and expenditure are disclosed in detail every year. To this end, the Federal Government and the Federal States adopt budget laws (the municipalities adopt budget statutes) that include their own budgets. When the budgets are published, all citizens then have free access to the information.

To facilitate public access to information on the use of tax revenues, the BMF publishes information about the Federal Budget on the online platform https://www. bundeshaushalt.de¹ and on the D-EITI portal, there are links to the individual Federal State budgets via the Interactive map for D-EITI reporting .

Contribution to the GDP

In 2023 and in 2024, the gross value added in Germany amounted to €3,825 and €3,901 billion at current prices, respectively.¹ According to the International Monetary Fund, this makes Germany the largest economy in Europe and the third largest in the world, measured in current US dollars.² The gross value added of the “mining and quarrying” economic sector amounted to €5.6 billion in 2023, which is equivalent to 0.15% of Germany’s gross value added.³

Turnover

“Mining and quarrying” sector companies generated a total turnover of around €11.1 billion (€10.6 billion) in 2023 (2024). Domestic sales accounted for around €10 billion (around 90%) (€9.5 billion (around 90%)) and export sales for €1.1 billion (around 10%) (€1.1 billion (around 10%)).

The extractive sector generates revenue for the state at the various federal levels (see links to the individual Federal States via the Interactive map for D-EITI reporting). The most important revenues are the taxes from general company taxation (corporate tax and personal income tax plus solidarity surcharge and trade tax), as well as mine site and extraction royalties specific to the natural resource extracted in each case.¹ Together, these revenues generated by the extractive industry amounted to approximately €578 million in 2023 (as of 06/2025). This represents 0.03% of total Federal Government revenue. More detailed information on this revenue can be found in Disclosed payment flows and quality assurance. Other payments are also made by the extractive sector to the state, such as leaseholds, energy and electricity taxes (see Revenues generated by the extractive industry), as well as payments relating to interventions in nature conservation legislation and water use (see Managing human intervention in nature and landscape) which are not described in this chapter.

Taxes

The sum of the above-mentioned taxes paid by the extractive industry in 2023 amounted to around €373 million (as of 06/2025). This corresponds to a proportion of around 0.02% of the state’s total income.² The largest amount of tax revenues is generated by trade, income and corporate taxes.

The following table shows the estimated revenues from the above taxes of the extractive industry and their share of the total tax revenue (for detailed source information see final note iv). Other payment flows not addressed in the following table are described in Revenues generated by the extractive industry and Subsidies and tax concessions.

Extraction and mine site royalties

Extraction royalties are levied by the mining authorities of the Federal States. They vary greatly, depending on the local mining activity and the fixed levy rates in the individual Federal States.

A total of €204.7 million (€140.5 million) in extraction royalties was collected in Germany in 2023 (2024). The amount of revenue has fluctuated significantly in some Federal States in recent years. This may have different reasons, e. g. changes in world market prices for natural resources or changes in production quantities or levy rates (for detailed source information see final notev).

Only a few Federal States publish their revenues from mine site royalties in their budgets. A summarised overview of the mine site royalties is not available. Most Federal States publish accumulated mine site and extraction revenues in their individual budgets. Their amount is significantly lower than the amount of extractive sector revenues. The revenue from the 2023 mine site royalties is only available for three Federal States: Bavaria, Brandenburg and Lower Saxony (see table 6):

Germany is characterised by a strongly export-oriented and diversified economic structure. In 2023 (2024), Germany exported goods worth a total of around €1.58 trillion (€1.57 trillion).^2,3 Products of the extractive industries accounted for some €5.2 billion (€4.7 billion) of this amount, equivalent to 0.33% (0.30%) of total exports. At around €2.9 billion (€2.5 billion), crude oil and natural gas accounted for the largest share of exports.

Data on the exported goods of the extractive industries also include previously imported goods, so-called re-exports (cf. “The extractive industry in Germany”).  Domestically-extracted natural gas is almost completely consumed in Germany. The “Crude oil and natural gas” sector is followed by “Quarried natural resources, other mining products” with approx. €1.6 billion (€1.6 billion). Exports also included ores worth approx. €0.3 billion (€0.3 billion) and coals valued at about €0.4 billion (€0.3 billion). Here too, the figures include re-exports.^4,5

The payments made by extractive companies to government agencies (see Revenues generated by the extractive industry) must be seen in the context of the subsidies and tax concessions with which the State supports companies. Here the financial aid (already partially discontinued in cases) provided to hard coal mining (see section a. and b.) is the only subsidy that specifically relates to the extractive industry.

In general, companies in the extractive industry can benefit from tax concessions without a specific link to the extractive industry (see section c.). An example is concessions granted by the State in respect of energy and electricity taxes for manufacturing companies (see section d.).

There are different definitions of the term subsidies at both national and international level, and several methodological approaches are used to tackle the topic. The term used here is based on the definition of the Subsidy report of the Federal Government¹ in which the Federal Government reports every two years on federal financial aid and tax breaks. The term used here is based on the definition of the subsidy report of the Federal Government in which the Federal Government reports every two years on federal financial aid and tax breaks. The legal basis for this report is Section 12(2) of the Stability and Growth Act (StabG). It covers aid granted from federal funds and special tax arrangements which directly or indirectly favour private companies or sectors of the economy and serve the objectives of economic preservation, adjustment or increased productivity.

However, a comprehensive presentation of all tax breaks from a financial or tax-systematic perspective is not the task of the Federal Government’s subsidy report. Financial aid is defined as financial contributions by the Federal Government to entities outside the Federal Administration that benefit private companies and sectors of the economy. Tax breaks, on the other hand, are special tax exemptions that result in a loss of revenue for the public authorities. Individual Federal States report on their financial aid in their own subsidy reports (see Appendix 5 of the Federal Government’s subsidy report).

Adaption payments

Workers who were at least 50 years of age (underground workers) or 57 years of age (above ground workers) and who, on the occasion of a closure or rationalisation measure, have lost their job before 1 January 2023, receive adaptation payments (APG) for up to five years as interim aid until they become eligible for pension insurance benefits.² The adaptation payments reflect the commitment of the Federal Government and the coal-producing Federal States to social responsibility. The Federal Government granted adaptation payments totalling €38.6 million in 2023, and €26.5 million in 2024. As of 31 December 2024, 864 employees subject to social security contributions were employed in the coal mining industry. No employees have left the adaptation payment scheme since 1 January 2023. The APG guidelines are valid until 31 December 2027 to ensure the transition of the affected employees to the old-age pension. A small number of employees are still needed to deal with the contaminated sites.

Control measures

In addition to the monitoring of the intended use of funds by the German Federal Office of Economics and Export Control in cooperation with external auditors, the German Federal Audit Office also randomly reviews individual adaptation payment cases within the framework of the Federal Office’s annual budget review.

Transparency of State Financial Aid and Support

Extractive companies can also receive non-specific financial help from the state that is not related to the natural resources sector, if they meet the appropriate criteria for the support programme. Financial aid can be granted as a subsidy, loan or help servicing debt, although nowadays the majority of financial help is in the form of subsidies. For a long time now loans granted directly from the Federal budget have played a secondary role. The reason for this is that the Federal Government uses banks to award the loans and they generally receive an interest subsidy for implementing the programme. The Federal Government’s subsidy report provides information about the financial aid, the extent of the aid and the support objectives. There is no information in the report about the amount of financial aid paid out to the individual recipients.

State subsidies for companies are also the subject of the Treaty on the Functioning of the European Union, as this may reduce competition in the common internal market.

Instead of the term “subsidy”, EU law uses the term “state aid”, which has a legal definition that differs from the term “subsidy”.³ Government support does not only mean direct financial contributions to undertakings, debt write-offs or subsidised loans, but may also cover guarantees, tax breaks or the provision of land and goods and services on special terms which confer an advantage on the undertaking concerned. In order to guarantee fair competition in Europe, the Treaties and corresponding secondary legislation determine the conditions under which such state aid is permissible. The member states of the European Union are required each year to disclose information on any government support granted. Depending on the legal basis under state aid law, this obligation applies to each individual aid above a specific threshold of €100,000 per company. The respective member state has to disclose this information on a detailed state aid website (see Subsidies and tax concessions d.). From 1 January 2026, this obligation will also apply to “de minimis” aid, i.e. small amounts of aid that do not exceed a threshold of €300,000 per company in three years in the sense of state aid law.⁴

The name of the recipient, the amount and the purpose of the state aid together with the legal basis must be published. Where companies in the extractive industry receive state aid, e. g. in the form of reduced-rate loans above the threshold, these can be viewed by the public.

Concessions for electricity and energy taxes

There are various tax concessions for both electricity and energy taxes. Tax concessions include tax exemptions, tax reductions and tax relief. The Electricity Tax Act (StromStG) provides concessions for certain types of use or electricity generation. The Energy Taxation Act (EnergieStG) also covers uses in which energy products are tax-favoured. A part of these concessions is mandatory under the Energy Tax Directive (EU) 2003/96/EC of 27 October 2003.

As manufacturing companies, extractive sector enterprises can particularly profit from the different tax relief possibilities provided by energy and electricity tax legislation.

The following regulations are particularly relevant here for the reporting years 2023 and 2024:

• Tax relief for companies (Section 54 EnergieStG, Section 9 b StromStG): If a manufacturing company applies for electricity and energy tax concessions and its application is approved, it is granted a reduction of 25% of the tax rates on electricity, heating and the fuels used in its production facilities eligible for tax concession. In the area of electricity tax law, tax relief is possible for electricity consumed in 2024 and 2025 up to the EU minimum commercial rate (relief from €20/MWh to €0.5/MWh). A relief within the framework of the so-called “electricity price package” that exceeds the level of individual peak compensation in any case.⁵
• Tax relief in the form of so-called peak compensation (Section 55 EnergieStG, Section 10 StromStG): The statutory relief provisions expired at the end of 2023. Before that time, the additional burden of the “ecological tax reform” on manufacturing companies could be lightened by a reduction in their energy and electricity taxes. Since the increase in revenues generated by the ecological tax reform also served to reduce the factor of “work” and contributed to companies paying less for employers’ contributions to pension insurance schemes in comparison to 1999, a comparative peak compensation calculation is carried out for companies in question. In order to avoid double relief for the employers’ pension insurance as well as for the energy used, saved pension contributions are taken into account in the calculation of the tax relief. The amount of relief is therefore calculated individually depending on the company, and is also capped at a maximum of 90% of the electricity tax paid and 90% of the tax share pursuant to Section 55(3) of the EnergieStG.
• Certain processes and procedures/manufacturer privilege (Section 9a StromStG, Section 51 EnergieStG, Section 26, 37, 44 and 47a EnergieStG): Companies in the manufacturing industry can use electricity or energy products for specific, energy-intensive purposes (such as electrolysis, metal production, manufacture of glassware, etc.). and reduce their tax bills by 100%. In addition, companies that produce energy products on their own premises (refineries, gas extraction and coal mining companies) can use these self-produced energy products tax-free (or obtain tax relief) for the purposes of maintaining operations within their own companies.

The subsidy report of the Federal Government contains the total subsidies for the entire manufacturing industry; they are not shown separately for each sector such as the extractive sector. Where the concessions in the field of electricity and energy constitute state aid, these come under the reporting and transparency obligations of the European Union for state aid (see Transparency of state financial aid and support).

In Germany, the data on tax concessions that are to be published under EU law are collected and forwarded in accordance with the regulation on the implementation of publication, information and transparency obligations in the Energy Tax and Electricity Tax Act (EnSTransV). Under this regulation, the customs administration collects and transmits data relating to energy and electricity tax concessions to the extent prescribed by the EU. The corresponding data can be accessed on the European Commission’s website on state aid.⁶

According to data from the Federal Statistical Office concerning the use of energy in manufacturing companies⁷, the electricity consumption of the “Mining and quarrying sector” (WZ 8-B) totalled 5,366,512 MWh in 2023. Multiplied by the electricity tax tariff of €20.50/MWh without taking account of possible concessions, this figure results in an electricity tax revenue of €110 million.

The companies in the natural resources extraction industry are generally entitled to relief under Section 9b StromStG as companies of the manufacturing industry. In 2023, the tax relief amounted to €5.13/MWh (25%). In relation to the theoretical tax burden mentioned above, this leaves a tax liability of around €90 million or €15.37 electricity tax per MWh after deduction of the tax relief under Section 9b StromStG. The second stage of the relief is the so-called peak compensation according to Section 10 StromStG (until the end of 2023). This is calculated individually for each company depending on the electricity consumption and the pension insurance contributions paid and amounts to a maximum of 90% of the remaining electricity tax. In the absence of individual company figures, a flat-rate relief of 50% of the remaining tax burden can be assumed for all extractive companies as a result of the peak equalisation.

