Merz government urged to table convincing climate and energy plans in first 100 days
Friedrich Merz has been made Germany’s new chancellor – but only after being forced into an unprecedented second round of voting in parliament. Exactly six months after Olaf Scholz declared the collapse of his own coalition government, his conservative opponent Merz was sworn in amid scenes of confusion and drama in Germany’s Bundestag following the temporary defection of several lawmakers belonging to one of his coalition’s parties. While Merz and his government cabinet - consisting of ministers from the conservative Christian Democrat Union (CDU), its Bavarian sister party Christian Social Union (CSU) and their partner the Social Democratic Party (SPD) – were eventually able to begin their work, the commotion hinted at potential internal difficulties facing the new government, including regarding upcoming climate and energy policy decisions.
The previous government’s early collapse left over a raft of unfinished policy business. Above all, the new government must approve a final budget for 2025 and provide clarity on how it intends to fund its projects, including payments from its 500-billion-euro special fund for infrastructure and climate neutrality projects. Among the first actions the new government is expected to take are cuts to the electricity tax and grid fees that the CDU/CSU and the SPD already agreed on before finalising the coalition treaty. The energy ministry is also expected to quickly launch a monitoring of central energy system variables, including projected future power demand, which will serve as a guide for the planning of renewables, storage capacity, and grid expansion. It will also quickly have to launch auctions for new gas-fired power plants to complement renewables as back-up capacity.
The relatively tranquil coalition negotiations that preceded the chancellor’s nail-biting election in parliament on 6 May had raised hopes of a smooth start for the new CDU/CSU-SPD government, the coalition that has governed Germany for the better part of the past 25 years. “Eighteen lawmakers from the coalition parties rejected their consent and almost provoked a real crisis,” Ursula Heinen-Esser, a former member of parliament for Merz’s CDU, told Clean Energy Wire. “I hope that the coalition from now on is seen as acting professionally and avoids internal mistrust.”
The new government will have to “make a real effort in its first 100 days, not least in climate and energy policy”, said former lawmaker Heinen-Esser, who led Germany’s delegation to the 2013 UN climate summit. For Heinen-Esser, the fact that climate action received relatively little attention in the coalition agreement compared to the previous government is due more to a fast-changing political environment than to a lack of interest from the coalition. Fast decisions on a wide range of climate-related issues are needed until mid-August, the end of the government’s traditional 100-day grace period, she argued.
Simone Peter, head of German Renewable Energy Federation (BEE), shared the view that the new government had put forth a solid groundwork for “future-proof energy policy” in its coalition treaty and welcomed Merz’s staffing choices. However, the ministries for transport, agriculture, and construction would be under pressure to enact change, as these sectors had repeatedly missed climate targets in the past. Peter said that safeguarding continued energy transition investments and a “flexibility agenda” to better balance power supply and demand in the system would be among the most urgent energy policy tasks for the Merz government’s first 100 days in office. Sudden and disruptive turnarounds on funding, as happened with the previous government’s debt brake fiasco, must be avoided, Peter stressed. “Planning security remains the leading principle.”
Energy cost concerns could clash with Germany's role as EU climate ambition underwriter
Secure planning and investment conditions were sorely lacking for many companies in the BEE and beyond in the past years. The energy crisis, fast inflation and constant internal government disputes about key energy policy questions dominated the three years of Scholz’s government, which at the beginning of its term in 2021 envisaged a green growth miracle based on climate friendly technologies. However, the series of international crises, as well as domestic policy shortcomings, instead ushered in a period of severe economic difficulties for Germany that engulfed the powerful industry sector of Europe’s largest economy. This led to decarbonisation efforts by citizens and lawmakers tumbling down the list of priorities as greater urgency was given to other issues.
Germany’s industry, though, never lost sight of the goal of decarbonisation, Matthias Belitz, head of the association of Energy Intensive Industries Germany (EID) told Clean Energy Wire. Companies were “working intensively” on solutions to bring down the carbon footprint of basic materials like paper, glass, steel, cement, or plastic, the industry lobbyist argued. A successful transformation towards climate neutrality, therefore, would be a decisive factor for the industry’s future: “Many companies currently are no longer competitive,” he said. Belitz said that ensuring a quick financial relief for industrial producers would be a good marker of success for the first 100 days of Merz’s government. Likewise, the new government has to quickly provide legal clarity on carbon management solutions (CCS/CCU) and draw up a plan for lowering the energy system’s costs in the long-run. “There must now be a consistent focus on affordability, cost efficiency and security of supply in all areas,” the EID head said.
