Energy infrastructure investments, faster permitting priorities for new German government

The new German coalition government has agreed which measures and policies to tackle as priorities in the coming months, including an act to unlock hundreds of billions of euros for investments in infrastructure and climate, and rules that speed up permitting for hydrogen and wind power infrastructure.

“We have the duty to set the course now so that Germany is a safe harbour for investments,” said finance minister and co-leader of the Social Democratic Party (SPD) Lars Klingbeil at a press conference. He added that businesses across the world were currently assessing where best to invest, and sent an invitation to experts in the United States thinking about leaving the country. “I want to state the clear offer to scientists from the US who do not know whether they want to stay in that country: This [Germany] is a good place to do research.”

Germany's new coalition government has set out a steady but cautious path on climate and energy policy, committing to current EU targets but showing little ambition to go beyond. The coalition’s so-called “immediate action programme” does not contain major provisions beyond what is already laid out in the coalition agreement.

The plan high-lighted the pre-agreed establishment of a special fund for infrastructure and climate neutrality worth 500 billion euros through a dedicated law, tax incentives for e-mobility (no details), lowering the electricity tax and grid fees, and a reform of the CO2 storage law as key priorities to be implemented in the coming months.

Chancellor Friedrich Merz (CDU) said he hoped that several measures such as reducing bureaucracy would be decided by parliament before the summer, but did not specify which. “We don't want to rush things, but we are working quickly,” he told journalists in Berlin.

Energy industry association BDEW welcomed the government’s push for speed, as the break-up of the last coalition had cost the country valuable time. However, the organisation’s managing director Kerstin Andreae criticised the fact that planned construction of new gas power plants is not part of the immediate action programme. “The corresponding tenders by the Federal Network Agency (BNetzA) must still take place this year,” she said. “They are a basic prerequisite for the coal phase-out and security of supply.”