This estimate indicates electricity tax payments from the extractive sector of about €50 million in 2023.⁸ For electricity consumed in 2024, the electricity tax relief under Section 9b StromStG amounts to €20/MWh (see above), so that after deduction of the tax relief, an electricity tax of €0.5/MWh remains. After deduction of the electricity tax relief, the electricity tax burden in 2024 would therefore be in the range of €2 to 3 million assuming electricity consumption comparable to 2023.

The Federal Government presented the first national sustainability strategy back in 2002. It has been developing this strategy every four years since 2004, most recently in 2024, with broad participation from relevant stakeholders and citizens. As of 2016, it was aligned with the United Nations 2030 Agenda adopted in 2015 and its 17 Sustainable Development Goals. The Sustainable Development Goals consider the environmental, economic and social dimensions. The Federal Government emphasises that the promotion of sustainable development is the fundamental “goal and benchmark of government action in all areas and all decisions” in order to “meet the needs of present and future generations – in Germany and in all parts of the world – and to enable them to lead a life in full development of their dignity”. The goal is a progressive, innovative, open and liveable Germany that lives up to its international responsibilities and is characterised by a high quality of life, effective environmental protection and inclusive and integrative policymaking.

In January 2025, the Federal Government at the time published the further development of the German Sustainable Development Strategy (DNS) under the title “Transformation gemeinsam gerecht gestalten” (Shaping transformation fairly together).¹ It defines key areas of transformation – including climate action, social justice and circular economy – and serves as a roadmap for implementing the global sustainability goals. A special focus is on a socially just transition that actively involves all social groups and respects the ecological limits. Resource-efficient and circular use of natural resources is emphasised as an important building block for sustainable business.

In the context of the extraction of natural resources, the topics covered include interventions in nature and landscape, environmental protection, renaturation and recultivation, employment and social affairs, as well as circular economy and corporate responsibility and due diligence. The aim of the German Sustainable Development Strategy is to use resources sparingly and efficiently and thus to increase Germany’s total natural resource productivity. The goal is to achieve an annual increase in natural resource productivity of 1.6% by 2030. In addition, with its National Circular Economy Strategy (NKWS), the German government has set three strategic goals at the end of 2024 with the aim of significantly and permanently reducing the current increase in primary natural resource consumption by 2045. According to the 2025 coalition agreement between CDU, CSU and SPD, the NKWS is to be implemented pragmatically. This signals to the private sector, society and politics that more efforts in the area of the circular economy and an efficient, sustainable, ecologically and socially responsible use of natural resources as a whole are needed. The Federal Statistical Office publishes a set of sustainability indicators to measure the goals of the German Sustainable Development Strategy and the UN Sustainable Development Goals.²

Rules of intervention under nature conservation law

Every mining activity is associated with interventions in nature and landscape and can result in serious environmental impacts. Compensatory actions, such as compensatory or substitution measures according to the Federal Nature Conservation Act (BNatSchG), are intended to offset interventions in nature and landscape and to restore or replace their impaired functions. Only if real compensation is not possible, compensatory payments are to be made, provided that the nature conservation interests are of secondary importance. The compensatory payment shall be earmarked for nature conservation and landscape conservation measures, preferably in the affected natural area.

Overall, it is estimated that just over 1% of Germany’s entire area will be necessary to ensure the country’s natural resources in the medium and long term. On the last key date of 31 December 2023, according to the Federal Office of Statistics, approx. 1285 km², i.e. approx. 0.36% of the area of Germany is used as mining land.¹ In the last 31 years or so, the amount of land required for quarrying in Germany has therefore decreased by over 32% (593 km²). The equivalent in area for the volume of natural resources used in 2023 was just over 26.5 km². In relation to the total area of Germany (357,582 km²), this results in a temporary land requirement of approx. 0.007% of the country’s area for 2023.² The areas used for the extraction of natural resources are concentrated in different regions, which means that there are significant differences in how strong the different regions are affected by the impacts on nature and landscape.

Legal framework

The Federal Mining Act (BbergG) requires the mining operator to take the necessary precautions to reclaim the surface to the extent required by the circumstances (Section 55 (1)(7) BBergG). The term “reclaiming” means proper shaping of the surface used by the mining operation, considering the public interest (Section 4 (4) BBergG). This term covers all activities required for recultivation, without the status quo ante having to be achieved. Within the scope of the obligation under mining law to rehabilitate the area, the obligation that simultaneously exists under nature conservation law to compensate for interventions in nature (Section 13 BNatSchG) may have already been met in the individual case – depending on type and scope of the measures taken for this purpose.³

The Federal Nature Conservation Act (BNatSchG) establishes the general principle that major interventions in nature and landscape are to be primarily avoided and minimised by the polluter (avoidance obligation). Unavoidable interventions are to be compensated by means of compensatory or substitution measures (hereinafter “compensatory measures”) or, if this is not possible, by a compensatory payment in money (Section 13 BNatSchG). It is not possible to deviate from this general principle and the ensuing legal consequences (first the avoidance, then compensatory measures and, as a last resort, a compensatory payment). In the case of mining measures, the avoidance rule primarily targets a variant that is as environmentally friendly as possible. Unavoidable interventions in nature and landscape must therefore be offset or mitigated, particularly through the promotion of natural succession, renaturation, near-natural design, rehabilitation, or recultivation (Section 1(5) p. 4 BNatSchG). Interventions are avoidable if there are reasonable alternatives to achieving the purpose of the intervention in the same place, without or with less impairment of nature and landscape (Section 15 BNatSchG).

Compensatory measures must be maintained and legally secured during the required period. The period of maintenance is determined by the approval authority in the certificate of approval. The perpetrator of the intervention (the polluter) or its legal successor is responsible for the execution, maintenance and safeguarding of the compensatory measures.

In accordance with German federal and European regulations, the possible effects of a project on particularly protected species of animals and plants (special species protection legislation) and on the European protected area network NATURA 2000 is one of the aspects that must be examined in the approval procedures for nature conservation law interventions.

The BNatSchG contains a full regulation, viz. that the laws and norms of the Federal States on the instrumental design of the intervention regulation may not contradict it. To make the regulation more applicable, some Federal States have made supplementary regulations, whereby the practice differs from Federal State to Federal State. For example, the concrete assessment of the amount and the use of compensatory payments differ from Federal State to Federal State. As different biotope type lists are used at Federal State level, the Federal Government produces conversion keys that allow the respective biotope types to be counted.⁴

The Federal Compensation Ordinance (BKompV) provides specific details of the rules of intervention intended under nature conservation law for projects in the area for which the Federal Administration is responsible. It covers public infrastructure projects (e. g. power lines and pipelines, offshore wind farms, waterway projects and usually also Federal autobahns). The objective of BKompV is to standardise the rules of intervention under nature conservation law across all Federal States and make them both more transparent and more effective. Different regulations continue to apply in some countries.⁵

Approval practices in the extraction of natural resources under nature conservation law

If a company plans to intervene in nature and landscape by extracting natural resources, the rules of intervention under nature conservation law are examined at the level of the responsible approval authority. Different laws may apply depending on the natural resource extracted. This depends on which authorities are responsible in a Federal State. A nature conservation authority may be responsible for the extraction of mineral resources that are not subject to mining law or water law (The nature conservation legislation of many Federal States includes specific procedures for extraction e.g. in Saxony-Anhalt⁶). In addition, the mining authorities of the Federal States (in the case of free-to-mine and privately-owned mineral resources or underground extraction) or the Federal State authorities responsible for enforcing the state excavation laws, the building and water management laws or the Federal Immission Control Act (in the case of so-called landowners’ natural resources) may also be involved.⁷ This procedure corresponds to the “piggyback procedure”: The rules of intervention are always examined within the framework of the notification and approval procedure under the specific legislation, without separate administration proceedings. The nature conservation authorities must be involved, and they will give their opinion as nature conservation experts. The responsible approval authority then grants the authorisation taking account of the opinion in “consultation” with the responsible nature conservation authorities (Section 17(1) BNatSchG).⁸ The responsible approval authority, which makes the decision on the legal consequences of the intervention, is not bound by the opinion of the nature conservation authorities that go beyond the legal requirements of the nature conservation laws and the recognised professional standards in nature and species conservation.

It is allowed to differ from these on objective grounds. It is compulsory to comply with the provisions of the specific species protection independently of the rules of intervention. Statutory biotope protection, national and European area protection, like special species protection, are nature conservation concerns that are independent of the intervention regulation and must be dealt with separately.

In the approval procedure, the entrepreneur shall provide a nature conservation expert opinion to the competent authority, in which the contents are processed.⁹ A Landscape Management Plan (LBP) for example provides information on the location, nature, extent, and timing of the intervention, as well as the intended avoidance and compensatory measures and, where required, the amount of the compensatory payment. In this case, a major part of the necessary compensation is to be regularly provided for renaturation or recultivation (see target definition in Section 1(5) sentence 4 BNatSchG).

Compensatory measures on external areas are necessary, for example, if certain landscape or biotope structures at the place of intervention cannot be restored in the same way, if the time that has elapsed between the damage and renaturation is too long or if specific measures are necessary for reasons of biotope protection, protection area or species protection.¹⁰

In the case of the extraction of the so-called “free-to-mine” (e. g. coal, salts, oil, and natural gas) and privately-owned natural resources (e.g. certain industrial minerals) governed by the German Federal Mining Act (BBergG), the intervention regulation is processed as per the BNatSchG in accordance with the operating plan procedure under mining law, whereby the obligations as per the BNatSchG apply in full (see Authorisation of mining projects). Compensation for interventions can in general already take place within the scope of the obligation under mining law to rehabilitate the area (Section 55(1) no. 7 BBergG, Section 1(5) sentence 4 BNatSchG). If this is not possible, compensatory and/or substitution measures or subordinated compensatory payments pursuant to BNatSchG are necessary (see North Rhine-Westphalia (NRW) example below). In the case of procedures which are subject to the Federal Mining Act (BBergG), the legal instruments of the Federal Mining Act are applied, such as (and in particular) regular monitoring based on the main operating plans, which must be submitted and re-approved every two years.

Documentation of compensatory measures for interventions in nature and landscape

Since the amendment of the BNatschG in 2010, German Federal States are obliged to create compensation directories for all interventions in nature. However, these take various forms and are not publicly available in all Federal States.

Example of the transparency of compensation directories in Baden-Wuerttemberg¹¹

The basis for the compensation directory in Baden-Wuerttemberg is formed by Section 17(6) of the BNatSchG and Section 18 of NatSchG BW, the compensation directory regulation (KompVzVO) and the eco-account regulation (ÖKVO) of the State, which provide for the obligation to make documentation available for the public. The latter two regulations can be downloaded from the website of the Baden-Wuerttemberg State Law:

• Compensation Directory Regulation (KompVzVO)
  https://www.landesrecht-bw.de/bsbw/document/jlr-KompVerzVBWrahmen

• Eco-Account Regulation (ÖKVO)
  https://www.landesrecht-bw.de/bsbw/document/jlr-%C3%96koKVBWrahmen

On 1 January 2026, the new KompVzVO enters into force, which in addition to the previous departments “Eco-account” and “Compensation for intervention” stipulates six other departments, including for compensatory measures under planning law (the scope of the collection is regulated by Paragraph 18(2) NatSchG BW) and for Natura 2000-related and species protection-related measures. It is intended that this will provide greater transparency and make it easier to verify these measures.

Besides, impairments of Natura 2000 sites below the significance threshold should also be recorded to better determine possible summation effects (as documented in the so-called summation register), cf. Section 18(3) NatSchG BW.

An eco-account is an instrument for the perpetrators of interventions (polluters). It enables them to decouple compensatory measures temporally and spatially from the extraction site, making the measures more flexible to manage. Compensatory measures can be stockpiled via so-called “eco-points”, which are accumulated by means of the targeted enhancement of external areas through nature conservation. The corresponding eco-points can be allocated for later interventions to compensate for the interventions either in whole or in part.¹² Polluters such as natural resource companies and local authorities are involved here as bodies of measures, consumers, and traders of eco-points.

A central overview of the total number of all interventions in Baden-Wuerttemberg, including their compensatory measures which have been authorised since April 2011, the legal environmental protection eco-account measures and the compensatory measures already assigned to an intervention under nature conservation law can be accessed centrally via the data and map service of the Baden-Württemberg Regional Office for the Environment (Landesanstalt für Umwelt Baden-Württemberg) since autumn 2024.

