The German cabinet has approved a deal to allow the country's major utilities to pay €23.5bn ($26bn) for shifting responsibility of managing nuclear waste to the government.
The legislation approved by the federal cabinet enables the firms such as E.ON, RWE, EnBW and Vattenfall to pay the amount into a state fund for temporary and permanent nuclear waste storage by 2022, Agence France-Presse reported.
The government decided to close all of its nuclear power plants by that date following the Fukushima nuclear disaster in Japan five years ago.
Currently, eight nuclear power plants remain in operation in the country.
The country aims to produce 80% of its electricity from renewable sources by 2050, The Associated Press reported.
If the cost for waste management exceeds the stipulated amount, the firms will be responsible for dismantling the plants and permanent storage of all the remaining nuclear waste.
To cover these costs, the remainder of €40bn provisions, which are earmarked for the nuclear power plant shutdown, will be used.
Germany’s energy minister Sigmar Gabriel was quoted by the publication as saying: “Financing for shutdown, dismantling and waste management will be guaranteed for the long term without transferring the costs to society or endangering the economic situation of the operators.”
E.ON will contribute around €10bn to the fund for nuclear waste management.
However, Germany is yet to finalise a location to store the nuclear waste. The search and construction of the storage site is expected to take many decades.
DIW economic think-tank energy policy expert Claudia Kemfert said: “The companies made high profits for years and shouldn’t be released from overall responsibility.
“With this pact only a fraction of the true costs will be covered, society will have to bear the rest.”