German Chancellor Angela Merkel's ruling coalition is battling to hammer out an agreement on the future of the nation's heavily-subsidised coal industry with senior officials now hoping to draw up a plan by the end of the month.

After struggling to find a compromise on Merkel's controversial health reforms, the government was forced to delay until later this month talks aimed at laying out a timetable for ending state aid to the hard coal sector, which currently amounts to about 2.5 billion Euro a year.

But despite facing European Union pressure to cut state support for coal, the prospects of the two parties comprising Merkel's so- called grand coalition government reaching a consensus appears nowhere in sight.

The delay in forging an accord about the future of the nation's last eight mines has also raised doubts about this year's planned stock market listing by German mining group RAG AG.

The Essen-based company is in favour of ending coal as an energy source and said it has earmarked the 5.5 billion Euro which it expects to be raised by its stock market debut for renewing areas damaged by coal mining.

Ending state aid for the EU's coal industry has considerable social implications for the 25-member bloc's coal producing states. Apart from the 80,000 jobs dependent on coal mining, the drive to reach a compromise on the industry's future in Germany comes against the backdrop of a growing dilemma in the nation about its overall energy needs. This is particularly the case following Berlin's decision to phase out of atomic energy by 2021.
Besides the increasing worries about climate change, Germany's growing energy debate has also been shaped by last year's surge in oil prices along with increasing concerns about the security of supplies in the wake of last year's so-called gas war. This is especially the case following Russia's Gazprom's fight with Eastern Europe over energy contracts.
Combined with this, the recent rise in German gas prices has alarmed consumers and as a result helped to make greater dependence on gas politically unacceptable in the nation as well other parts of Europe.
Indeed, the question for Germany's political and business leaders as they grapple with the future of coal is what will replace the around 20 percent gap in the nation's energy mix that will emerge once the nation has dismantled its nuclear energy apparatus around the end of the next decade.
Generous government subsides might have also helped to turn Germany into a world leader in the use of alternative energy sources, even officials in Berlin remain sceptical as to whether renewable energy will have the potential to power the nation's heavy industry in the near future.