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Q&A: What does the German coalition government’s new formation mean for climate change?

Q&A: What does the German coalition government’s new formation mean for climate change?

Voting intentions in the run-up to the federal election

After two months of negotiations, three parties have agreed to form a government in Germany. deal that includes plans to rapidly scale up renewables and “ideally” phase out coal power by 2030.

Climate change was a major issue in a federal election, which coincided with the occurrence of deadly flooding in western areas of the country. linked toGlobal temperatures are rising

In September, the Social Democrats (SPD), a centre-left party, won and has since reached a coalition deal with the Green party as well as the pro-business Free Democrats. They will form the first “traffic light” coalition government at federal level. 

This is the end of an era. 16-year period in which Angela Merkel’s Christian Democratic Union (CDU) ruled in coalition and oversaw significant expansion of the nation’s renewable power, but also faced criticismfor phasing away nuclear and continuing reliance on coal

With the SPD’s Olaf Scholz set to take over as chancellor of Europe’s largest economy – and biggest emitter – his government’s decisions on energy and transport will have major implications. The nation is currently not on trackto meet its newly revised climate targets.

In this piece, Carbon Brief explores the current state of climate action in Germany and the path ahead for its new government, including the details laid out in a new treaty that will form the basis of the coalition’s policies.

What is the current state of climate politics Germany?

This year’s federal election was marked out as different when polls briefly showedThe Green Party overtakingThe CDU, a centre-right ruling party, and its sister party, the Bavarian Christian Social Union(CSU), were in public favor for the first time since years.

This is evident in the chart below. As the year progressed, the SPD overtook the Greens in the CDU coalition partners. 

Voting intentions in the run-up to the federal election
Voting intentions in the lead-up the federal election. Source: Clean Energy Wire.

This progressThe Greens were attributedIn part, this is due to the importance climate change has in Germany’s electorate. The party won the election. tookAfter the dominant SPD and CDU, the third-largest percentage of votes was won by CDU. This earned them a key role in the new coalition.

ManyAnalysts and pundits dubbed it the “climate election”, although others arguedMany voters were not as influenced by climate concerns as originally predicted. 

Various pollsThe polls in the lead-up to election day showed that climate change was a concern for Germans. IpsosPublished at the beginning September foundThey were the most anxious of all those who were surveyed.

Germany has seen a lot of growth in recent years. has beenNumerous times, extreme weather conditions, including floods and droughts, have struck. protest movement has emerged. 

At the height of election campaign, floods devastated areas of the country. killing around 200 people. A next attribution study revealedThe rising global temperature made the event nine times more likely. 

The election took place during a period of intense scrutiny for German climate policies. Despite years of renewable power growth, the country has not been able to meet its climate goals. Energiewende – energy transition – to shift away from both coal and nuclear power, the country has nevertheless made mixed progresson reducing its carbon emissions.

After admitting it would fall short of the country’s climate goal for 2020, the coalition CDU/CSU and SPD government introduced Germany’s first ever climate action law in 2019, legally defining its emissions targets for the first time. 

The package was however, dismissed by NGOs and thinktanks as “shockingly feeble” and “far too cautious”, in part due to its low carbon price.

A landmark court decision was made just before the election. ruled that Germany’s climate law was insufficient on the groundsIntergenerational justice: The government must provide details about its emission reduction targets beyond 2030 to ensure transparency. 

In response to the ruling, the German parliament amended and rewrote the law. bring forwardIt will increase its net-zero target by five more years to 2045, and tighten its 2030 goal from a 55% reduction compared to 1990 to a 65% reduction over the same period. It also set a new target to cut 88% by 2040.

However, some parties opposed the bill includingThe FDP and the Greens joined the SPD as a coalition. The Greens demanded more ambition, while the FDP called it inefficient. 

In July, the European Commission published its proposals for how Europe (EU) should accelerate its climate action in order meet its legally binding target of reducing emissions to 55% below 1990 levels. This is known by the “The European Commission”. “Fit for 55” package.

