Adverse economic conditions are driving coal out of European energy markets even faster than previously thought.

The rout is so complete that by 2030 Germany looks to be the only major market in Northern, Western and Southern Europe still burning the black stuff, said Peter Osbaldstone, research director for Europe at Wood Mackenzie Power & Renewables

Germany has committed to phasing out coal by 2038. Across most of Europe, though, coal’s demise is being hastened by low gas prices that look set to continue into 2020.

These, together with a growing influx of cheap renewables and a European Union emissions trading system that has seen the cost of carbon increasing almost fivefold in the last two years, have rendered many coal stations uneconomical.  

The U.K. power sector, for example, made headlines at the beginning of May when it went without coal for a week. And before the month was out it had set a new record, going for a full fortnight with no coal generation.

One EU Allowance, allowing the burning of one ton of carbon dioxide, currently trades around €25 ($28.30), having hovered in the €3 to €8 range for most of 2012-2017. The EU's cap-and-trade system, known as the Emissions Trading Scheme, is the world's largest.

High carbon prices in the U.K. meant that coal hasn’t been able to compete for a long time, said Osbaldstone. He said weeks without coal generation would likely be “just the norm now” in the U.K.

What coal plants remain in the country are supported through capacity mechanisms that allow them to charge a premium for winter operations, he said.

Last month also saw Ireland’s all-island grid setting a coal-free record. The grid, which serves Ireland and Northern Ireland, went without coal for 25 days, the longest period since the all-island market was set up in 2007, due to “pressures from wind output and competitive gas,” Osbaldstone said.

Coal is even feeling the pinch in Germany. With wind and solar crowding into the market, the space available for coal and gas is under pressure, said Osbaldstone. “Even those plants at the top end of the efficiency range in Germany still aren’t making much money,” he said.

Practically the only bright spot for European coal is in Poland, which is home to the largest and most polluting thermal power station in Europe. The plant, Bełchatów, is so vast that it creates its own weather patterns.

This month Bełchatów’s owner, the Polish state utility Polska Grupa Energetyczna (PGE), closed one of the plant’s 13 units. But PGE has plans to open Poland’s deepest-ever open-cast lignite mine on land beneath 33 villages in Zloczew to keep Bełchatów running into the 2030s.

Europe Beyond Coal, a pressure group, said PGE’s love affair with coal was risking not only huge losses for its shareholders and taxpayers, but “giving false hope to coal workers while pointlessly driving people out of their homes.”

Europe Beyond Coal’s communications director, Greg McNevin, noted that European investors were turning their backs on the fuel.

The French financial giant Crédit Agricole this month gave its coal clients a 2021 deadline for submitting plans on how they will close all plants and mines by 2030. “No one wants to invest in things that clearly have no future,” McNevin told GTM.

The combination of poor economics, national phaseout regulations and investor disdain is leaving the coal industry with few options. In 2017, the European association for coal and lignite, Euracoal, was still pushing for environmentally compatible clean coal projects.

But the likelihood of the industry securing the investment needed to develop large-scale carbon capture and storage technologies before European phaseout deadlines take effect looks vanishingly small. “Clean coal’s a pipe dream,” said McNevin.

“The reality is the industry is already limping toward a terminal future,” he said. “There is no future for it, and there can’t be after 2030 in Europe if we are going to seriously deal with the climate crisis.”

It seems all that is left for European coal interests is to consider an orderly exit. The question for policymakers is how to soften the blow to coal-dependent communities, with Germany for example putting aside at least 40 billion euros ($45.7 billion).

There is also an issue around what to do with old coal-fired power plants. The U.K.’s largest coal-fired station, Drax, has been mostly adapted to run on biomass and is also planning to host batteries.

And in Germany, the German Aerospace Center is investigating whether coal plants could be reused as thermal energy storage assets.

“If I was an investor these days, I would be seriously questioning any investment into coal technology or coal infrastructure, because it’s going to end up a gigantic stranded asset,” said McNevin. “The chance of that is nearing 100 percent.”