There, you can view the following information on the nature conservation compensatory measures:

• description of the approval authority and the compensatory measure (brief description),
• file number and date of the approval certificate,
• type of project causing the intervention,
• project developer,
• location of the compensation area,
• measures for the timely implementation of the compensatory measure and the fixed period of maintenance,
• state of the implementation.

The following information on eco-account measures can also be accessed:

• complex of measures
• status,
• natural area,
• location of the measure,
• eco-points.

Compensatory measures on intervention areas and substitute areas are documented in the compensation directory of the Federal State of Baden-Wuerttemberg.

Cooperation between stakeholders

Since each extraction of natural resources can represent a significant intervention in nature and landscape, an environmentally friendly extraction development and technology approach must be standard for companies in this sector. Timely renaturation and recultivation can contribute to the promotion of biological diversity; but operating extraction sites may also sometimes be habitats for rare animals and plants. Cooperation between the extractive companies, the employees there and nature conservationists who are familiar with the area has proven to be useful. This means that operational management can be adapted to local and specific biodiversity requirements. This usually succeeds if the company management and employees are continually involved in dialogue with specialist nature conservation institutions and persons. In the case of expansions or new extraction projects, an early dialogue between the stakeholders can also avoid conflicts before they arise. Information and training materials on the subject help to broaden the impact of initiatives like this, which are supported by strong memberships in the environmental and nature conservation associations, the industrial trade union for the construction, agriculture and environment sectors, and economic associations at Federal Government and Federal State levels.

Abstraction of water for the extraction of natural resources

The abstraction of ground and surface water may be necessary during the extraction and further processing of natural resources. The volumes of water abstracted in Germany for the activities of the natural resources extractive sector are published by the Federal Office of Statistics based on the data of the responsible statistical authorities of the Federal States.¹ An overview is shown in Chart 8 on water abstraction in the extractive sector by Federal State.

The mining and quarrying sector abstracted a total of 1,197 million of m³ of water in 2022 (mainly groundwater). Coal mining accounted for around 75% of this volume. This corresponds to around 7.3% of all water withdrawn by industry in Germany in 2022.² Depending on the regional importance of the extractive sector – especially coal mining – the proportion is higher in some Federal States (in some cases more than 50%).³

Use of water

During the initial development of a deposit of natural resources, the pumping out of groundwater can lead to a lowering of the groundwater level. Water abstractions during extraction of the natural resources may also be necessary e.g. to keep shafts or excavation pits dry. If necessary, this so-called drainage and mine water is treated, purified, seeps away or is reused, if applicable, complying with the approval conditions, e. g. to maintain moist biotopes or introduced into surface water without being used further. The use of water by the mining industry is associated with consequences for the water balance. Environmental impacts may result, inter alia, from changes in groundwater levels, the flow velocity of water bodies and the discharge of marsh and pit water into surface water bodies.

Example: Use of water in potash and rock salt mining

In potash and rock salt mining, water from different origins and of different quality levels including river water, groundwater and drinking water is used in many processes.

Raw salt is mined by means of drilling and blasting in the underground mining of potash and rock salt. However, salt can also be extracted in a brine plant, where fresh water is introduced into soluble (salt) rock by means of a borehole, resulting in the creation of chambers filled with salt water. The salt-saturated water (so-called brine) is then conveyed to the surface via another pipeline. The salt is extracted when the brine evaporates.

Legal framework for water abstraction

An EU-wide legal framework for the protection of water and groundwater was created in 2000 with the Water Framework Directive 2000/60/EC of 23 October 2000 (WRRL). The WRRL stipulates (inter alia) that the costs of water services (including certain water abstractions) and environmental and resource-related costs are covered by the companies abstracting the water, i.e. the polluter-pays principle.⁴ Water abstractions must also be checked for compliance with the general environment targets of the WRRL (see “Permit under water law” under Authorisation of mining licenses). If the volume of ground or surface water abstracted exceeds certain thresholds, environmental impact assessments must be carried out for the projects concerned.

The implementation of the WRRL into national law took place in Germany through the Water Resources Act, which regulates the protection and use of surface and groundwater at national level. Water abstraction procedures are subject to the reservation on the granting of permits by the water authorities. The State Water Acts of the Federal States supplement and concretise the federal water laws.

Structuring of water abstraction fees

The structuring of fees for water abstraction is carried out by the Federal States that receive these fees. This is why water abstraction fees levied in Germany differ widely in 13 out of 16 Federal States. In Hesse, Bavaria, and Thuringia no water abstraction fees are currently levied. The total revenue in the 2024 budgetary plans of the Federal States was estimated at around €452.9 million. These revenues are partly used for water management tasks, or they flow into the general budget of the respective Federal State.⁵

Most Federal States levy consumption-related fees for the abstraction of ground and surface water.⁶ Depending on the individual structure, these fees are also intended to reflect the “value of the public services” for the utilisation of resources and can therefore function as incentive taxes for a sustainable water management programme and for the allocation of environmental and resource costs (Section 1 and Section 6a of the Water Resources Act).

In most Federal States, levy rates differ according to the type of abstraction, volume, origin of the water (surface water or groundwater) and the purpose for which the water is to be used. There are also various state-specific deviations from the relevant rules through exemptions or discounts, and these may also apply to the extractive sector.

Water abstraction fees in the extractive sector

Quite different rates are levied nationwide for the abstraction of water in the extractive sector. For example, fees of between 0.5 and 6 cents/m³ for surface water are applied in some Federal States for certain types of mining operations (e.g. in Baden-Wuerttemberg, Lower Saxony, Mecklenburg-Western Pomerania), while in other Federal States, the fees for groundwater abstraction can range from 5 to 18 cents/m³.

In some Federal States, including Rhineland-Palatinate and Schleswig-Holstein, on the other hand, groundwater excavation is exempt from water abstraction fees. In some Federal States, there are explicit regulations for dewatering operations in mines, or for water that is reintroduced into surface waters without being subsequently used.

The various fee levy rates, exemptions and discount rules are published in the individual State Water Acts or ordinances of the Federal States. The German Federal Environment Agency provides an Overview of the relevant fee levy rates in the extractive sector. However, a publicly accessible source of information on the amount of revenue from water abstraction fees paid by the extractive sector does not exist in all Federal States. Reports on this are regularly given to the State Parliament in North Rhine-Westphalia.

Water abstraction fees represent a flow of cash between companies that extract natural resources and the German State. Due to the different levy rates (inter alia) in individual Federal States, most payments lie below the materiality threshold agreed in the D-EITI, which is why they are not disclosed as a payment flow in the D-EITI reporting. Where companies in the extractive sector have reported water abstraction fees above the materiality threshold of €100,000, these can be found in the BilRUG payment reports.⁷ For 2023, the following companies participating in the D-EITI reported payments of water utilisation fees in accordance with Section 341v HGB: LEAG (Lausitzer Energie Bergbau AG): €1,148,619.49; RWE Aktiengesellschaft €14,249,655.00; MIBRAG Energy Group GmbH: €1,107,670.18.

The extraction of raw materials in Germany results in permanent interventions in nature and landscape. The statutory requirements of the Federal Mining Act guarantee that rehabilitation will be planned at an early stage and taken into account. A balance is achieved between the interests of the extractive sector and the environment in the approval procedure reflecting the Federal State’s plans and mining law. Citizens, the elected political representatives of mining regions together with sectoral authorities, environmental associations and other public interest parties have various opportunities to exercise influence and be involved in co-determination. In general, the principle that the burden on the environment must be kept to the minimum applies to both the planning and operation of mines.

Coal and mining

Rehabilitation during the operational phase

Where rehabilitation is carried out during extraction and processing operations, the areas taken for extraction are generally rehabilitated in parallel to the continuing extraction. In the course of extracting natural resources, the material on the site is piled up and the shape of the land changed whilst adhering to safety requirements. The land is rehabilitated by means of geotechnical, landscaping, hydraulic engineering, agricultural and forestry measures to restore the land usage or biotopes.

The objectives of reclamation and the measures to be taken and requirements to be met for this purpose are defined in lignite plans or the operating plans approved under mining law. Depending on the type of use, the topsoil used for restoration must be “cultivated” and the areas must be gradually looked after and developed:

1. Agricultural rehabilitation includes scientifically tested crop rotation to achieve the rehabilitation of the soil. Once successful rehabilitation is complete, the areas are made available for their subsequent use and released from supervision by the mining inspection authorities.
2. Rehabilitation through forestry aims to establish mixed woodland with a variety of uses. Depending on site conditions, native species of trees dominate an effective mix of broad-leaved trees and conifers.

Elements to benefit nature are incorporated to support integrated and widespread nature conservation, e. g. planting native trees, including dead wood and other small structures, hedge planting, planting solitary trees, including wild fruit, creating dry biotopes and wet scrapes, retention of small unplanned areas and small areas of succession sites. This work is undertaken according to locally recognised methods and in close cooperation with the specialist nature conservation authorities. It will still be necessary to dewater the surface, build paths and contour the surface for optimum site restoration in order to facilitate functional use after extraction has finished.

Rehabilitation during the closing-down phase

Once the natural resources have been extracted, renaturation will be undertaken in accordance with the specification in the final operating plan. In the large majority of cases, a remaining lake exists at the end once open-cast lignite mining has finished. The needs of future use after mining will be taken into account in the completion work, providing it has been agreed with future users before the mine was authorised. Underground coal mining has finally ceased in Germany since the end of 2018. After the cessation of hard coal extraction, the operator will withdraw from the operating buildings. Mechanical equipment, operating materials, pipelines and other operating equipment have to be dismantled and removed from the mine site. In addition, the isolation of mine fields and the backfilling of extraction holes may be necessary. Besides, waste must be disposed of properly. As a rule, the withdrawal from an underground mine site is followed by a rise in mine water. The mine water level must often be limited by removing excess water to avoid any risk to aquifers used to extract drinking water. This usually requires conversion work in mining shafts to be able to resume mine water extraction in due course to limit the rise in mine water.

Land used for mining activities above ground shall also be properly reclaimed with due regard to the public interest. Here, too, operational facilities and equipment must be dismantled, provided that they are not to be used later for any other purpose. If the result of a risk assessment indicates a need for remediation, any necessary remediation or safeguarding measures are planned and then implemented. Waste rock piles must also be made usable again so that they do no longer pose a danger even after filling of further material has stopped to enable a duly planned subsequent use.

Any temporary storage or outside heaps created during mining operations are removed or recultivated. Once checks have been carried out to ensure that the soil is safe, waste that had accumulated in heaps since the start of mining is recultivated to form features such as landmarks and also to meet regional planning criteria.

Employment in the natural resources sector

The extractive industry provides industrial jobs in a variety of different occupations and activities. At the end of 2023 (2024), around 58,000 people (56,000 people)¹ were employed in the extractive industry. This corresponds to around 0.17% (0.16%) of all employees in Germany subject to social security contributions. At around 65% (66%), most employees worked in the quarrying and other mining sector, followed by the provision of services for mining and quarrying at around 15% (16%).

Role of the legislator

In principle, the German legislature regulates a uniform (minimum) level of protection for employees (e.g. working hours, holidays, protection against dismissal, protection laws for young people, pregnant women or the severely disabled, safety and health at work, etc.).² Above this level of protection, the social partners are free to regulate working conditions independently for the company or the respective sector within the framework of their collective bargaining autonomy guaranteed by Article 9(3) of the German Basic Law.

Statutory social security provides protection against life risks such as unemployment, illness, dependency on nursing care, accident and occupational disease as well as old-age security. In particular, employees are insured under the social security scheme; self-employed persons are partially covered by this scheme. Social insurance funds are mainly raised through contributions from insured persons and employers. An exception is the statutory accident insurance, which is financed exclusively by the employer. Some branches of social security are additionally financed by taxes. The social security institutions are corporations with legal capacity under public law with self-government. Self-government is generally exercised by the insured persons and the employers.

The role and cooperation of the social partners

Co-Determination

One of the main pillars of the social market economy in Germany is co-determination, i.e. the right of employees and their stakeholders to participate in company or entrepreneurial decisions. The scope and form of participation differ according to company size, legal form and industry.

Company co-determination goes furthest in mining and in the iron and steel producing industry (Co-determination in the coal, iron and steel industry: (MontanMitbestG (Act on Co-Determination in the Coal, Iron and Steel Industry)³, MontanMitbestGErgG (Supplementary Co-Determination Act)⁴): Here, the supervisory boards are made up of an equal number of shareholder and employee representatives. In addition, a labour director is appointed, who is responsible for personnel and social affairs as an equal member of the management. According to the MontanMitbestG, his/her appointment is subject to the approval of the majority of employee representatives in the supervisory board.