The member states will have to negotiate the proposed changes. welcomed by then-state environment secretary and SPD politician Jochen Flasbarth as “nothing less than a new industrial revolution in the EU”.

Coal fired power station, Germany
Germany, Coal-fired power station Credit: Clynt Garnham Environmental / Alamy Stock Photo.

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What are the coalition parties’ positions on climate change?

There is a common consensus in German politics regarding climate change. every major partyGoing into the election, I support a net zero target of 2040 and 2050. Only the Alternative for Germany (AfD), which is far-right, will be elected. explicitly opposesClimate action

However, the parties have different approaches to climate change that are likely to shape Germany’s progress in the coming years under its new “traffic light” coalition government of the SPD (red), FDP (yellow) and Greens.

Broadly speaking, the Green party has the most ambitious climate policies, campaigning for a petrol and diesel car phaseout by 2030, 100% renewable electricity by 2035 and, if that is achieved, the party says net-zero emissions would be possible “within 20 years”.

FDP on the other hand did not campaign for targets to reach 100% renewables or phasing-out fossil-fuelled vehicles, but called for a net zero target for 2050.

Finally, the SPD, which received nearly as many votes overall as the other parties, has a more middle of the road approach to climate change action. Its net-zero manifesto target for 2045 was the same as that recently adopted by German law. The SPD also had a goal of 100% renewable electricity by 2040.

These policies can all been viewed in a gridof manifesto pledges assembled Clean Energy Wire.

The SPD’s Scholz, who is expected to take over as chancellor in early December, is a relatively unknown quantity when it comes to climate issues. 

While he pledged to “halt man-made climate change” following the election result, his voting record shows he has focused more on regional issues in state parliament than climate policy, according to analysis by Deutsche Welle.

AnalysisThe consultancy conducted the survey before the election. DIW ECONcommissioned by the Climate Neutrality Foundation, concluded that none of the parties likely to end up in government had manifestos that matched up to the ambition of Germany’s climate goals. 

(This is perhaps not surprising, considering that these plans were nearly complete at the time that the climate legislation was revised in June.

Notably, the report concluded that the FDP’s strategy was the least ambitious on climate, and the Greens’ was the most ambitious, with the SPD in the middle.

These parties are now in coalition and could have significant differences in stances. 

As the chart below shows, the SPD, as the party with the most votes, has the largest remit but is only set to run two ministries viewed as important for climate goals – overseeing buildings and “economic cooperation and development”.

Expected structure of the new German coalition government
Expected structure of the German coalition government. The colours indicate the parties in charge of various ministries, including Greens (green), FDP(yellow), SPD (red). Source: Clean Energy Wire.

Meanwhile the Green party will be responsible for five ministries, including the environment and agriculture as well as a newly formed “super ministry” for climate, energy and the economy, led by the party’s co-leader Robert Habeck, who will also be vice-chancellor.

During negotiations, however, the Greens had also pushed to take on both the finance and transport ministries – both of which have significant climate responsibilities – but ultimately they lost out to the FDP.

While the party’s fiscally conservativeOutlook could be viewed as a barrier towards climate spending. Frank Steffe, a policy specialist at thinktank Agora EnergiewendeCarbon Brief: 

“We have the climate goals, we have the climate law, the European green goal and we have the Paris Agreement…. The FDP can read all these laws.”

He pointed out that the initial coalition treatyDespite not containing new spending figures, it does contain references to financial measures as well as strong language about reaching 1.5C.

FDP, who campaigned against speed limits and bans of petrol and diesel cars will now be charged with overseeing decarbonisation of German cars.

Dr Giulio Mattioli, a transport policy researcher Technical University DortmundCarbon Brief was told by, that the FDP supports market-based technology and solutions at the expense demand-side measures. It also emphasises the “strong emotional attachment of voters to cars”, he adds.

Nevertheless, Dr Brigitte KnopfSecretary general of the Mercator Research Institute on Global Commons and Climate ChangeCarbon Brief is told by (MCC).

