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.
- As Europe’s largest economy, Germany is a key energy hub in the heart of the continent.
- Greenhouse gas emissions have decreased 40 percent since 1990 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, 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. Germany is set to miss its national climate targets in the future, which could also entail a costly EU target miss.
- Germany is emerging from both the pandemic and the energy crisis less scathed than many feared, as mild temperatures, savings and the successful yet costly search for alternatives to Russian energy sources have prevented shortages, and the state supported businesses and citizens grappling with rising prices. The country is better prepared as it enters the second winter without Russian gas, but it is looking at a rather slow recovery with the government projecting the economy to contract about 0.4 percent in 2023.
- The energy crisis caused the government to double down on renewables expansion and speed up the transition.
Major transition stories
- Climate foreign policy – Germany is seen as a credible leader in international climate talks despite shortcomings at home, and has hosted governments for the annual Petersberg Climate Dialogue for more than a decade. The government is working on a climate foreign policy strategy (alongside the security policy strategy and a China strategy), which might still be presented 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 might need support to manage the changes. This is set to become a big issue not only in Germany, when the new EU emissions trading system for transport and buildings starts in 2027.
- 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 – Fifteen years after its first climate adaptation strategy, and despite the deadly floods and droughts, Germany is still failing to integrate climate adaptation into everyday decision-making at all levels. The government has proposed a federal climate adaptation law to set the framework. This does not yet stipulate measures, but obliges the government to present a climate adaptation strategy by September 2025 at the latest, and to update it every four years.
- Carbon removal – Forests and wet peatland are among the natural carbon sinks that exist today, but investors are getting ready to develop technological carbon removal and storage solutions. After years of hesitation and a de facto ban on CO2 storage, the quest for climate neutrality has put technological solutions like CCS back on the table to deal with unavoidable emissions. The government plans to present a carbon management strategy in 2023, and is also working on a strategy on negative emissions.
- 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, recent 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.
- 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, but also a China strategy. The EU is working on a raw materials act.
- ‘Climate neutral’ products and companies – Companies across the globe have started a race to declare themselves and their products "climate neutral." Hardly a day passes without a firm announcing a net-zero target or launching 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.
- The sector is responsible for 34 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 and a push for raising their share in the power mix from 4 percent in 1990 to 46 percent in 2022 (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. While wind power expansion is picking up, but is still off the 2030 target path, 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 renewables share in overall energy use was at 17 percent in 2022 (1 percent in 1990).
- 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 domestic LNG buildout and more coal use in the short term.
- The sector is responsible for 22 percent of total GHG emissions; most industry emissions are covered under the EU ETS.
- Germany is set on saving its world-renowned industry (e.g. steel, chemicals, cement) by making it climate-neutral. However, the government coalition disagrees on how to do this. Among the controversial issues is the question of whether to provide industry electricity price subsidies.
- After a long period of resistance, companies are fully taking on the challenge and see business opportunities in the global net-zero industry race.
- 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, which was updated in 2023. The government also plans to present a hydrogen import strategy.
- There are lots of state support programmes, such as the government-launched industry “climate contracts” – auctioned subsidies for businesses for their switch to climate-friendly processes.
- 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.
- 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.
- 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).
- The sector is responsible for 20 percent of total GHG emissions.
- Transport is called the “problem child” of the transition, as emissions remained largely unchanged from 1990 until the pandemic hit. The sector failed its 2022 climate target and the government failed to deliver proposals to get it back on track.
- Car-country Germany has many car-centric policies, like 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 aims for 15 million e-cars by 2030.
- Tarnished by the dieselgate scandal, iconic carmakers VW, BMW and Daimler struggle in the global race to green auto transport with heavy competition e.g. 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 critcism 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 flat-rate ticket for regional and local travel. Federal and state governments are quarrelling again over the financing of the 49-euro-ticket. Overall, mobility experts say there are too few attractive public transport offers 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.
- 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.
- 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.
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: -25mln tonnes by 2030, -35 mln t by 2040, -40mln 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.
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