For other companies, which are managed in the legal form of a corporation or a cooperative, the equal representation of employees and shareholders in the supervisory bodies according to the Co-Determination Act (MitbestG) also applies in case of more than 2,000 employees. However, there are two significant differences compared to the co-determination in the coal, iron and steel industry.

If there is a tie in votes, the Chairman of the Supervisory Board, who is generally attributable to the shareholders, has the casting vote. This dual voting right of the Chairman of the Supervisory Board effectively overrides the formal parity between employees and employers. In addition, the labour director can in principle also be appointed against the votes of the employee representatives on the supervisory board. To companies with 500 to 2,000 employees, the one third participation of employee representatives on the supervisory board (DrittelbG⁵) applies.

Company co-determination is governed by the Works Constitution Act. In every company in Germany with at least five employees, employees have the right to elect a works council. As representative of all employees, the works council represents the interests of the employees vis-à-vis the employer. It has different rights of participation, especially in social, personnel and economic matters. Works agreements are a key instrument in the work of the works council. Similar to collective agreements, they are legally binding agreements between the employer and the works council and regulate the employment relationship of the employees. Frequent topics are regulations on working hours, occupational health and safety, health promotion, data protection or further training, which are tailored to the conditions prevailing in the company. However, the works council must also be involved in the introduction of new technical equipment and work processes or the drawing up of social plans in the event of planned operational changes.

Collective bargaining coverage

Freedom of association and the right to collective bargaining are guaranteed in Germany by Article 9 of the Basic Law. Collective agreements are concluded by one or more employers or employers’ associations with one or more trade unions. They are binding only on their members (collective bargaining coverage). However, it is common practice for employers bound by collective agreements to allow employees who are not unionised to participate in what has been agreed by collective agreement by referring to the relevant collective agreements in individual contracts. In addition, many companies that are not bound by collective agreements are guided by existing collective agreements. In 2023 (2024), 39% (28%) of the companies in the extractive sector⁶ were bound by collective agreements; 28% (20%) within the framework of a regional collective agreement and 8% (in 2024) with a company collective agreement.⁷ In 2024, the collective agreements apply to 59% of employees in the sector, with 21% subject to the terms of a regional collective agreement and 37% subject to those of a company collective agreement.⁸

Training

The demanding activities in the extractive industry require well-trained specialist personnel. In the years 2023 (2024), approximately 74% (75%) of employees had a recognised vocational qualification⁹, and another 11% (12%) had an academic degree¹⁰ in, for example, engineering.

Vocational training in Germany is essentially carried out via the dual vocational training system, in which trainees acquire practical competences at the same time as they work in the company and are taught general and theoretical knowledge at the vocational school. The duration of training depends on the respective profession and varies between two and three and a half years. During this time, the trainee receives a training allowance from the company. After successful completion of the training, you are qualified to work directly as a qualified specialist.

The sector provides training in a number of different professions. These include, for example, mechatronics technicians, electronics technicians, industrial and process mechanics, reprocessing mechanics, miners and machine operators, mining technologists and industrial clerks. At the reporting date¹¹, 1,998 (1,909) of the employees in the extractive industry were trainees, which corresponds to a training rate of 3.4% (3.4%). The training rate in the sector was therefore below the German average of 4.5% (4.6%). Looking at individual sectors, the picture for the extractive industries is relatively differentiated. For example, the training rates in the mining and quarrying industry fluctuate (from 0.8% (0.5%) to 4.9% (4.3%) (2023 (2024)) because the importance of training occupations varies and the proportion of semi-skilled workers varies accordingly.

Level of earnings

The average gross monthly earnings of full-time employees in the sector amounted to €4,951 per month in 2024, with an additional €742 per month in special payments.¹⁷ This means that average monthly earnings in the extractive sector are a good 9.5% higher than the average in the manufacturing and service sectors.¹⁸ Due to the income tax to be deducted and the proportionate social security contributions to be paid, employees’ individually disposable net wages are significantly lower than their gross wages.¹⁹

The average paid weekly working time was 40.5 hours, which was relatively high compared to the manufacturing industry and service industry as a whole, at 38.9 hours.²⁰

In Germany, equality between women and men is protected by constitutional law. A key component of this is the requirement of equal pay for women and men for equal work and work of equal value. This means that gender-specific income differences in particular must be further reduced. This is also the aim of the Act on the Promotion of Pay Transparency between Women and Men (Pay Transparency Act (Entgelttransparenzgesetz (EntgTranspG))). Among other things, it includes an individual right to information for employees, reporting obligations for large companies and the requirement for large private employers to carry out company audit procedures to review pay structures.

The planned further development of the Pay Transparency Act will also take into account the EU Pay Transparency Directive, which entered into force in June 2023. The directive must be transposed into national law by June 2026. In 2024, the average gross monthly earnings of €5,900 of women in the extractive industry were 3.6% higher than the average gross monthly earnings of male employees (€5,669).²¹

Diversity and equal opportunities

The different life experiences and work horizons of employees make a significant contribution to the economic success of companies. By consciously promoting diversity, companies can tap into an important success and competitive factor that has a positive impact on both companies and their workforces.

Diversity can be measured using a range of quantitative indicators, such as the proportion of women among all employees and managers, the proportion of foreign employees or the age structure of the workforce.

At the end of 2023 (2024), the proportion of women among those employed in the sector subject to social security contributions was 13.7% (13.7%). Foreign nationals accounted for 6.7% (7.2%) of the total workforce.²²

The proportion of female supervisory board members in the mining industry is very low at 20.3% (2022 financial year). Of the management board members of these companies, only 14.3% are women. Details of publicly available data on the participation of women in management and the two highest levels of management, as well as on the supervisory board of companies reporting to D-EITI, are disclosed at [Link] . In order to further increase the proportion of women in the workforce and in management positions, there is also a great need for action compared to other sectors. It should be noted that the employment structure is traditionally characterised by male-dominated technical training occupations and degree courses.²³

At 61.4% (2023) (61.1% (2024)), the 25 to under 55 age group made up by far the largest proportion of the workforce, followed by the 55 to under 65 age group at 30.1% (2023) (29.9% (2024)). 7.4% (2023) (7.4% (2024)) of the employees were younger than 25 years and 1.3% (2023) (1.6% (2024)) of the employees were older than 65.

Equal opportunities in Germany are promoted by the General Equal Treatment Act (AGG) . It prohibits discrimination in employment on grounds of race or ethnic origin, sex, religion or belief, disability, age or sexual identity. The Federal Ministry for Education, Family Affairs, Senior Citizens, Women and Youth (BMBFSFJ) provides continuous information on its website on key aspects of gender equality policy in Germany.

Importance

Protecting natural resources, the economical use of raw materials and the extraction of secondary raw materials¹ from waste or residues are of great importance not only for humans and the environment, but also for the German industry, which depends on imports for a number of the raw materials it needs (see Security of supply). Substituting primary with secondary raw materials also often results in significant savings, for example in energy consumption.²

Against the background of the increasing global demand for raw materials, but also the challenges in the context of climate change, a circular economy, in which the product design itself already aims for raw material cycles that are as closed as possible, with little material loss as well as a reduction of greenhouse gas emissions and energy consumption, is becoming more and more of a focal point. In December 2024, the Federal Government adopted the National Circular Economy Strategy (NKWS) (see Section e).³

According to the Status Report on the German Circular Economy 2024, there is a comprehensive network of more than 14,337 pretreatment, treatment, sorting and processing plants for the recycling of waste in Germany, in particular for recycling, which in addition to chemical­physical, biological and mechanical processing plants also includes soil treatment plants, construction waste treatment plants, sorting and dismantling plants, and similar. However, this infrastructure is not equally well developed for all raw materials. There are gaps, especially when it comes to critical raw materials such as lithium, cobalt or rare earths. Battery recycling is also under development. The recycling industry provides jobs for around 315,000 employees in around 10,000 municipal and private enterprises and generates revenues of around € 105 billion. The gross value added amounts to about € 33 billion.⁴

Legal bases

Environmental pollution, the shortage of landfills in the 1980s and the increasing awareness that natural resources and energy sources are valuable, finite resources have triggered a modern circular economy. The aim of a modern circular economy is to ensure a sustainable use of recyclable materials through, for example, a product design that allows for recycling, durable, repair-friendly and easily recyclable products and the decoupling of waste volumes from economic output. These objectives are largely pursued by the Circular Economy Act (KrWG) based on the EU Waste Framework Directive 2008/98/EC . The Law on Promoting the Circular Economy and Safeguarding the Environmentally Sustainable Management of Waste (Circular Economy Act, KrWG) is the core regulation of waste legislation. In addition, there are requirements for the product design of certain products with regard to energy and resource efficiency within the framework of the Ecodesign Directive and, in future, the Ecodesign Regulation. Other regulations apply to specific products, such as the Electrical and Electronic Equipment Act (ElektroG) or the Packaging Act (VerpackG).
An essential element of the KrWG is the so-called five-stage waste hierarchy, which applies to waste owners and producers in the following order: 1. Prevention, 2. Preparation for reuse, 3. Recycling, 4. Other recovery – in particular energy recovery (incineration) and backfilling, 5. Disposal (landfill). In order to promote recycling and other material recovery, Section 14 of the KrWG imposes recycling quotas.

One component of German waste law is transferring product responsibility to manufacturers and distributors, who must ensure that the generation of waste is reduced from product development through production to use and that environmentally sustainable recovery or disposal is ensured. In addition, Germany banned the disposal of untreated municipal waste in landfills in 2005 in order to significantly reduce the generation of greenhouse gases that are harmful to the climate from landfills.
The EU Ecodesign Regulation⁵ entered into force on 18 July 2024 and allows for requirements regarding the design of products with regard to durability, recyclability and other resource efficiency aspects. If products falling under this regulation do not comply with these requirements, they may no longer be marketed in the EU. Under the Ecodesign Directive, there are already a number of product requirements regarding durability and repairability in place for some products where energy consumption is a concern, such as white goods and smartphones.

The Electrical andElectronic Equipment Act (ElektroG), which was last amended on 1 January 2022, and the Ordinance on the Treatment of Waste Electrical and Electronic Equipment (EAG­BehandV) provide the legal framework for implementing product responsibility for electrical equipment. The law is intended to implement the EU legal requirements of Directive 2012/19/EU on waste electrical and electronic equipment. From 2019 onwards, the Directive requires a collection rate of at least 65% of the average quantities of electrical and electronic equipment placed on the market in the previous three years.

The amendment to the Packaging Act⁶ also added further provisions with regard to packaging under the existing extended producer responsibility system. Since 1 January 2023, for example, final distributors must also offer reusable packaging alternatives when selling food for immediate consumption in disposable plastic packaging and so­called “to go” disposable beverage cups. Furthermore, certain single-use plastic beverage bottles must include a minimum amount of recycled material since 1 January 2025. The new European Packaging Regulation (Packaging and Packaging Waste Regulation, PPWR)⁷ entered into force in February 2025 and requires an amendment to the German packaging legislation by mid-2026. The PPWR also prescribes a minimum recycled material content for plastic used in packaging.

On 3 July 2019, Directive (EU) 2019/904/EU on the reduction of the impact of certain plastic products on the environment (Single-Use Plastic Directive) entered into force. The objective of this Directive is to prevent and reduce the impact of certain plastic products on the environment, in particular the marine environment, and on human health, and to promote the transition to a circular economy with innovative and sustainable business models, articles and materials and to thereby also contribute to the smooth functioning of the internal market. The Directive sets out a number of measures to reduce the consumption of certain single-use plastic products, to limit the careless dumping of these products in the environment and to improve the management of the resource “plastic”. In the context of implementing the Directive as national law, the Ban on Single-Use Plastics Regulation (EWKVerbotV)⁸ started by prohibiting the circulation of certain single-use plastic products (e.g. cutlery, plates, straws made of plastic and “to go” packaging and cups made of expanded polystyrene). Environmentally friendly alternatives already exist for these single-use plastic products. The Single-Use Plastics Labelling Regulation (EWKKennzV)⁹ stipulates that certain single-use plastic products placed on the market must have a label either on the packaging or on the product itself, which should inform consumers that the products in question contain plastic, which forms of disposal must be avoided and what environmental consequences improper disposal has. In addition, single-use beverage containers made of plastic may now only be placed on the market if their plastic closures and lids are firmly connected to the container for the entire time the product is used. The Single-Use Plastic Fund Law (EWKFondsG)¹⁰ is the final step in implementing the EU Single-Use Plastics Directive into national law. Extended producer responsibility is introduced for certain single­use plastic products (such as to-go-food containers, bags and foil packaging, beverage cups and containers, light carrier bags, wet wipes, balloons and plastic tobacco filters (filter products)). A key element is the creation and management of a single-use plastics fund.¹¹ The producers of affected single-use plastic products pay a contribution into the fund each year. The fund is used to reimburse public waste management services and other legal persons under public law entitled to receive compensation for the costs they incurred in relation to waste management and cleaning services provided to the public and to fund activities to raise awareness. These costs have so far been borne by the general public. The first contribution is due in 2025 on the basis of the quantity of products placed on the market in the calendar year 2024.

