CLEW Guide – Germany's renewables push brings 2030 climate target in reach
Photo: CLEW/Wettengel.
With its “CLEW Guide” series, the Clean Energy Wire newsroom and contributors from across Europe are providing journalists with a bird's-eye view of the climate-friendly transition from key countries and the bloc as a whole. You can also sign up to the weekly newsletter here to receive our "Dispatch from..." – weekly updates from Germany, France, Italy, Croatia, Poland and the EU on the need-to-know about the continent’s move to climate neutrality.
Content:
Key background
Key background
- As Europe’s largest economy, Germany is a key energy hub in the heart of the continent.
- Greenhouse gas emissions have decreased 46 percent since 19902 and Germany aims for climate neutrality by 2045.
- Germany’s world-renowned “Energiewende” – the country’s transition to climate neutral and nuclear-free energy supply – has broad public backing.
- After 16 years of conservatives-led governments under chancellor Angela Merkel since 2005, the three-party coalition of SPD, Greens and FDP from late 2021 has put a focus on climate-friendly transformation, setting the frame for urgently needed transition steps. With some delay, it presented a comprehensive Climate Action Programme 2023 to put the country on track to reaching its climate targets. However, months-long disputes also on key climate policy – such as the phase-out of new oil and gas heaters – have held up progress, and public discontent with the government and the rise of populist movements risks slowing climate efforts even more.
- Projections by the country's Federal Environment Agency (UBA) in March 2024 showed that the country for the first time has come on track towards achieving its national 2030 climate targets, not least thanks to the resolute expansion of renewable energy sources the government has put in place. It posted a major drop of more than ten percent of greenhouse gas emissions in 2023.
- The country continues to struggle with high emissions especially in the transport and buildings sector. Although there are positive signs in the expansion of electric cars and heat pumps, general progress in the German energy transition is slow, according to a project tracker by Ariadne.
Major transition stories
- Country on track to reaching national 2030 climate target – Germany is largely on track to reaching its national target to reduce total greenhouse gas emissions by 65 percent by 2030, according to projections by the country's Federal Environment Agency (UBA). If Germany manages to implement climate policies as planned – including a rapid renewables expansion, the phase-out of fossil fuels and the switch to clean technologies in all sectors – energy and industry emission cuts will even exceed the sector targets, but those from transport and buildings will remain far off track. However, Germany still looks set to also fail its EU goal for sectors such as transport, buildings and agriculture. UBA also presented emissions data for 2023, which showed a 10 percent reduction, largely due to reduced fossil fuel use for electricity generation and heating, and to a weak economy, which pushed down energy-intensive industrial production.
- Same ambition level, significantly less money – the ruling coalition government has cut its special "Climate and Transformation Fund" by 45 billion euros by 2027 in response to a ruling from the constitutional court. The country's highest court declared that transferring 60 billion euros of unused pandemic borrowing to the special fund (set up to finance energy transition projects outside of the regular budget) was unconstitutional, throwing the government's budget plans into disarray. Germany will stick to its key target of delivering a climate neutral transformation of the economy, but "will have to use significantly less money" to meet this goal, chancellor Scholz said. Agreeing the 2024 budget entailed difficult negotiations in the government coalition, and the budget gap could be even bigger in 2025.
- Climate foreign policy – Germany is seen as a credible leader in international climate talks despite shortcomings at home, and has hosted the annual Petersberg Climate Dialogue for more than a decade. The government published a climate foreign policy strategy set to ensure all government ministries speak with one voice to international partners to foster a socially just and economically successful move to climate neutrality worldwide. The strategy accompanies the security policy strategy and a China strategy, both published in 2023.
- Just transition – What started out with a debate about supporting coal workers in mining regions and state subsidies for so-called “structural change” is increasingly turning into a cross-societal debate about leaving no one behind in the transition to climate neutrality. Installing a heat pump, buying an electric car or dealing with higher fuel costs due to CO2 pricing affects everyone, but low-income households will need more support to manage the changes. A just transition will become a big issue not only in Germany, but across Europe, when the new EU emissions trading system for transport and buildings starts in 2027. The "climate bonus," which the government promised in its coalition agreement and which would return some of the revenue from Germany's carbon pricing to low-income citizens, is yet to be developed and delivered.
- Sustainable finance – In contrast to its reputation as an energy transition pioneer, Germany has been a latecomer in tapping into the potential of compelling banks, insurance companies, fund managers and other financial actors to curtail CO2-intensive projects and fund cleaner alternatives. The German government coalition under chancellor Scholz has vowed to quickly expand the country's role in the transition to green and sustainable investment practices and fully integrate the financial sector in its climate policies.
- Adaptation – Despite the deadly floods and droughts, Germany is still failing to integrate climate adaptation into everyday decision-making at all levels, although it published its first adaptation strategy in 2008. The government has adopted a federal climate adaptation law, which does not yet stipulate measures, but obliges the government to present a climate adaptation strategy with measurable targets by September 2025 at the latest, and to update it every four years. According to the latest Monitoring Report, Germany must step up its efforts to adapt to the already unavoidable effects of climate change as it faces prolonged droughts, severe water loss and increasing warming. In 2023, the government presented a water strategy and a natural climate action strategy.