“When presenting the coalition agreement, the new partners tried to give the impression that something new can be formed out of the old antagonisms and that Germany can really move forward…Even the FDP agrees to a ‘transformation of the automotive industry’ – acknowledging that the age of the combustion engine has come to an end.”

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How is Germany doing on its climate targets.

Germany has consistently fallen short of its climate targets. For yearsThere were warnings that the country would not reach its 2020 goal of reducing emissions by 40% compared to 1990 levels.

A 2018 government report suggested that cuts could be closer to 32%. A government report blamed unexpectedly high economic and population growth, although some observers have argued that the biggest threat to the government’s target remainsIts dependence upon coal power.

As the chart below shows, while there has been progress in cutting emissions from energy industries – including the power sector and other operations such as oil refineries – key sectors such as transportWe have not seen any significant changes.

Greenhouse gas emissions in Germany by sector, 1990-2020

Germany’s greenhouse gas emissions, 1990-2020 by sector. Preliminary data for 2020. The grey bar indicates a projection by thinktank Agora Energiewende for 2021 and the black bars indicate the government’s targets set in its climate law of a 65% cut from 1990 levels by 2030 and an  88% cut by 2040. Source: German Environment Agency, Agora Energiewende. Chart by Tom Prater, Carbon Brief Use Highcharts.

As it turned out: according toGermany, according to Agora Energiewende (thinktank), exceeded its 2020 targets by cutting its emissions by 42.3% in 1990 levels, as opposed to the 40% target.

This would not have been possible if it wasn’t for the economic shock caused by the Covid-19 pandemic, which caused a last-minute panic. dip in emissions, with the Environment Ministry itself admittingIts policies would have resulted only in a 37.5% drop.

Agora Energiewende did indeed conduct a recent analysis. suggestsAfter the Covid-19 drop, 2021 now has the fastest increase of emissions in at least 30 years.

Germany looks set to miss its next set targets in 2030 unless it implements more aggressive policies to close the gap. 

Official analysis from 2019 based on the original goal – a 55% cut by 2030 – suggested the government was far off track,. According to the latest government analysis, the country won’t be able to meet its new, more ambitious goal.

Instead of cutting emissions by at least 65% by 2030, the document was leaked. reportedGerman press reported in August that a 49% reduction was expected within this time frame. In 2040, the emissions would have fallen 67% rather than 88%.

The environment ministry arguedThe report was already out of date as August 2020 was the cut-off point. This meant that it didn’t include recent developments in climate policy which had occurred in the year since. 

Experts say that the new targets will require far more effort. Cora Herwartz, a Berlin-based policy advisor with thinktank E3GCarbon Brief:

“The new climate law put the incoming government under pressure to quickly come up with an implementation strategy fit to deliver the necessary emission cuts. Otherwise, Germany will not be able to reclaim its climate frontrunner role in a credible way.”

Germany now generates nearly half its electricity from renewables. It has overtaken fossil sources for the first-time in 2020 after years of struggling to find the right balance. investment. However, despite roughly halving coal useIts grid has remained heavily dependent on fuel since 2015, making it one the major barriers to further decarbonisation.

While wind and solar have experienced enormous growth under Germany’s Energiewende, the accompanying shutdownPart of the expansion of nuclear power plants simply means that one form of clean energy has been replaced by another, as the chart below illustrates.

Electricity generation in Germany by fuel, 1985-2020

Germany’s electricity generation by fuel, 1985 – 2020 (Terawatt hours). Source: BP Statistical Review of World Energy 2021. Use Carbon Brief to create your chart Highcharts.

In order to avoid a “green electricity gap”, Prof Claudia Kemfert, who is the leader in energy, transport and environment at the German Institute of Economic Research(DIW Berlin), told Carbon Brief before the election that annual growth rates of renewable technologies must be tripled. 

