EU climate plans near top of Germany’s "coronavirus presidency"
The agenda for the German EU Council presidency starting on 1 July was filled to the brim even before the global pandemic upended years of planning by the federal government. Chancellor Angela Merkel has made clear that tackling this “biggest challenge in the history of Europe” will be the focus over the coming six months. Researchers and politicians alike have called Germany’s tenure the “coronavirus presidency”.
While climate and energy may play second fiddle, they are set to play a strong role in the pandemic recovery efforts. Merkel has called for a recovery plan that speeds up the transformation to “a new way of working and economic activity” – a transformation she said is driven by climate change and digitalisation. And EU leaders have to agree on a 2030 climate target before the year is out.
“There were already high expectations for the German Council presidency even before the COVID-19 crisis and now they are even higher,” says Sophie Pornschlegel, senior policy analyst at the European Policy Centre (EPC). Germany is one of the biggest and economically most powerful countries in Europe, which already sets the bar high, she told Clean Energy Wire (full interview). In addition, there are many important deadlines in the second half of 2020, such as the negotiations on the long-term budget (MFF) and Brexit. “Now, the ‘Next Generation EU’ recovery package comes on top.”
Pornschlegel says the recovery plan and the long-term budget are “where one can really push for a good sustainability agenda” and Germany should use this opportunity early in the presidency. If, however, the climate and energy agenda is pushed to the end of the presidency’s term, “that means not much will happen,” she warns.
Agreement on 2030 target and climate law main objective – official
Before the coronavirus crisis hit, the EU and Germany were seen to hold a pivotal role in driving global climate ambition in 2020. Germany had long planned to put a focus on climate action and – in the words of environment minister Svenja Schulze – use the presidency to “march ahead and pull others along”, such as China. A meeting of EU and Chinese leaders was scheduled to take place in Leipzig in September and many hoped it would produce some kind of joint climate announcement. Due to the pandemic, the meeting has been postponed, as has the UN climate conference COP26 in Glasgow, and priorities were reset.
If and when the EU-China meeting does take place, climate will still be on the agenda, said minister of state in the foreign office Michael Roth in a recent video conference. He said Germany will push for three things: an investment agreement, “strong commitments in the fight against climate change”, and a closer cooperation in third countries, including African countries. Roth said he still hoped the meeting would take place not just virtually “but also physically, maybe in Leipzig or another nice German city.”
We have two major process objectives on climate policy for the presidency: to reach an agreement among member states on the proposed EU climate law and on the 2030 target.
Leaders of Merkel’s coalition government published a short statement after a meeting on 22 June which confirmed the central themes of a recent draft of the German Council presidency programme, including “a sustainable Europe”. The draft, seen by Clean Energy Wire, is somewhat more detailed and names an ambitious climate and environmental policy as one of the priorities. The cabinet plans to adopt the final programme on 24 June. German officials have continued to emphasise the climate focus in public statements over recent weeks, with environment minister Schulze saying “the fight against climate change is at the top” of her presidency agenda.
"We have two major process objectives on climate policy for the presidency: to reach an agreement among member states on the proposed EU climate law and on the 2030 target," says Eva Kracht, who heads the Europe department in the environment ministry.
This agenda, says analyst Pornschlegel, is purely driven by European and international developments and is not a new initiative by the German government. “The German presidency does not want to be too creative on this and will instead support what’s already out there. It’s quite a pragmatic approach.”
Even so, success will be no small feat. The negotiations for an ambitious 2030 target were always going to be a challenge, but the pandemic has intensified this. Several countries, such as the Czech Republic, have said that they want to wait for the results of a cost-benefit analysis the European Commission has promised for September. Based on this impact assessment, the Commission will then make a concrete proposal, and the more critical member states are bound to have a very close eye on what it would mean for their economies.
Other obstacles to reaching an agreement include the decision on whether to create new climate policy instruments or act within the boundaries of the main two current ones. Here, the question will be whether to put more emphasis on reduction in the sectors covered by the EU Emissions Trading System (ETS) or on the so-called effort sharing sectors like transport and buildings. Many countries, including Germany, have struggled to bring emissions down in these areas, and chancellor Merkel has said that difficult negotiations would await on how to allocate efforts to the different member states.
In addition, a planned carbon border adjustment mechanism is supposed to play a central role in shielding European industry from carbon leakage should the EU increase its climate ambition. A concrete proposal for such a mechanism will likely not be presented any time soon.
Leading German scientific institutions just published a joint statement with recommendations for a path to greenhouse gas neutrality in Europe. Aside from “no regret” measures including strengthening wind energy and photovoltaics, and expanding power transmission and distribution grids, as well as e-mobility, the institutions see a cross-sectoral, EU-wide uniform CO₂ price as a cornerstone of climate action.
Chancellor Merkel has said she “welcomed” the general recommendation by the Commission to increase the EU’s greenhouse gas reduction target to -50 to -55 percent over 1990 levels, from the current -45 percent – a wording adopted also in the draft programme.
Time is pressing. The Paris Climate Agreement requires the European Union to “communicate or update” its nationally determined contribution (NDC) – its 2030 target for reducing greenhouse gas emissions – by the end of this year, so a decision has to be found during the German presidency.
"If we don't manage to find an agreement on the 2030 target this year, we have a political problem," the environment ministry’s Kracht told Clean Energy Wire.
The draft programme also states Germany will work to ensure that the EU and its Member States continue to act internationally as ambitious and active players for climate diplomacy. It wants to accompany the Green Deal with an “active energy foreign policy” and update the EU energy diplomacy action plan.