- Carbon removal – A long-term strategy for negative emissions is set to introduce a 2060 target for net-negative greenhouse gas emissions and intermediate targets for technical carbon sinks. The strategy, of which the government released a first outline, will look at different methods to capture, remove, store and use carbon dioxide and consider economic incentives to help ramp up the corresponding industrial infrastructure.
- Climate protests – Following the large success of youth protests led by the Fridays for Future movement since 2018, which helped convince large parts of society that ambitious action is needed, more drastic forms of protests such as activists gluing themselves to streets or throwing paint at art works and landmarks such as the Brandenburg Gate provoked mainly negative reactions. Faced with dwindling numbers of participants, Fridays for Future has begun teaming up with other interest groups in society and launched a protest for better public transport funding together with labour union Verdi, which represents workers in the sector.
- Raw materials and recycling – The energy crisis fuelled by Russia’s war against Ukraine has pushed the dependence on imports of key raw materials back to the top of the debate in Germany and Europe. The government is working on a circular economy strategy, and has adopted its China strategy. The EU is working on a raw materials act, likely to enter force in 2024.
- ‘Climate neutral’ products and companies – Companies across the globe have started a race to declare themselves and their products "climate neutral." Firms constantly announce a net-zero target or launch a product that is supposedly "climate neutral." Most claims still rely on questionable commitments to compensate continued emissions elsewhere in the world, inviting accusations that this trend is nothing but greenwashing. But the decarbonisation drive of entire economies will inevitably result in firms no longer having any impact on the climate.
- 'Franco-German engine' – The European Union faces a multitude of parallel challenges that share the question of how and where it sources its energy in the future. From the increasing urgency to act on emissions reduction over security risks raised by Russia's war on Ukraine to economic stability in a world of rapid industrial change, the two core EU members France and Germany must come clean on the bloc's energy strategy to make it fit for the tasks ahead, but headlines have been dominated by division over the role of nuclear plants, renewables and combustion engines.
- Challenges – Major roadblocks on the path to climate neutrality include a lack of skilled workers to implement renewable energy expansion plans and energy efficiency projects, as well as grid expansion. The government has reformed immigration laws with the aim of filling tens of thousands of vacant energy transition jobs. Separately, network agency BNetzA is set to issue power grid expansion permits on a large scale from 2024, and has allowed distribution grid operators to throttle electricity flows to heat pumps and electric vehicles in a bid to speed up their uptake in the face of challenged distribution grids.
- Farmers protests – Farmer protests across Germany at the beginning of 2024 highlighted the difficulties faced by the government to reconcile decarbonisation efforts with budget restrictions and social cohesion. At the same time, the effects of climate change are felt significantly stronger in the sector.
Sector overview
Graph: CLEW/Narawad.
Energy
Energy
- The sector is responsible for roughly 30 percent of total GHG emissions.
- The last nuclear power plants were shut down in April 2023, completing a decades-long phase-out process. The government wants to pull forward the coal exit “ideally” to 2030 (from 2038), and there are no phase-out targets for oil and gas.
- Citizens’ wind and solar projects helped ignite a shift to renewables that raised the share in the power mix of wind turbines, solar panels and other renewable technologies from 4 percent in 1990 to 52 percent in 2023 (2030 target: 80 percent).
- Germany plans a massive expansion of renewables over the coming decade, but also to build additional (hydrogen-ready) gas power plants as a supplement to intermittent wind and solar electricity. Industry leaders have warned that government tenders for these plants must come soon to enable an early coal phase-out by 2030. While wind power expansion is picking up, it is still off the 2030 target path, while the solar sector is more clearly on an upward trend.
- However, oil, gas and coal are still very important energy sources, for example in transport and heating: the share of renewables in total energy consumption reached 22 percent in 2023.
- The energy crisis fuelled by Russia’s war on Ukraine forced a huge shift in energy supply and potentially helped speed up the energy transition, but led to a domestic LNG buildout.
Industry
Industry
- The sector is responsible for 23 percent of total GHG emissions; most industry emissions are covered under the EU ETS.
- Germany is set on transforming its world-renowned industry (e.g. steel, chemicals, cement) to make it fit for a climate-neutral world and to host the industrial production of the future. The government agreed on a package of measures worth billions of euros in 2024 alone to boost the international competitiveness of its prized heavy industry.
- Industry support measures include a “pioneering” scheme to assist industry in transitioning away from fossil fuels through auctions. The so-called “climate contracts”could inject dozens of billions of euros in subsidies into helping to make the production of steel, cement, chemicals and other materials climate neutral.
- After a long period of resistance, companies are fully taking on the challenge and see business opportunities in the global net-zero industry race. However, several German companies in February joined a declaration signed from industrial companies from across Europe that calls for an industrial policy plan to complement the European Green Deal and maintains high-quality industry jobs for European workers.