“Not only because Europe has tightened its climate targets once again and Germany must quickly follow suit. But above all because the German government is clearly underestimating future electricity demand,” she added. (The most recentAccording to the government, 2030 electricity demand was expected to reach 658 Terawatt-hours (TWh), but the new coalition agreement accounts for demand rising to 680-750TWh.

Dr Ralph Harthan, a senior researcher from the Öko-Institut, which helps to produce the reports assessing Germany’s climate progress, tells Carbon Brief that other areas also present significant challenges:

“Due to the inertia of the capital stock, the buildings and the transport sectors constitute the most significant challenges for achieving the 2030 emission targets”

A proposal by a group German thinktanks was released in August called for whichever government took power to “implement a comprehensive climate action emergency programme in its first 100 days”. Their 50 recommendationsThese targets were to be achieved by 2030. A number of them have been adopted (see below).

  • A coal power phaseout before 2030 rather than 2038
  • Expanding renewables to cover 70% power generation
  • 14 million electric cars are on the road.
  • One-third of the distance covered by lorries to be “CO2 free”.
  • €12bn per year to fund zero-carbon new buildings and green renovations.
  • Introduce carbon contracts for difference(CCfD), to help decarbonise heavy industrial.

The required action would constitute the “biggest climate action programme in the history of the federal republic”, accordingDr Patrick Graichen (Agora Energiewende executivedirector), who has sinceAssumed a role in the new climate ministry.

It is worth noting according to Climate Action Tracker, to be in line with the Paris Agreement’s 1.5C ambition, Germany’s 2030 target should aim for emission reductions of “at least 69% below 1990 levels” – 4 percentage points more than the current goal.

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What has the coalition committed so far to climate and energy?

The new coalition has published a treaty outlining its policies over the next four years, titled “Daring more progress – alliance for freedom, justice and sustainability”.

The document is a prominent topic on climate and energy. Many of the commitments are in line with the proposals made by climate experts in advance of the election.

Carbon Brief is told by experts that there is evidence in Carbon Brief of the struggles of three parties seeking compromise on hotly contested topics.

The text emphasises the importance of making Germany’s emissions compatible with a pathway to the 1.5C global warming target. Experts disagree. predictedThe treaty does not contain enough policies to get there.

Climate targets

Even though Germany’s climate targets were already being strengthened as parties campaigned, the ambition of these targets remained a source of dispute during coalition discussions.

The Greens wanted to see Germany’s 2030 goal increased from a 55% emissions reduction to 70%. The SPD had also campaigned forThe short-term goal will be strengthened, but only to the 65% reduction that has been legislated.

Meanwhile, the FDP wanted to get rid of sectoral emissions targets, which were only recently introduced in Germany’s climate law for the years 2020-2030. 

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Sabine Gores, a senior researcher at the Öko-Institut, tells Carbon Brief she sees “a high advantage” in keeping these in place. “Sectoral targets ensure that emission reductions take place in all sectors, providing a fair share to overall ambition,” she says.

The parties came to a compromise, which neither increased overall or scrapped sectoral goals. However, they did agree to a “climate check” mechanism for ministries to ensure all new policies are compatible with national climate targets.

There is also language around “reforming” the federal climate action law and monitoring compliance with targets on the basis of a “cross-sectoral and multi-year overall assessment analogous to the Paris Climate Agreement”.

Carbon Brief is told by experts that it is still up for interpretation what these lines might mean. 

Frank Steffe from Agora Energiewende claims that the following is true COP26, where countries were “requested” to come forward with new climate pledges in 2022, there may be more pressure on Germany to come forward with a stronger target. (Even though EU has indicatedIt doesn’t intend to do so next Year.

In the negotiations for the EU’s “Fit for 55” programme, the coalition treaty states its support for “the proposals of the European Commission”, while adding that it wants “instruments in the individual sectors to be as technology-neutral as possible”. 

Such “technological neutrality” language is popular among German industry groups and the FDP, but in areas like the automotive sector is sometimes viewed as an excuseFor inaction.

