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UPDATE 1-Czech government parties fail to agree on 2038 coal phase-out target

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PRAGUE, Feb 1 (Reuters) - The Czech government on Monday postponed a decision on a 2038 target date to phase out coal after the junior ruling party Social Democrats sought an earlier exit than a state commission recommended.

Interior Minister Jan Hamacek, head of the Social Democrats, said the phase-out will be put to a debate among the ministries and other organisations, including non-governmental, before the government makes a decision.

The Social Democrats have sought a target exit date of 2033.

A broad state commission, after months of work, had recommended in December the exit date of 2038. The target is one of the later ones in Europe but on par with neighbouring Germany.

The commission had debated three target dates, with the latest being 2043.

Environmental activists have also sought the earliest target date.

The Czech Republic uses coal for just under half its electricity production. Unlike Germany, though, the country aims to rely more on nuclear than renewable sources in the future.

Several other EU states aim to phase out coal before 2030. The EU carbon price has helped to drive a switch from coal to gas power in many regions since 2018.

The country’s coal plants are owned by majority state-owned CEZ, central Europe’s largest listed utility, and private groups Sev.en Energy and Sokolovska Uhelna, with all operating lignite mines as well.

Industry experts have said market pressure from a dwindling spread between the price of electricity and carbon emission allowances, together with tougher emissions rules, may push many coal power stations off the grid sooner.

CEZ has shut 1,000 MW in coal installed capacity in the last year and has sold coal plants at home and abroad, aiming to cut its coal capacity in half by 2025, versus 2016 levels. (Reporting by Robert Muller; Editing by Susan Fenton and Ed Osmond)

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