Aspiring German government opts for energy transition continuity
Please note: Find a summary of the coalition treaty in this factsheet, and a collection of reactions here.
The parties aspiring to form Germany’s next government have promised to continue the country’s drive to cut emissions without any major changes to existing energy transition policies. In their highly anticipated coalition treaty, agreed after weeks of negotiations, the conservative CDU/CSU alliance of likely future chancellor Friedrich Merz and the Social Democratic Party (SPD) said they will carry on rolling out renewables and stick to the country’s target to be climate neutral by 2045.
The coalition partners also said they would continue support schemes to make industry, building, transport and other sectors more climate-friendly. However, following two years of economic stagnation and recent geopolitical upheavals triggered by the US, the parties decided to focus on boosting the growth of Europe’s largest economy – for example, via energy price cuts – by showing slightly less climate ambition than the outgoing government of the SPD and the Greens.
While the business community welcomed the emphasis on competitiveness, cost reductions and the continuation of climate policy, climate activists said they were relieved that the future government remains committed to climate targets.
“It is a good sign that the coalition is not making a U-turn on the energy transition, but is instead promoting the continuation of energy policy and an innovation-driven course for Germany," said the head of utility association BDEW, Kerstin Andreae. "The coalition agreement is a basis for the efficient continuation of the energy transition – cost and system efficiency must be the guiding principles in future."
The coalition treaty paves the way to making conservative leader Merz become the country’s new chancellor in the coming weeks. “A tough piece of work lies behind us – and a strong plan for Germany ahead of us,” said Merz at a press conference in Berlin. He argued that the prospective coalition government’s success would shape “our country’s future and the future of Europe” at a critical point.
The new government looks set to be sworn in around early May, after both the SPD’s members and the CDU’s party delegates have greenlit the coalition treaty.
No major surprises
The coalition agreement did not contain major turnarounds or surprises in climate and energy policy, but some controversial crunch points were completely left out of the document. For example, reactivating Germany’s nuclear power plants, an idea championed by the CDU/CSU, was not mentioned in the treaty. In a similar vein, reversing the EU 2035 phase-out of combustion engine vehicles and introducing a speed limit on the country’s motorways didn’t receive a mention.
Compared to the previous government, however, the deal showed a slightly lower level of ambition in climate policy, as a more challenging international environment, economic concerns, migration and the rise of the far-right let climate action fall as a priority. While the coalition treaty of Scholz’s outgoing government mentioned climate nearly 200 times, the word showed up 80 times in the new treaty that will lay the groundwork for Merz’s coalition government.
The new set-up of ministerial responsibilities also signalled that climate action has become less of a priority, as the aspiring government plans to shift the topic from the economy ministry back to the environment ministry.
“We must quickly increase the competitiveness of our economy,” Merz said. “We’ve all understood what has happened there,” he said with a view to Trump’s tariff announcement. He added that under his leadership the US could expect a strong Germany at the heart of a united Europe. “We must find a joint European answer to the US’ tariff policy – and to the tariff policy of China.” Besides reducing taxes and introducing investment incentives through tax write-offs, lower energy prices will be a key tool for bolstering German industry, Merz argued. “We will reduce the electricity tax to the European minimum, reduce grid fees and introduce an industry power price.”
"Light outweighs the shade"
Many environmental think tanks welcomed the coalition treaty. Energy policy think tank Agora Energiewende praised the prospective government’s support for a target of reducing emissions by 90 percent in the EU by 2040 as “a strong signal at a time of geopolitical turmoil that Germany is committed to climate neutrality.” However, proposals contained in the treaty – such as offsetting emissions abroad by buying international credits instead of reducing them at home – risk undermining the target’s credibility and question the EU’s climate policy, Agora said.
The Initiative Climate Neutral Germany also said that the treaty was good news overall, despite some drawbacks. “From a climate protection perspective, there is light and shade, although we believe the light outweighs the shade,” they said.