“We are mediators. We don’t want to dominate the European Union” – minister of state
For the first time in 13 years, Germany will hold the EU Council presidency over the next six months. The Council represents the executive governments of member states, and the presidency rotates among EU member states every six months. It is not only responsible for setting policy priorities and planning and chairing meetings among ministers and heads of government, but it must also try to reach agreement on laws with the EU’s other legislative bodies – the Commission and the Parliament.
“During the presidency we are mediators,” said minister of state Roth. “We don’t want to dominate the European Union.” Much in the same vein, Roth also praised cooperation within the framework of the so-called “trio presidency”. Together with the two next Council presidencies, Portugal and Slovenia, Germany is part of a trio that has developed a more long-term programme, although it remained vague on energy and climate.
Pornschlegel says while the Germans do not want to be seen pushing too much for their own national interests, they are a country that carries a lot of weight. “Unfortunately, it is still the big countries that have the power in Europe,” she says. In addition, Germany is far from being a neutral actor, for example when it comes to agreeing a coronavirus recovery package. Germany and France had presented a joint proposal in May. “When you are Germany – and when you have a Franco-German initiative – you can definitely move things forward,” says Pornschlegel.
This conflict will be one of the difficulties for Germany over the coming weeks, she says. “In public statements to date, [the government] has shown that it really wants to be an honest broker and find an agreement, because the presidency’s success depends on it.”
The home country of the Energiewende often portraits itself as a leader on energy transition and climate policy and past international efforts have earned Merkel the nickname “climate chancellor”. But while the country passed a climate action law and decided to quit coal, it has dropped to rank 20 in the World Economic Forum's Energy Transition Index. Many international observers also point out that its coal exit plans lack the ambition of other countries such as Spain and criticise that the country is too prone to protect its car industry, still producing mostly fossil-fuel powered cars.
EU recovery programme first test for German presidency
Pornschlegel says the negotiations for the recovery programme including the long-term budget can be considered a first test for the German presidency and timing is of the essence. If EU leaders do not manage to find a deal during a planned meeting in July, then things will get difficult for the German presidency, she says. By contrast, “having an agreement by July would be setting the tone and making things much easier for the Germans.”
While Germany has not said it aims to make green growth the underlying condition for all recovery support, it does aim to give it a nudge. “Our goal is to use the negotiations to give the topic of greening the economy an extra push,” a government official told Clean Energy Wire ahead of a video conference on 19 June in which European leaders exchanged first views on the recovery package.
In her speech before parliamentarians, chancellor Merkel had said that the European Commission’s growth strategy Green Deal “offers a central guideline and also a great opportunity in regards to economic recovery, especially for European companies with a high level of innovative strength.”
The European Commission’s Next Generation EU plan proposes to set aside 25 percent of all funding for climate action and includes a “do no harm” test which will in principle exclude support for fossil fuels.
It remains to be seen to what extent member states include green growth in the end. The environment ministry’s Kracht told Clean Energy Wire that "there is the idea to hinge economic recovery funds on certain climate conditions”, without giving details.
European Commissioner in charge of the Green Deal Frans Timmermans has said there is an “appetite” in the European Parliament and the European Council to accompany the planned increase of Just Transition Fund support with criteria, for example that it could have consequences if a country does not commit to the goal of climate neutrality by 2050.
Using the recovery funds in return for a commitment to more ambitious climate targets might be “a step too far and create even deeper political rifts on the issue,” warns Michael Pahle, head of the climate and energy working group at the Potsdam-Institute for Climate Impact Research (PIK).
In the end, attempts to push through climate conditionalities might fall victim to the need to hammer out an agreement on the bigger package, says Pornschlegel. She said the German government should try to dedicate more funds to climate action and digitalisation in the long-term budget, because the recovery package is more short-term.
My feeling is that many countries are already looking at Germany and that it has gained credibility with the better-than-expected stimulus programme proposal.
Germany does not see the negotiations surrounding the long-term budget and the recovery fund as a first test for its presidency, the government official told Clean Energy Wire. “We are an important member state, but in the end we have one vote and everyone has to agree.” The official added that European Council president Charles Michel is responsible for the talks and Germany would aid where possible. This usually also extended to bilateral talks between Merkel and other leaders.
German environmental NGOs had called on the government to use its presidency of the EU Council to urge other member states to align their national stimulus packages with climate action. “My feeling is that many countries are already looking at Germany and that it has gained credibility with the better-than-expected stimulus programme proposal,” Germanwatch chairwoman Silvie Kreibiehl told the Clean Energy Wire. “Germany can move the discussion forward.”
“A higher target has to be underpinned by instruments”
While the greater agreements on a green recovery or a more ambitious 2030 climate target is necessary and important – and Germany can help facilitate them – these also have to be filled with life to be successfully implemented. As is so often true, the devil is in the details – in this case the details of countless EU regulations.
“The problem is that the required reform and further development of instruments like expanding the EU-ETS is not really tackled, because we lack the necessary EU process,” PIK’s Pahle told Clean Energy Wire. He warns the Commission’s impact assessment may be delayed, because some parts have to be re-worked due to the pandemic. The assessment is meant to kick-off the official debate on the 2030 target, but it might not be published by September or October as planned. “So it is quite possible that the German presidency will not get to moderate the debate on how to reach higher greenhouse gas reduction target. In that respect, that’s bad luck on timing for the presidency.”
Pahle says a higher target must be underpinned with instruments. “We are in a situation where basically everything has to be re-adjusted, because everything is interlinked and some things are incompatible.” He adds that the necessary legislative processes will not start before next year.