As of 1 January 2021, the regulations governing the export of plastic waste from the EU were tightened via amendments to the European Waste Shipment Regulation in order to manage the global waste stream better. It prohibits the export of hazardous plastic waste and non­hazardous plastic waste that is hard to recycle from the EU to non­OECD countries. The export of non­hazardous plastic waste that is easier to recycle from the EU to non­OECD countries is subject to further restrictions in accordance with Regulation (EC) No 1418/2007.
The Substitute Building Materials Regulation¹², as part of the General Regulation of the same name, has been setting out uniform and legally binding requirements for production, quality assurance and installation of mineral substitute building materials in technical buildings across the country in 2023. Mineral substitute building materials within the scope of the Regulation are, for example, recycled building materials based on construction and demolition waste, slag from metal production and ash from thermal processes. The Substitute Building Materials Regulation supports the objectives of a circular economy. Furthermore, it aims to increase acceptance of the use of substitute building materials.

Waste volume and waste recovery

A gross total of 399.1 million tonnes of waste were generated in Germany^13,14 in 2022, a further decline from the current peak in 2018 (417.2 million tonnes). Construction and demolition waste accounts for just over half of total gross generation (about 54.2%) with 216.2 million tonnes. Municipal waste generation amounted to 48.6 million tonnes, secondary waste (waste from waste treatment plants) to 57.1 million tonnes and other waste generation, mainly from manufacturing and trade, added up to somewhat less with about 48.6 million tonnes. Around 28.6 million tonnes of waste were generated with the extraction and treatment of mineral resources.

About 326.6 million tonnes of waste were recovered in 2022, of which 280.0 million tonnes were material and 46.6 million tonnes were energy-related.¹⁵ The recovery rate of all waste has remained stable at 82% in recent years (2022). The recovery rate measures the proportion (input) of the waste collected that undergoes a material or energy recovery process. The (input­oriented) rate of recycling, i.e. the proportion of waste recycled or processed to be reused, has remained stable at around 70% in recent years.¹⁶

The amendment to the EU Waste Framework Directive (2018) introduced a new (output­oriented) calculation method. The recycling rate is no longer based on the amount of waste sent to recovery facilities (input amount) but on the amount of material that is actually recycled (output amount, after removal of non-recyclable material). Recycling figures achieved under the new procedure are only gradually becoming available; the first calculation for 2020 assumes about 53%.

Examples of recycling and utilisation rates¹⁷

In Germany, there are several institutions that regularly report on recycling and utilisation rates and that provide data. An up-to-date collection, analysis and publication of relevant data on waste management, in particular recycling, is available from the following institutions:

• Federal Ministry for the Environment, Nature Conservation, Nuclear Safety and Consumer Protection (BMUV)
  Regularly publishes overviews of statistics on individual sectors of waste management.¹⁸ One example is the reporting to the European Commission under the WEEE Directive on waste electrical and electronic equipment. In 2022, the recycling rate for waste electrical and electronic equipment was 83.8% and the recovery rate was almost 98%. However, in 2022, only just under 32% of the average amount of waste electrical and electronic equipment placed on the market in the previous three years was actually collected. In order to increase this volume and to reach the target collection rate of 65% set by the EU since 2019, further development of the Electrical and Electronic Equipment Act is needed, for example to foster increased awareness of the population for the separate collection of electrical waste through standardised consumer information.¹⁹
• German Federal Environment Agency (UBA)
  Publishes regular reports and statistics on waste management and recycling rates for various materials, including plastics and other waste. It also carries out analyses on the development of recycling and recovery rates and makes this information publicly available.
  “With just under 70% of waste recycled and almost 12% recovered for energy purposes, Germany recovered just under 82% of the waste generated in 2022. The municipal waste recycling rate in 2022 was 68%.”²⁰
• Federal Statistical Office: Environmental statistics surveys
  The Environmental Statistics Act (UStatG) forms the legal basis for establishing official, annual statistics on waste management. For example, waste generation is differentiated by industrial sector (see references in section c) and waste electrical and electronic equipment by product category.
• Central Packaging Register (ZSVR)²¹
  Monitors and controls the packaging waste management system and reports annual recycling rates for packaging from dual systems collections.²²
  In 2023, the dual systems achieved five out of eight recycling targets, and in some cases even exceeded them. These include ferrous metals, aluminium as well as paper, cardboard, cardboard (PPK) and plastics. In total, around 5.5 million tonnes of used packaging (all material groups) from private end-use were recycled in 2023 (corresponding to an overall recycling rate of around 90%).²³ In the case of materially recovered (recycled) plastic packaging, the share increased from 42.1% to 68.9% between 2018 and 2023.²⁴
• The Federal Institute for Geosciences and Natural Resources (BGR) / German Natural Resources Agency (DERA)
  The annual BGR report on the natural resources situation in Germany provides a structured overview over utilisation rates for refined and crude steel production in Germany. In 2022, about 85% of lead, 58% of aluminium, 46% of crude steel, 40% of copper and 18 % of zinc came from the supply of recycled raw materials.
  In a recent study, DERA examined the status quo of the German metal-producing recycling industry and summarised it in an interactive map, metal-related factsheets and a short study.
• Business associations (example)
  The Federal Association of the Waste, Water and Raw Materials Resources Industries (BDE) is one of the most important associations for waste management and recycling in Germany. Together with numerous other stakeholders, it regularly publishes a summary of the state of the circular economy in Germany in the Status report on the German circular economy (2024) (see section a).
  The association Circular Economy CONSTRUCTION reports on mineral construction and demolition waste which accounts for a large share of the waste generated. The construction sector recovers around 90% of non-hazardous mineral construction and demolition waste. In 2022, 75.3 million tonnes of recycled building materials were produced by processing mineral building materials. 47.6% of these were used in road construction, 24.4% in earthworks, 8.7% for other applications (including landfill construction) and 19.3% as aggregates in asphalt and concrete production.²⁵

A wide range of different mineral resources and energy resources is mined in Germany. The following tables list the natural resources extracted in Germany by quantities and estimated value in 2023.

Further information on data sources as well as links to original data are available here: Data on natural resource extraction in Germany

Climate change poses major challenges for players in politics, industry and civil society worldwide. Due to international and national plans to reduce emissions of climate-damaging greenhouse gases, the extractive industry must make a decisive contribution to achieving the goal of climate neutrality. The energy transition will have a significant impact on demand and sales of coal, oil and gas and will initiate or accelerate structural change in these industries. At the same time, the demand for natural resources for climate-neutral technologies, renewable energies, electric mobility and hydrogen is increasing (see Security of supply).

The Federal Republic of Germany is bound by various international guidelines to tackle climate change. In the Paris Climate Agreement of 2015, the global community agreed for the first time in a legally binding manner to limit global warming to 1.5° Celsius compared to the pre-industrial age. The European Union has also set concrete targets with the European Green Deal (“European Climate Law”). The core element of all agreements is a massive reduction of greenhouse gases to reduce emissions in the EU by at least 55 % by 2030 and achieve the EU’s greenhouse gas neutrality by 2050.

Legal base

To fulfil the obligations of climate protection, the Federal Republic pursues a national climate policy¹, as a result of which a number of laws have been passed in recent years

Federal Climate Protection Act

The new Federal Climate Protection Act introduced in 2019 sets the legal framework for Germany’s climate policy. It sets out the German climate protection targets in law and contains a review and follow-up mechanism to ensure compliance with the climate protection targets.

The 2021 amendment² adopted new, more ambitious climate protection targets with the aim of achieving net greenhouse gas neutrality³ in Germany by 2045. The interim targets are to reduce greenhouse gas emissions by at least 65 % by 2030 compared to 1990 levels and by at least 88 % by 2040. In addition, the land use, land use change and forestry (LULUCF) sector is to be gradually developed into a reliable dip to -25 million tonnes in 2030 and to -40 million tonnes of CO2 equivalents in 2045. The 2024 amendment⁴ abolished binding targets for reducing greenhouse gas emissions for individual sectors, removing the obligation for these sectors to submit a sector-specific immediate action programme if targets are missed. In future, a cross-sectoral, multi-year overall calculation will be the basis for further climate protection measures as part of the follow-up. To this end, cross-sectoral annual emission totals have been introduced. The focus is now on whether greenhouse gas emissions will be reduced overall, regardless of the area in which the greenhouse gases are generated. In addition, the switch from prior-year estimates to projection data has resulted in a more forward-looking approach. At the same time, each of the energy, industry, buildings, transport, agriculture and waste management sectors must continue to make its own appropriate contribution. The basis for determining this contribution is the annual emission volumes of the individual sectors.

The Federal Climate Protection Act provides for a review and readjustment mechanism to ensure compliance with the total annual emissions in the respective decade. By 15 March of each year, the Federal Environment Agency publishes the previous year’s greenhouse gas emissions data⁵ and the projection data⁶ for all individual years up to 2030 and at least for the years 2035, 2040 and 2045. These will be reviewed by the Expert Council for Climate Issues (ERK). If, for two consecutive years, the projection data show that the total annual emissions for the years 2021-2030 have been exceeded, and if this information is confirmed by the Federal Council, the Federal Government must adopt further climate protection measures to ensure compliance with the total annual emissions (see Section 8 (1) and (2) KSG [Climate Protection Act]).

According to the Expert Council for Climate Issues, the projection data for 2025 does not show an exceedance of the total annual emissions for the years 2021 to 2030.⁷ The interim target for 2030 of a reduction of at least 65 % compared to 1990 will fall just short of being achieved according to the projection data for 2025, but it is still within reach at 63 %.⁸

The Climate Protection Act requires a climate protection programme that contains an overall plan of the federal government for climate protection policy and concrete measures.⁹ The measures for industry include the promotion of low-emission technologies, the introduction of CO₂ pricing systems, support for the research and development of sustainable technologies and financial incentives for the modernisation of industrial production processes.

The Climate Protection Act obliges the Federal Government to adopt a climate protection programme within twelve months of the beginning of a legislative period, irrespective of whether the emissions and projection data are exceeded or not (Section 9 KSG).

In July 2022, the Bundestag launched a comprehensive package of measures to improve planning and approval procedures for onshore wind energy. For example, the Act to Increase and Accelerate the Expansion of Onshore Wind Energy Systems was passed as a key component in further accelerating the expansion of onshore wind energy. This law introduces the Wind Energy Area Requirements Act (WindBG) and amends the Building Code, among other things. The main content of the regulation is a target area for onshore wind energy, which is to be implemented by the federal states. In addition, the amendments to the Federal Nature Conservation Act have standardised and simplified the assessment of onshore wind turbines in terms of species protection during the permit procedure. Moreover, the Federal/State Working Group on Soil Protection (LABO) has published a guideline on the “Soil protection requirements for the dismantling of wind turbines”.

National certificate trading for fuel emissions / EU fuel emissions trading

The European Emissions Trading System has been in place since 2005, setting a Europe-wide CO2 price for the energy sector, energy-intensive industries and intra-European aviation. The heating and transport sectors have not yet been included. This changed with the introduction of national fuel emissions trading in accordance with the Fuel Emissions Trading Act (BEHG) on 1 January 2021. The BEHG obliges companies that place fuels (heating and motor fuels) on the market to purchase emission allowances and surrender them by 30 September of the following year. The costs are usually passed on along the supply chain. As a result, the CO₂ price has a steering effect on end consumers, as more climate-friendly alternatives become increasingly attractive as prices rise.

For the introductory phase from 2021 to 2025, the legislator has provided for a fixed price system (see Section 10 BEHG). With a reliably increasing price path, citizens and business should be gradually introduced to the CO₂ price. At the same time, a trading platform for auctioning certificate trading is being set up. In 2025, an emission certificate will cost EUR 55.  From 2026, the auction phase will begin, for which a price corridor of EUR 55 to 65 is planned as a transition to free price formation on the market. The revenues from the fuel emissions trading flow into the Climate and Transformation Fund (KTF) and are used to finance technology promotion and climate protection measures in Germany, as well as to refinance electricity price compensation and carbon leakage compensation under the BECV. Companies affected by competitive disadvantages resulting from national emissions trading can receive financial relief under this regulation but must invest in climate action measures in return.¹⁰

From 2027, the fuels covered in the nEHs will be largely transferred to the newly created EU fuel emissions trading scheme under Directive 2003/87/EC.