Nevertheless, Dr Brigitte Knopf of MCC tells Carbon Brief that the new government’s show of support for Fit for 55 is “positive and very important”.

More broadly, while some sectors were still lagging in the treaty, Knopf says that in her view “this coalition brings the country back on track to meet the climate targets”.

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Electricity

Germany’s power supply is a key focus of the document and predictably its pledge to phase out coal power “ideally” by 2030 – eight years early than previously planned – received a lot of attention.

In 2020 the nation’s energy industry, primarily its electricity generation, emitted212.4m tons of CO2 equivalent (MtCO2e), 29% of total. Its emissions have been reduced by 53% in the past 90 days, according to the climate law. needsTo reach 77% by 2030

As the chart below shows, Germany – by far the largest coal user in the region – has become isolated in recent years as the only western European nation without a pledge to phase out the fossil fuel over the next decade.

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Coal generation in terawatt-hours in European countries in 2020

In 2020, coal generation in terawatt hours (TWh), in European countries (dark colors), with the change since 2010, indicated by paler colors. The blue colour is for countries that have committed to a coal-free zone by 2030 or earlier. The red color for those with later phaseout dates or no plans are for coal-free zones. The yellow bar indicates Germany. Source: Ember. Use Carbon Brief to create your chart Highcharts.

While the use of the word “ideally” reads like something of a compromise to placate German regions that are dependent on coal, Steffe says that in his view it is “pretty clear” that 2030 is the target date. Details will be provided in 2022, when the law on coal phaseout will be evaluated.

A key component in enabling the coal phaseout and 2045 net-zero target is perhaps the coalition’s most significant climate pledge – namely to increase Germany’s renewable electricity target for 2030 from 65% to 80% of the country’s supplies.

This includes increasing Germany’s offshore wind capacity from 7.8 gigawatts (GW) to 30GW, and solar capacity from 54GW to 200GW, in just a decade. This pledge is more ambitious than other similar targets. pushedNGOs and thinktanks that were involved in the election process.

The German government also committed to donating 2% of its land to onshore wind, which could be as high as 2%. 0.9% today. AnalysisThe Climate Neutrality Foundation suggests that this would be sufficient to increase onshore wind power from 55GW up to 80GW by 2030 and 130GW in 2050.

However, despite early reportsAlthough the deal was supposed to include a date for the end of gas power, it was not stated in the published document. disappointmentSome climate campaigners.

In fact, it notes that “natural gas will be indispensable for a transitional period” and says that new gas infrastructure should be hydrogen-ready. This means that Germany plans to build its future electricity mix around wind, solar and hydrogen with hydrogen back-up.

Another component of the strategy intended to promote the shift away from coal and fossil fuels generally is a proposal for a “national floor price” that would mean German carbon prices would be prevented from falling below €60 per tonne, even ifThe EUETS is unable to agree on a minimum emission trading system price.

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Transport

The coalition document contains some major commitments to decarbonising transportation. emitted146.7MtCO2e in 2020 or 20% of the total. Transport emissions have been reduced by only 11% since 1990. targetThe 2030 target is 48%

One of the most important pledges is the goal to have 15m pure electric cars in Germany by 2030. up from around 300,000 today, and aligning with the European Commission’s proposal to phase out petrol and diesel car sales by 2035.

In fact, the treaty states that the EU-wide 2035 target will have an “earlier effect” in Germany. This suggests that it could be pushed closer to the Greens’ favoured phaseout date of 2030.

However, in a nation with a major automotive industry, Jürgen Resch, head of Environmental Action Germany (DUH), said in a statement that “car companies’ handwriting cannot be overlooked” in the document.

For example, the text includes a loophole that allows vehicles that run on synthetic “e-fuels”, which have yet to be scaled up but are supported by industry and the FDP, to continue being registered “outside the existing system of fleet limits”. 

Dr Giulio Matioli, Technical University Dortmund, says another issue is how ambitious electric vehicle targets will be achieved.