By contrast, climate activist group Fridays for Future (FfF) warned against shifting the focus away from ambitious emissions reduction policies and their successful implementation: “The first 100 days under Merz will be a litmus test,” the activist group said, adding it would immediately start monitoring the new government’s climate efforts. The coalition treaty had so far offered little optimism that the coalition will treat the topic with the urgency it deserves, FfF argued: “Instead of ambitious climate measures you find a continuation of fossil fuel use, an expansion of gas infrastructure instead of a renewables boost,” the group said ahead of a protest planned for the first Friday under Merz as chancellor at the end of this week.
Germany has a key role to play in positioning the EU as a counterweight to the onslaught against international climate action unveiled by Donald Trump’s US government. Merz’s first international trips, first to France and Poland and then to Brussels, take on great significance for a coherent European climate action approach. The director of the Potsdam Institute for Climate Impact Research (PIK), Ottmar Edenhofer, said it was welcome that the new government had renewed Germany’s commitment to national and European climate targets. However, a clear positioning on key EU climate projects, including the Green Deal, the new emissions trading system ETS2, or the Carbon Border Adjustment Mechanism (CBAM) are needed from Berlin to truly support progressive emissions reduction in the EU, he argued.
“Currently, there are voices in Warsaw, Prague and Bratislava, for example, calling for a postponement” of the ETS, which is scheduled for introduction in 2027, said Edenhofer. While concessions could be made on the emission trading scheme’s design, it must be ensured that the ETS2 is introduced as planned, he argued. Merz’s coalition would have to throw its full weight behind EU policies to bolster European industry and incentivise climate measures outside of Europe, he added.
“We will see productive controversies between the economy and the environment ministry"
However, Merz’s coalition will also have to demonstrate that it can resist populist calls championed by the far-right Alternative for Germany (AfD) party for lifting climate policies at home. The climate-denialist party that already enjoys strong backing eastern Germany recently eclipsed the CDU/CSU as the strongest party in a national poll for the first time. The group was also classified as a “proven right-wing extremist” organisation by the country’s chief domestic intelligence agency just days before Merz’s election in parliament.
For Merz’s fellow CDU member Heinen-Esser, mastering domestic challenges in a socially just way will be paramount for ensuring an overall effective climate policy from Berlin. To her, this includes answers on what a reformed German heating law will look like to advance transformation in the sector, and preparing Germany for the impact of the new carbon price for transport and heating. In this regard, the fact that a compensation mechanism for citizens, the so-called climate bonus payments, had been dropped from the coalition treaty would point in the wrong direction. “More needs to be done with respect to social balancing measures. Energy price reductions alone will not cut it,” she said.
With the nomination of energy manager Katherina Reiche as the new minister for the economy and energy, Merz had made a good choice for achieving progress in the sector, Heinen-Esser argued. “Reiche is probably the most technically competent energy minister we ever had.” While the new minister’s focus is likely to be on cutting energy prices, Reiche would understand that decisions require coordinated efforts between industry, municipalities and the federal government to succeed, Heinen-Esser added.
While Reiche's ministry will no longer directly oversee climate policy as it did under the previous government, the implementation of the energy transition - as well as industry decarbonisation – are still the direct responsibility of her department. Her vocal commitment to the Paris Agreement’s targets has raised hopes that she will continue to treat climate action as a priority amid a general cooling of ambitions. The fact that climate policy had been moved out of Reiche’s ministry and back to the environment ministry must not mean that the topic is relegated to a minor role, Heinen-Esser said.
The new government is required by law to present a climate action programme with measures that ensure Germany reaches its climate targets within the first 12 months of the legislative period’s start, so by the end of March 2026. On 15 May, the government-appointed Council of Experts on Climate Change presents its assessment of emissions data for Germany. If the experts say that Germany is projected to overshoot its climate targets until 2030, the new government must present additional climate action measures before the year is out.
“Climate policy at both the national and international level will now come from one source again,” after the two spheres were allocated between the economy ministry and the foreign ministry, said Heinen-Esser. “Putting climate back into the environment ministry is going to really strengthen this department,” she argued, adding that the designated minister, Social Democrat Carsten Schneider, would be a good pick and will know how to leverage the topic without shying away from conflicts. “We will see productive controversies between the economy and the environment ministry, especially on climate and energy.”
Some of these controversies became visible during the coalition negotiations: The SPD’s internal climate advocate group “Klima.Gerecht” had harshly criticised the coalition treaty’s handling of emissions reduction and recommended SPD members to reject the deal. SPD secretary general Matthias Miersch, at a party event, told internal critics of the coalition treaty’s lacking climate ambition that negotiations with the CDU/CSU had proven very difficult on this topic, news magazine Der Spiegel reported. “Sometimes you felt that you’re living on a completely different planet,” Miersch said with a view to the opposing views of the new coalition partners.