Heat Planning Act

The Heat Planning Act, which came into force on 1 January 2024, introduces systematic heat planning throughout Germany. The aim of the law is to make a significant contribution to the transition to a greenhouse gas-neutral heat supply by 2045 at the latest. This is to be achieved through coordinated planning and development of local energy infrastructures required for the heat supply and a switch to renewable energies, unavoidable waste heat or a combination of these sources.

The law obliges the federal states to draw up or have drawn up heating plans that provide citizens and businesses with guidance on which heating supply option is most suitable in their area. As a rule, the federal states will transfer this obligation to the municipalities. The heating plans should be available by mid-2026 (municipal areas with more than 100,000 inhabitants) or mid-2028 (other municipal areas) at the latest. Possible heat supply options include a central supply via heat networks or a decentralised supply, for example with heat pumps or biomass heating.

The Heat Planning Act ensures strategic planning at municipal level, while the GeoBG (09/2024 in draft form see below) ensures that technological options can be implemented in reasonable time periods. These laws complement each other and thus contribute to meeting the Federal Government’s climate targets and ensuring a sustainable, climate-friendly heat supply.

Geothermal Acceleration Act (GeoBG)

The draft law to accelerate the expansion of geothermal systems, heat pumps and heat storage facilities (GeoBG) takes up the mandate from the coalition agreement “to initiate an improved Geothermal Acceleration Act as soon as possible”.

The draft on the one hand implements the Renewable Energy Directive (RED III). On the other hand, the authorisation procedures for the generation, storage and transport of heat are generally accelerated, simplified and digitised. The draft was discussed in the Bundestag in autumn 2024 but was not implemented before the re-elections, which resulted in discontinuity.

The aim of the draft law is to remove regulatory barriers to the development of geothermal energy and the expansion of heat pumps that use lake and river water, wastewater, unavoidable waste heat, or even air, as well as heat storage systems and heat pipes. To this end, amendments are being made to mining, water and nature conservation legislation and to legal protection procedures.

The draft law was adopted by the Cabinet on 6 August and is expected to enter into force in January 2026.

Coal Phase-Out Act

The key regulations for the German coal phase-out are set out in the Act on the Reduction and Termination of Coal-fired Power Generation (Act to Reduce and End Coal-Fired Power Generation – KVBG), which came into force in August 2020 as part of the Act on the Reduction and Termination of Coal-fired Power Generation and the Amendment of Other Acts (Coal Phase-out Act). At the same time, other energy industry regulations were amended in the Coal Phase-out Act – such as the German Energy Act, the Greenhouse Gas Emissions Trading Act, the Renewable Energy Sources Act, the Combined Heat and Power Act, etc. The aim of the KVBG is to reduce the generation of electrical energy from coal in Germany in a socially responsible manner, gradually and as steadily as possible, and to phase it out by 2038 at the latest. In October 2022, the Federal Ministry for Economic Affairs and Climate Action, the Ministry of Economic Affairs, Industry, Climate Action and Energy of the Federal State of North Rhine-Westphalia and RWE AG agreed on key points for bringing forward the coal phase-out by eight years to 2030 in the Rhenish coalfield area. The law to accelerate the lignite phase-out in the Rhenish coalfield area, which came into force in December 2022, made the early phase-out binding. The aim is to reduce greenhouse gas emissions. At the same time, a secure, affordable, efficient and climate-friendly supply of electricity to the general public should continue to be ensured. The legislative package contains provisions to reduce and end coal and lignite-fired power generation, to continuously review the security of supply, to cancel CO2 certificates that become available and for an adaptation payment for older employees in the coal sector (see Subsidies and tax concessions).

The reduction in hard coal-fired power generation will initially take place gradually between 2020 and 2026 through competitive tenders for hard coal plants already participating in the electricity market.¹¹  This process was approved by the European Commission on 25.11.2020.¹² In the tendering process, the plant operators specified a bid value at which they were prepared to refrain from firing coal in their plant. By participating in the competitive process, plant operators were able to receive appropriate financial compensation for phasing out hard coal. Small lignite-fired power plants up to 150 megawatts (MW) were also able to participate in the tenders. This should enable the defined target dates of 2022 (15 gigawatts (GW) each of hard coal and lignite), 2030 (8 GW of hard coal, 9 GW of lignite) and 2038 (zero GW) to be achieved. The possible maximum price per reduced MW fell from EUR 165,000/MW (2020) to EUR 89,000/MW (2026). In the event that the statutory reduction targets for hard coal capacities are not achieved, the tendering process will be accompanied by regulatory provisions from 2024. From 2027, closures in the hard coal sector will be carried out exclusively on the basis of regulatory provisions.

To reduce and end lignite-based electricity generation in Germany, the KVBG sets out a binding plan for the decommissioning of lignite plants. Among other things, it contains mandatory decommissioning dates and regulations on compensation for the operators of decommissioned lignite plants. Accordingly, RWE will receive EUR 2.6 billion and LEAG will receive EUR 1.75 billion. The statutory regulations are accompanied by a public law agreement in which – among other regulations – the lignite operators have committed to the socially responsible decommissioning of all power plants. In accordance with Annex 2 of the Act to Reduce and End Coal-Fired Power Generation (KVBG), the decommissioning dates for the individual lignite-fired power plants range from 2020 to 2038. The agreement also contains provisions on the use of the compensation payments to cover and secure the post-mining costs as well as a comprehensive waiver of legal remedies by the operators of the lignite plants. In the Lausitz coalfield, compensation payments are made to special purpose vehicles that were set up as part of precautionary agreements between the lignite operator and the states of Brandenburg and Saxony (see Managing human intervention in nature and landscape). From 2025, the annual compensation instalments attributable to the respective special purpose vehicle are to be contributed to the special purpose vehicles by the federal government. The additional contributions made by LEAG in the years 2021 to 2024 can be partially reimbursed by the Federal Government.

On 2 March 2021, the European Commission initiated a main investigation procedure under state aid law into the appropriateness and proportionality of the compensation payments to RWE and LEAG.¹³ The compensation to RWE has already been approved by the European Commission on 11 December 2023. In the case of LEAG, the Commission agreed in principle, but is making its final decision conditional on certain conditions: For payments after 2030, the company must prove that it would have been possible to continue operating the power plants economically. The ongoing investigation has no suspensive effect on the agreed decommissioning path for the power plants. The European Commission has procedural sovereignty.

Structural Strengthening Act

The Structural Strengthening Act for Coal Regions came into force at the same time as the Coal Phase-out Act in order to mitigate the economic and structural consequences of the phase-out of coal-fired power generation and to promote economic growth in the coal regions (Structural Strengthening Act).¹⁴

An essential part is the new Coal Regions Investment Act (InvKG). Within the framework of the InvKG, the Federal Government is providing the coal regions with around EUR 40 billion for structural change. A first pillar is financial support for projects in the federal states affected by the coal phase-out. A total of up to EUR 14 billion is available for this purpose, which can be used to fund investments in lignite mining areas with up to 90 %. The possible applications are wide-ranging and range from the promotion of business-related infrastructure to tourism projects, research facilities, digitalization, urban and regional development and climate and environmental protection measures.

A second pillar covers the support of measures that fall within the exclusive competence of the federal government. Up to EUR 26 billion have been earmarked for this purpose. As part of these measures, for example, transport routes to the coal regions will be improved, research projects and centres will be funded and federal institutions will be established locally. In addition, the Federal Government has committed itself to creating around 5,000 new jobs in federal authorities and other federal institutions in the coal regions by 2028.

Additional support of up to EUR 1.09 billion will also be provided to hard coal-fired power plant locations that are structurally weak and where hard coal is of particular economic importance. The former lignite mining areas of Helmstedt and Altenburger Land will also each receive EUR 90 million.

These funding instruments aimed at investments are supplemented by the STARK federal programme, which primarily supports non-investment projects.¹⁵ This aim is to continue to support the economically, ecologically and socially sustainable transformation of coal regions with the aim of turning them into internationally visible model regions for greenhouse gas-neutral, resource-efficient and sustainable development. On the one hand, this is achieved by investing in people and their commitment (networking, education, knowledge transfer, public services, understanding of the future and innovation). On the other hand, it requires business investment in transformation technologies (such as wind, PV, H2, batteries and CCSU).

Local aspects of structural change

From 1990 onwards, there was considerable intervention in lignite mining in eastern Germany, with a drastic reduction in the number of employees in the eastern German lignite mining areas.¹⁶ Against the background of this

experience and in order to make the decision to phase out coal (see Coal Phase-Out Act) and the associated structural change socially just, the German government set up the Commission on “Growth, Structural Change and Employment”, for example, which drew up proposals for shaping the structural change in Germany based on energy and climate policy. The aim of the commission was to make recommendations for the preservation and creation of new, good jobs secured by collective agreements in the affected regions, for the secure and affordable supply of electricity and heat at all times and for the preservation and further development of the coal-mining areas into regions that remain attractive and worth living in. The social agreement on the use of coal resulted in the adoption of the Coal Phase-Out Act and the Coal Regions Investment Act (InvKG) (see above).

Coal mining and coal-fired power generation are mostly located in structurally weaker regions, where they account for a share of industrial value creation. An industrial job has indirect and induced employments in various sectors, depending on the region.¹⁷

The extraction of lignite in open-cast mines has an impact on the economic, ecological and social structure of the communities directly affected and the communities on the edge of the open-cast mines in the mining areas. The polluter pays principle applies to the influence and use of infrastructure and property. Compensation, relocation and resettlement must be arranged and paid by the mining companies. Since German lignite mining began in the early 1920s, 120,000 people have been relocated.¹⁸ Villages are still affected by the resettlement. The owners of the affected areas are compensated by the companies for the resettlement. The same applies to municipal property. Municipal facilities will be rebuilt in agreement with the affected municipalities. Rare cases of compensation for expropriation under mining law¹⁹ are stipulated by law (Art. 14(3) GG in conjunction with Section 84 et seq. German Federal Mining Act (BBergG).

In the event of an agreement under private law, the parties concerned are directly responsible for determining the amount of compensation payments; only in the rare case of a necessary expropriation/assignment of land is this determined by the authorities following a valuation by an expert. It is subject to judicial review. The agreement on the lignite phase-out path has an influence on the expansion and adaptation of open-cast mines. New buildings planned in terms of infrastructure may not be necessary.

In order to cushion the social consequences of the coal phase-out, the German government has also introduced an adaptation payment (APG) for older employees aged 58 and over in line with the recommendations of the Commission on “Structural Change, Growth and Employment”. The aim is to make it easier for these workers to retire earlier by granting an APG for a maximum of five years. Details of the APG under the Act to Reduce and End Coal-Fired Power Generation (KVBG) were regulated in separate APG guidelines by the former BMWi in agreement with BMAS and BMF dated 3 September 2020.

Demand for natural resources

As an industrial and technology location, Germany is dependent on a secure supply of energy and non-energy (mineral) natural resources. Future technologies and projects such as the energy transition, electric mobility, digitalisation and decarbonisation of industry are changing the demand for certain natural resources. An increasing demand for natural resources such as lithium, rare earths, cobalt, nickel and copper is confirmed by regularly updated studies:

• International Energy Agency (IEA) – Global Critical Minerals Outlook 2024
• EU Commission – Supply chain analysis and material demand forecast in strategic technologies and sectors in the EU – A foresight study (2023)
• Federal Institute for Geosciences and Natural Resources (BGR) / DERA (German Raw Materials Agency) – Raw materials for future technologies (2021)

Basic pillars of the German supply of natural resources are domestic primary raw material extraction, the availability of secondary raw materials and raw material imports.¹

Domestic primary raw materials

The demand for quarried natural resources (mainly for the building materials, glass and ceramics industries), potash products (for agriculture), rock salt (especially for the chemical and pharmaceutical industries as well as as as de-icing salt) and some industrial minerals can be met entirely from domestic natural resource sources. Individual energy resources such as lignite and natural gas as well as petroleum are also extracted close to consumption in Germany and contribute to the security of supply with natural resources (see also Which raw materials are extracted in Germany).²

Mineral raw materials for future technologies are currently only produced in small quantities from mining in Germany. These include industrial minerals such as fluorite and barite, graphite, feldspar and coarse-grained quartz or quartz gravel for the production of silicon, but also lithium.^3,4 Compared to other countries, high environmental and social standards apply to extraction. However, production is not sufficient to meet the demand for natural resources and other metals such as cobalt, nickel or rare earths are not extracted in Germany. This is also evident from the following graph on the foreign trade balance.