- Green hydrogen is seen as key to decarbonising industrial processes. Germany aims to become a global technology leader and has laid down plans in the national hydrogen strategy. The government also plans to present a hydrogen import strategy. In February 2024, the EU Commission greenlighted about 4.6 billion euros in German state aid for establishing an industrial infrastructure for green hydrogen use.
Buildings
Buildings
- Buildings are responsible for 15 percent of total GHG emissions, mostly through heating and cooling with fossil fuels (only direct emissions; excludes emissions from electricity use, district heating, industrial buildings).
- 2022: 50 percent of German homes heated with gas, 25 percent with oil, 15 percent with district heating. Sales of new heating systems climbed to a new record in 2023, with gas-based systems accounting for 60 percent of all new purchases.
- The buildings sector has failed to meet its annual emission reduction targets since 2020.
- Government goals include no more fossil fuel heating systems by 2045 at the latest; the step-by-step de facto ban on new fossil heating systems; and 500,000 newly installed heat pumps per year from 2024. Sales of low-carbon heat pumps accounted for 27 percent of new sales in 2023 and grew considerably by about 356,000 units.
- Germany is faced with a stagnation of the rate of energy-efficient refurbishment of the existing building stock. Final energy demand of residential buildings has risen in recent years. Confronted with a crisis in the construction sector and a housing shortage, the government decided to suspend the tightening of new building efficiency rules initially planned for 2025.
- The government plans a subsidy programme worth billions of euros for the installation of climate-friendly heating systems.
- The government introduced a law to oblige communities to come up with municipal heat planning. It aims to fund the expansion and decarbonisation of district heating (still mostly gas and coal-fuelled).
Mobility
Mobility
- The sector is responsible for nearly 22 percent of total GHG emissions.
- Transport has been dubbed the “problem child” of the transition, as emissions are falling much slower than in other sectors. Transport has also repeatedly failed its annual climate target, and the government failed to deliver proposals to get it back on track.
- Car-country Germany has many policies that support the use of passenger cars, including no general motorway speed limit, and still often tries to accommodate the needs of the country's car makers, which have invested in expensive, high-end combustion engine models like ever bigger SUVs.
- Germany is aiming to have 15 million electric vehicles and 1 million public charging points on the road by 2030. The number of EVs registered in the country stood at 1.4 million in 2023.
- Tarnished by the dieselgate scandal, iconic carmakers VW, BMW and Daimler struggle in the global race to green auto transport with heavy competition, for example from the U.S. and China.
- Rail development is slow, with few signs of improvement. Rail operator Deutsche Bahn has become the target of strong criticism as long-delayed investments in infrastructure is causing severe disruptions in long-distance travel. As a measure to help struggling households during the pandemic, Germany introduced a 49-euro flat-rate ticket for regional and local travel. Mobility experts say there are too few attractive public transport services in rural areas for a serious shift away from the car.
- Freight produces one-third of transport emissions in the trade hub in Europe’s heart. Volumes are growing, but greening the sector remains a sideshow.
- Low water levels in the Rhine river — Germany’s most important shipping route for raw materials — as a result of climate change threaten to severely disrupt supply chains reliant on water transport.
Agriculture
Agriculture
- The sector is responsible for 8 percent of total GHG emissions (mainly methane from livestock farming, nitrous oxide as result of nitrogen fertilisation; excluding LULUCF).
- Emissions have fallen by a quarter since 1990, in large parts in years after the German reunification, when livestock numbers were reduced. They accounted for about 9 percent of total emissions in 2023.
- Like everywhere in the world, the reduction of emissions in farming also depends on shifts in food consumption, often part of polarising debates when they require changes to personal lifestyles and traditional eating habits.
- Annual meat consumption in Germany is in decline, and many people consider the impact their dietary choices have on the environment and climate.
- Policymakers are in close talks with farmers to balance their needs with the need to mitigate and adapt to the effects of climate change. However, protests against decarbonisation measures by the farming industry dominated headlines in early 2024 - even though climate policy was widely regarded as a trigger rather than an underlying cause for the farmers' dissatisfaction.
Land use, land-use change and forestry (LULUCF)
Land use, land-use change and forestry (LULUCF)
- Taken together, forests, peatland, meadows and other land in Germany are net carbon sinks in some years, and a net greenhouse gas emission source in other years (-2 million tonnes CO2 equivalent in 2022).
- Climate law target: -25 mln tonnes by 2030, -35 mln t by 2040, -40 mln t by 2045.
- The environment agency (UBA) says the emissions trend is “increasingly dramatic,” as recent years have shown decreasing net carbon storage in forests and high emissions from organic soils of farmland and grassland.
- The government introduced measures for natural climate action, and a moorland strategy.
Find an interviewee
Find an interviewee from Germany in the CLEW expert database. The list includes researchers, politicians, government agencies, NGOs and businesses with expertise in various areas of the transition to climate neutrality from across Europe.
Get in touch
As a Berlin-based energy and climate news service, we at CLEW have an almost ten-year track record of supporting high-quality journalism on Germany’s energy transition and Europe’s move to climate neutrality. For support on your next story, get in touch with our team of journalists.
Tips and tricks
- CLEW’s Easy Guide to Germany’s transition with background information and links to key energy and climate data.
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