“Some people are saying that this goal of 15m would imply that by the end of the decade nearly 100% of vehicle sales would be battery electric… if you look at countries that follow that exponential curve, like Norway, they have achieved that by creating a huge differential in price whereby they have taxed petrol and diesel vehicles a lot.”

Germany has subsidiesMattioli points to the fact that there is already a place for electric cars. intendsTo lower taxes on diesel cars rather thanThey can be raised.

The coalition document also includes a commitment for scaling up charging infrastructure. This is something that is considered to be holding backElectric vehicle expansion has been slow but steady from the German government. “I’m not entirely convinced that will happen either,” says Mattioli.

Rush-hour traffic in Berlin, Germany.
Berlin, Germany: Rush hour traffic Credit: Agencja Fotograficzna Caro / Alamy Stock Photo.

The coalition has eliminated speed limits for motorways. These were supported by SPD and Greens, but are opposed now by FDP which runs the transport ministry. 

According toThe German Environment AgencyA speed limit of 130km/h as proposed by the parties would reduce German emissions by 1.9MtCO2.

However, there were other important elements for environmentalists such as plans to prioritise rail investment over road spending.

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Buildings

The SPD, which will manage the ministry overseeing building, was responsible for constructing 400,000 housing units each year. a cornerstoneIts election campaign. The coalition agreement also includes details on how homes could be lowered in emissions.

Commercial and residential properties accounted for 119.2MtCO2e of emissions in 2020, 16% of Germany’s total. These emissions have fallen 43% from 1990 to the climate law. mustContinue falling to 68% by 2030

According to media leaks, the coalition was formed following negotiations. agreedTo ban new gas boilers by 2035, but this was not included in the final text. 

Instead, the treaty includes a promise that every new heating system will be powered by 65% renewable energy by 2025. This target was set by the European Environmental Bureau NGO as “highly disappointing”, as “hybrid solutions should be left only for niche renovation markets such as protected buildings​​”.

Another 2025 pledge is that all new buildings will have 40% of the energy consumption as a reference building. This is an improvement over the existing 75% goal.

Steffe tells Carbon Brief about these developments, considering the difficulty in negotiations. 

“I think the building chapter is sort of a hidden treasure…it’s much better than we expected.”

Specifically, he says that the 65% target marks “the end of fossil heating” in homes, providing a “very good remit” for heat pumps and other low-carbon technologies. 

The coalition did not increase the carbon price for heating fuels, citing social reasons as energy prices are still very high, although it would propose a new pricing system in 2026, with a “climate payment” to compensate some consumers for price increases.

Knopf says this is the “least ambitious element” of the treaty, as it will mean the price will only be at €55 in 2025, below the EUETS price now.

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Other areas

While some of the remaining policy areas may not be as well-developed and have fewer targets, there are still important signals for German climate policy.

The new document mentions the introduction of instruments in heavy industry. carbon contracts for difference – a means of supporting progress in hard-to-decarbonise areas such as steel production, that has been championedBy thinktanks.

Industries currently accounts17.8MtCO2e annually, or 24% of the total, is responsible for 178.1MtCO2e. The sector’s emissions have been cut by 37% since 1990 and must drop by 58% under Germany’s climate law.

The treaty also pledges to double plans for hydrogen electrolyser capacity – that is hydrogen produced using electricity rather than gas – to 10GW by 2030. 

This is also a clear priority in the document “green” hydrogenIn order to boost the industry, it is important to mention quotas for green hydrogen in public procurement.

Finally, the treaty includes language around modifying agricultural policy to help cut emissions, including presenting a concept for how direct payments under the EU’s Common Agricultural PolicyThe CAP could be replaced by a system that pays for climate and environmental services.

Agriculture accounts for 8% of Germany’s emissions at 60.4MtCO2e in 2020. These emissions have declined 24% since 1990, and the climate law requires that they fall by 36% by 2030.

It also refers to bringing livestock animal populations in line with larger targets of climate protection and water protection.

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