Figure 8: Foreign trade balance by value in 2023

Source: BGR – Bundesanstalt für Geowissenschaften und Rohstoffe [Federal Institute for Geosciences and Natural Resources] (2024) (see footnote ⁵)

Secondary raw materials from recycling

Some metallic natural resources, such as iron/steel, lead and aluminium, are often not consumed but used due to their good recyclability. They can be returned to a product cycle after processing, although this recycling process does not function endlessly and is energy-intensive due to the loss of material. Many products made from non-metallic raw materials, on the other hand, are often chemically modified (e.g. cement, concrete) and therefore cannot be returned directly to the product cycle. However, some can be recycled as substitutes (e.g. building materials) for primary raw materials (recycled or secondary raw materials).

Secondary raw materials contribute to the domestic supply of raw materials and reduce import dependency. For example, aluminium is on the list of strategic raw materials of the Critical Raw Materials Act (CRMA), a European regulation on critical and strategic raw materials that requires, among other things, an increase in processing and recycling capacities in the EU. In 2023, around 2,976,000 tonnes of aluminium were produced in Germany, for which 2,786,000 tonnes of aluminium were recycled.⁶ The share of secondary raw materials (steel and iron scrap) in steel production was around 42% in 2023.⁷

This is not the case, for example, with lithium, which is also one of the strategic raw materials on the CRMA list and is mainly contained in batteries. Recycling processes for lithium are technically complex processes⁸ and lithium recycling of batteries currently takes place only to a small extent. It is expected that lithium demand will rise sharply in the coming years, and in addition to the primary supply, the secondary sector will play an increasingly important role in the future for the overall supply. Many batteries from electric vehicles are estimated to reach the end of their life⁹ in 8-10 years and are only then available for recycling.¹⁰ To strengthen the circular economy, the Federal Government has adopted the National Circular Economy Strategy (NKWS) 2024 (see Circular economy, in particular recycling).

The goal specified therein is to reduce the critical import dependencies on raw materials, strengthen the circular economy and reduce the overall consumption of raw materials in order to achieve a resilient, sustainable supply of raw materials. Successful implementation requires a rethink of industrial and innovation policy at the various international levels, as well as in Germany. This includes the targeted promotion of material-efficient approaches to the absolute reduction of the use of raw materials in industrial production (e.g. lightweight construction taking into account recyclability), of ecodesign approaches (e.g. improving the durability, reusability and repairability of products) and of approaches to the substitution of non-renewable, scarce or critical raw materials (see also Circular economy, in particular recycling). Securing high-quality secondary raw materials from the recycling processes for the economic cycle is a factor for increased use. The right economic and environmental incentives must be put in place to ensure that our raw material supply is responsible and secure in the future.

However, the supply of recycled materials is not sufficient to fully compensate for the rising demand for raw materials for the transformation of energy supply and for other future technologies. In view of the geopolitical developments and the challenges mentioned in relation to the import of raw materials, the Federal Government sees the need to strengthen diversification in the supply chains of critical and strategic raw materials as well as domestic raw material extraction in cooperation with companies in the medium and long term.

Natural resource impports

In the case of metals, individual industrial minerals and energy raw materials (with the exception of lignite), the industry is heavily dependent on imports from outside Europe and thus on the availability on the international raw material markets. At 298.4 million tonnes, Germany imported almost 13% less raw materials in 2023 than in the previous year. Imports of energy raw materials (-15.1%), non-metals (-8.9%) and metals (-6.9%) declined significantly. In 2023, energy raw materials, metals and non-metals (of which about 57% are industrial minerals) worth €216.2 billion were imported into Germany.¹¹ Further information on import volumes in the D-EITI sectors of German raw material extraction (petroleum and gas, lignite and hard coal, salts, stones/earths, industrial minerals, iron ore) can be found under the topic The extractive industry in Germany.

The world map (Figure 10) shows the most important supplier countries of the EU in 2023 of 60 potentially critically categorised mining, refining and commercial products (see DERA list of raw materials 2023¹²), of which more than 40% come from one country and had a total trade value of more than 5 million euros in 2023.¹³ The BGR report “Germany – Raw Materials Situation”¹⁴ publishes annual data on German imports of the most important critical and strategic raw materials. A complete list of these imports can be found at Destatis.¹⁵ It should be noted that a significant proportion of raw materials is imported via EU countries, but these are only intermediate stations in the raw materials trade.

Figure 9: EU import dependency on critical raw materials in 2023¹⁶

Source: DERA – from Chart of the Month, August 2023 (updated for the year 2023)

Therefore, an examination of Germany’s import dependency from the perspective of the German import figures is only partially meaningful. The degree of diversification of raw material imports on the EU internal market in Graph 9 also illustrates Germany’s dependence on imports.

Participating companies and sector coverage

In accordance with the MSG requirements (see also “Selection of companies”), the Independent Administrator has identified 40 companies or corporate groups. Of these, a total of 17 companies or corporate groups took part in the 2023 reporting process.

An assessment or evaluation of the number of participating companies or corporate groups should take into account that

• a high coverage of more than 94% in terms of lignite, natural gas, crude oil, potash and salt production was achieved. This is a positive development.
• After the expiry of the deadlines for the publication of the payment reports for the period from 1 January 2023 to 31 December 2023, the number of payment reports actually published falls short of the number of companies or corporate groups identified. All payment reports submitted by companies in accordance with Sections 341 q et seq. HGB are publicly available and can be viewed in the Company Register.¹

In preparing the first D-EITI report, the MSG discussed naming the identified companies that did not participate in the reporting for the first D-EITI report or for the supplementary report, on the initiative of civil society. In view of the public visibility of the payment reports and the legal concerns raised by the government side against naming these companies, the MSG has refrained from naming the non-participating companies also for the present D-EITI reporting, in line with the previous D-EITI reporting. The legal concerns raised by the government against naming the companies are set out below:

On the one hand, data protection law applies in cases where the company name allows conclusions to be drawn about a specific natural person, such as the name of sole traders (possibly with further information such as the registered office). This is the case for at least two companies that have not reported under D-EITI, so for reasons of data protection, they should not be named.

On the other hand, it is a concern that the publication of the company names in the D-EITI reporting without a sufficient legal basis could interfere with the fundamental right of companies to freely practice their profession (Art. 12 GG). There is no legal obligation to mention the company names.

The protection offered by Art. 12 GG is, inter alia, the freedom to conduct a business for profit. The publication of the company names in the D-EITI reporting would interfere with the protection as an act of industry control by the state. Indeed, the publication of all the names of the companies which did not take part in the comparison could have a certain pillory effect, which could lead to companies feeling in fact compelled to agree to the comparison. This problem is exacerbated by the fact that the data to be transmitted by companies (payment flows such as corporate tax, mine site and extraction royalties, sometimes trade tax) are trade, business and tax secrets.

Nor would it be legally justifiable to mention the name in view of the decisions of the Federal Constitutional Court (BVerfG) in the glycol² or scientology³ cases. In these cases, the Federal Constitutional Court has indeed ruled that the Federal Government can fulfil its warning and information obligations even without a legal basis, in particular if, as in the glycol case, there are interests worthy of protection on the part of consumers that speak in favour of a warning (consumer health). However, there is no comparable interest in the case of companies not reporting under D-EITI. As a result, such a presentation is therefore also omitted for the present reporting.

In Germany, a company extracting natural resources with a majority state participation, Südwestdeutsche Salzwerke AG, has been identified. According to its 2023 annual report, the City of Heilbronn and the State of Baden-Württemberg respectively have a total of 93.11% of the voting rights in this company (see the 2023 annual report, p. 146). The dividend paid in 2023 for the previous financial year was EUR 15,235,875.00, corresponding to EUR 1.45 per share (see the 2023 annual report, p. 113). The subscribed capital amounts to EUR 27,000,000.00 and is divided into 10,507,500 no-par-value shares (see the 2023 annual report, p. 167).

The 2023 annual report, including the audit report on the consolidated financial statements and the group management report, is available on the company’s website (see Salzwerke annual report)

In addition, comprehensive information on corporate governance, including a corporate governance statement, a declaration of compliance with the German Corporate Governance Code (DCGK) or a code of conduct for employees and suppliers, is published (see Salzwerke corporate governance)

State participation in companies extracting natural resources is subject to additional requirements under EITI standards 2.6, 4.5 and 6.2.⁴ According to the MSG, the requirements are adequately taken into account by the above explanations.

Selection of sectors

The EITI standard requires all major payment flows from a country’s extractive sector to be tak-en into account. The first step is to identify the sectors to be included. In various meetings, the MSG discussed which sectors of the extraction of natural resources should be included in the present German EITI report. In line with previous years, the following sectors have been adopted by the D-EITI MSG:

• Lignite
• Crude oil and natural gas
• Potash and salts
• Quarried natural resources

The mining of hard coal in Germany ended at the end of 2018. As a result, the sector is still not included in the reporting.

Selection of companies

After defining the sectors, the second step is to identify the companies to be included in the EITI reporting. The EITI standard does not contain any direct requirements for the process of selecting these companies. The MSG has therefore decided to follow the guidelines for the prepara-tion of (group) payment reports.¹

Under Section 341q et seq. of the German Commercial Code (HGB), companies in the extrac-tive industries are obliged, under certain conditions, to prepare and publish a (group) payment report. This obligation is based on criteria such as the registered office, legal form, size or activity of the company. The report shows which payments were made by the respective companies to government agencies during the reporting period (see comments on public reports).

The chosen approach is largely based on the EITI’s objective of creating transparency on government revenues from extractive industries (extractive sector) and disclosing all material payment flows between companies and government agencies. Payments and revenues are considered material if their omission or misrepresentation could significantly impair the completeness of EITI reporting (according to EITI requirement 4.1b). The individual criteria are presented individually below.

Sector

The basis for the identification of the companies is the activity within the extractive industry. The current classifications of companies according to NACE Revision 2 are applied. They are based on Regulation (EC) No. 1893/2006 of 20 December 2006. This Regulation lays down detailed rules for establishing the statistical classification of economic activities. According to this, companies are considered to be “active” in the extractive industries if they are assigned to the following sub-sections:

• Sub-section 05: Coal mining
• Sub-section 06: Extraction of crude oil and natural gas
• Sub-section 07: Ore mining
• Sub-section 08: Quarrying, other mining

Please refer to the end of this section for a detailed list.

Size categories of companies

In addition to the sector, the criteria for the identification of companies are initially based on the criteria for “large” companies in accordance with Section 267 para. 3 HGB. For the 2023 reporting year, at least two of the three criteria must be met on at least two consecutive reporting dates:

• Balance sheet total more than EUR 20 million
• Sales revenues more than EUR 40 million
• More than 250 employees on average per year

Infection theory

In addition to the legal obligation to prepare payment reports for “large” companies, there is also a group reporting obligation for parent companies, provided that at least one subsidiary is active in the extractive sector. The size of the subsidiary does not matter. This principle is known as “infection theory”. The activity of a subsidiary in the extractive sector may trigger a reporting obligation for the entire parent company. This approach has been taken into account in the identification of companies, thus broadening the range of companies concerned.

Activity test

Only companies that actively extract natural resources in Germany should be considered. Companies that extract natural resources exclusively abroad, as well as companies that focus on storage or act as service providers, are not considered.

The selection of companies is thus based on a combination of company size and economic activity in the extractive sector.

Description of the approach to ensure the quality of the published information

The MSG must ensure the quality of reporting on payments made by companies to government agencies as well as the corresponding government revenues. This is a key requirement of the EITI standard. In the first two D-EITI reports, the MSG relied on mutual disclosure of payment flows for quality assurance. This so-called EITI standard procedure provides for an individual comparison of the reported payments of companies with the corresponding revenues of the government agencies by an Independent Administrator. There were no or no notable differences between payments made by companies and payments received from government agencies.

From a systematic point of view, the standard payment reconciliation procedure is a case-by-case examination of the payment flows reported by the participating companies. There is no recording and assessment of the processes and controls associated with the payment flows.

Since the 2018 reporting period, Germany has been developing and implementing an alternative method for quality assurance of reported payment flows to government agencies. For this eighth German EITI report, the alternative method will continue to be used by the MSG and the Independent Administrator.

The alternative method replaces payment reconciliation with a two-step system-based approach. In its first step, information about the relevant processes and controls as well as the control environment is collected and analysed. The focus is essentially on the government payment recipients, for example the collection processes of the government agencies, the existing monitoring bodies or the general legal framework conditions in the government agencies. The aim of the analysis is to enable the MSG to make an informed assessment of whether there are risks of incorrect processing of extraction-related payments to government agencies during the reporting period.

Depending on the result of the risk assessment, different steps are derived: from a plausibility check based on key figures or further analytical considerations in the case of missing risk indications to detailed analyses/checks in the case of risk indications.

The concept of the system-based approach developed under the alternative quality assurance process is considered appropriate to meet the requirements of the EITI standard on the reliable disclosure of payments from the extractive industries. In the meantime, the alternative has been included as an EITI standard procedure.

The investigative actions of the company reports carried out by the Independent Administrator lead to the assessment that the MSG can successfully complete the quality assurance required according to Requirement 4.9 of the EITI standard on the basis of this system-based approach.

Type and scope of the work of the Independent Administrator

The work of the Independent Administrator consisted of investigative actions in accordance with the International Standard on Related Services (ISRS) 4400, Engagements to Perform Agreed-upon Procedures.

The investigative actions carried out by the Independent Administrator do not constitute a (final) audit or an audit review of the reported payment flows in accordance with professional standards for auditors recognised in Germany or internationally. Therefore, the Independent Administrator has not issued an overall judgement (neither with sufficient nor limited certainty) on the reported payment flows. The Independent Administrator has not carried out their own investigative actions to verify the accuracy, completeness and reliability of the payment data with regard to the data reports of the participating companies or the government agencies. Moreover, the investigative actions were not aimed at the detection of errors or infringements on the part of the participating companies or government agencies.

The activities of the Independent Administrator under the alternative reconciliation procedure were set out in a comprehensive work report for the 2023 reporting year.

Templates and information on data collection

Based on the MSG’s decisions on the D-EITI reporting process, the Independent Administrator has created a Word-based template for collecting the relevant data from the companies.

In order to provide companies with practical advice and assistance, a FAQ document (Frequently Asked Questions) was compiled in addition. In addition, the Federal Ministry for Economic Affairs and Energy (BMWE) provided an accompanying letter for the enquiry.

The template for data collection from companies also serves the MSG as a tool for communication with the participating companies to record the payment flows. Thus, at the request of the MSG and in line with previous years, additional enquiries were made regarding beneficial owners within the meaning of the Money Laundering Act and regarding the presence of so-called politically exposed persons (PEPs).

Managing tax secrecy

EITI reporting includes tax data, namely payment flows relating to corporate tax and trade tax, which are subject to tax secrecy in accordance with Sections 30 et seq. AO (German Taxation Regulation). In the course of preparing the EITI report, the payment flows reported by the companies and received by government agencies were prepared and disclosed. This usage of tax-relevant data is only permissible if the taxpayer, i.e. the respective company, expressly agrees (Section 30 para. 4 No. 3 AO).

The data reporting by means of the enquiry form ensured that the consent of each individual company was obtained. This consent has been confirmed by all participating companies by the signatures of authorised persons.

Identification of companies

The Independent Administrator has carried out a comprehensive analysis to identify the relevant companies for the eighth D-EITI reporting. The analysis was based on the D&B Hoovers database. All the companies which are mainly active in the extractive industries in the areas of lignite, crude oil, natural gas, potash and salts as well as quarried natural resources were selected. This was based on the allocation of the companies to sub-sections 05 to 08 in accordance with Regulation 1893/2006/EC of December 2006 (see Selection of companies).

In the second step, the companies were selected according to the size criteria specified by the HGB for “large” companies.

The circle of these provisionally identified companies was manually expanded by the Independent Administrator to include corporate groups in which so-called group infection via “active” subsidiaries could be considered (for details see Selection of companies). The following aspects must be taken into account, unchanged from the previous D-EITI reporting:

• Companies which are primarily active in the storage of natural resources (e.g. construction and operation of cavern storage facilities for the storage of natural gas) are not considered, despite being assigned to sub-sections 05 to 08, since the extraction of natural resources is not the main focus here; the same applies to other services.
• All the companies in sub-section 07 (ore mining) initially included do not actively extract natural resources in Germany and were therefore not considered.

Due to the legal requirements (see Sections 341q et seq. HGB) and their interpretation, complete identification of all companies subject to reporting requirements for the current D-EITI reporting cannot be ensured. Nevertheless, the published payment reports for 2023 show that the companies determined according to the methodology used are broadly in line with the reporting companies.

It is evident that the selection criteria set by the MSG have achieved a high level of coverage for the lignite, crude oil, natural gas, potash and salt sectors (see 2023 payment flows). These natural resources are exclusively free-to-mine mineral resources. These sectors contain few large companies. On the other hand, the natural resources in the quarried natural resources sector are mainly produced by a large number of small to medium-sized companies.

According to evaluations by the Bundesverband Baustoffe – Steine und Erden e.V., there is a total of approx. 3,400 companies in the building materials, stone and earth industry in Germany in 2023. About 81% of these companies employ fewer than 50 people. These smaller units account for about 40% of the sales revenue of the building materials, stone and earth industry. The fragmentation of the sector is also due to the widely differing capital intensity of production; in particularly capital-intensive subsectors (e.g. cement production), larger medium-sized and large companies are significantly more represented than in the area of pure natural resource extraction. The size structure of the industry has changed little over the past decade.¹

As a result, it can be assumed that a number of companies or corporate groups that do not meet the size criteria of the D-EITI reporting are already among the 25 largest providers in this sector. Coverage of the quarried natural resources sector therefore lags behind that of the other sectors, owing to the large number of small and medium-sized companies not covered.

Quality of data provided by companies

Companies in Germany are subject to comprehensive, legally-regulated

• accounting,
• disclosure, and
• auditing obligations.

The structure of the regulations depends on the size, legal form and activity of the company and must therefore be determined individually for each company. In principle, corporations and limited partnerships within the meaning of Section 264 a para. 1 HGB² must draw up annual accounts with notes and, if necessary, a management report at the end of each financial year.³ The obligation to carry out an audit is regulated in particular in Section 316 et seq. HGB. There is a legal obligation to carry out audits for, among others, “medium-sized” or “large” corporations and certain limited liability partnerships. The size categories are determined according to Section 267 para. 2 and 3 HGB and are based on the criteria balance sheet total, turnover and average number of employees.

The statutory audit must include at least the annual accounts (balance sheet, profit and loss account and notes) as well as the management report and the accounting records. The auditor must determine whether the accounts are consistent with the underlying accounting principles and with any other legal basis such as the Articles of Association or the partnership agreement (compliance/regularity audit). Furthermore, it must be determined whether the respective financial statements together with the associated management report give a true and fair view of the company’s position, whereby it must also be examined whether the management report accurately presents the opportunities and risks of future development. The auditor summarises the results of the audit in a written audit report (see Section 322 HGB).

The annual accounts, management report and audit report (in the case of statutory audits) as well as other documents must be disclosed in the Company Register (Section 325 HGB). So they are generally available to the public at the internet address https://www.unternehmensregister.de/en. However, there are disclosure exemptions for certain size criteria.⁴

The shareholders of a subsidiary may waive the statutory audit and disclosure requirements for the annual accounts and management report of the subsidiary. This requires certain conditions (see Section 264 III HGB) to be met, including that the consolidated financial statements of the parent company are disclosed and that the parent company has agreed to assume responsibility for the obligations entered into by the subsidiary up to the reporting date. If the shareholders make use of all or part of the relief, these cases must, however, also be disclosed transparently via the Company Register.

In contrast to the annual accounts, the (group) payment reports are not subject to any statutory auditing obligation pursuant to Sections 341 q et seq. HGB. However, the statutory auditor

must report in the audit report if no (group) payment report has been prepared or disclosed despite the statutory obligation.

The management board or executives must ensure that the relevant financial statements are correct. To fulfil their due diligence obligations, they are usually supported by an internal audit department. The internal audit department provides independent and objective audit and advisory services. It supports the organisation in achieving its objectives by using a systematic and targeted approach to assess and improve the effectiveness of risk management, controls and management and monitoring processes. In Germany, there is no legal obligation to establish this process-independent control function, but it complies with the principles of good corporate governance (see German Corporate Governance Code). It is particularly common in large, complex or internationally active corporations.

In addition, many companies rely on compliance management systems to ensure compliance with legal requirements and internal policies. They include preventive measures, training or whistleblower channels to prevent or detect violations of laws or internal regulations. The establishment of a whistleblower system has been mandatory in Germany since 2023 for companies with 50 employees or more. The corresponding Whistleblower Protection Act (HinSchG) is the German implementation of the EU Whistleblower Directive.

Since the Financial Market Integrity Strengthening Act (FISG), listed companies also need to put in place an adequate and effective internal control system. An internal control system (ICS) consists of systematically designed technical and organisational measures and controls in the company to comply with guidelines and to prevent damage that can be caused by its own staff or malicious third parties. In particular, the accounting-related internal control system is geared to the accuracy and completeness of the financial statements.

Published accounts of the participating companies

The audited financial statements or consolidated financial statements are published on the websites of the participating companies or in the Company Register. Below is an overview with reference to the relevant documents.

Since it is technically not possible to link to individual enquiries in the Company Register, the following click instructions are included:

1. Click on the linked website
2. Enter the company name into the “Company name” search field
3. If you select the “Extended search” option, you can narrow your search by stating specific criteria such as the registered office, subsidiary or desired publication period
4. Select the corresponding documents according to the name in the table that subsequently appear

Identification of government agencies

Due to the federal structure of the administration in Germany, it is not possible to centrally record all the relevant government agencies that generate revenue from the extractive industry. They are therefore derived directly from the defined payment flows:

• Corporate tax: Competent tax offices at the registered office of the companies
• Trade tax: Municipalities in whose territory the relevant establishments are located
• Mine site and extraction royalties: Competent mining authorities of the federal state in which the licensed/approved field is located
• Lease payments and payments for infrastructure improvement: Government bodies at state or municipality level, depending on the type of payment

The basis for the presentation of government revenue is the corresponding data on payments by companies for the current reporting year.

Basis for risk identification and assessment

On the basis of publicly available sources of information, interviews with employees of the government agencies and the information provided by members of the MSG, it was assessed whether there were any indications that the following payment flows could be irregular in the 2023 reporting period:

• Mine site and extraction royalties
• Corporate tax and
• Trade tax

Details of this assessment process are described in more detail below.

The assessment is based on the processes and control mechanisms put in place by government agencies to ensure proper collection (debit) and settlement (payment) of the respective payment flows. The concept of “regularity” means, with regard to the EITI objectives,

• that adequate processes or procedures are in place at the level of the relevant government agency to ensure that payments are made in a timely manner and in accordance with the law,
• that processes and controls are in place to ensure full and timely clarification of any discrepancies between the debit position of government agencies and payments by companies,
• that adequate controls are in place at the level of higher government agencies; and
• that verification of the controls by independent audit offices is ensured.

The analysis of the processes and controls set up on the part of the government agencies therefore necessarily also takes into account the wider administrative environment of these government agencies and the relevant legal framework.⁵

In Germany, this system is based on a combination of legal bases (e.g. civil service law, budgetary law, criminal law, administrative regulations), the structure and organisation of the authorities (e.g. by means of rules of procedure, business allocation plans, establishment of segregation of duties, dual-control principle) and additional monitoring of processes and controls (e.g. by means of internal audit offices and other independent audit offices).

All these processes, procedures and controls are to be understood as an internal control system. An ICS supports the objective of a correct collection of the respective payments.

The definition of an internal control system is the result of various framework concepts. The concept of the Committee of Sponsoring Organisations of the Treadway Commission (COSO) has been widely disseminated internationally. Its basic principles are reflected, for example, in the Standards for Internal Control in the Federal Government of the United States Government

Accountability Office, which means that it can also be applied to government agencies. At the same time, this framework concept is, among other things, the methodological basis for the auditing standards applied in Germany by the Institut der Wirtschaftsprüfer in Deutschland e. V. (IDW) in statutory audits and voluntary audits.⁶

According to COSO, the components of an internal control system include the control environment, risk assessments, control activities, information & communication and monitoring of the internal control system. These components are applied to the relevant payment flows of corporate tax, trade tax and mine site and extraction royalties.

Project term: Mine site and extraction royalties

As described in detail under Selection of payment flows, the project term for the mine site and extraction royalties is defined on the basis of the payment obligation to the respective govern-ment agency. In practice, these are the payments to the mining authorities of the federal states. The corresponding payments were published as part of the 2023 D-EITI reporting.

With regard to the mine site and extraction royalties, the EITI Standard leaves room for interpre-tation. In accordance with section 4.7, the project term could be defined even more granularly at the level of the licensed or approved field.

Some of the participating companies, such as Wintershall Dea Deutschland GmbH, already report on this level as part of the data enquiry or payment reports. A corresponding entry field is provided in the enquiry form, but is not filled by all companies.

We therefore recommend that all participating companies be made aware of this information as part of the forthcoming data enquiry and that additional information be requested if neces-sary. If all companies submitted complete reports, payments could be shown both on the ba-sis of government agencies and at the level of the licensed or approved field.