Dispatch from Germany

***Our weekly Dispatches provide an overview of the most relevant recent and upcoming developments for the shift to climate neutrality in selected European countries, from policy and diplomacy to society and industry.

For a bird's-eye view of the country's climate-friendly transition, read the respective 'Guide to'.***

EU election focus

• Government parties set to lose votes: In Germany, the fractious “traffic light coalition” of chancellor Olaf Scholz’s Social Democrats (SPD), the Greens, and the pro-business Free Democrats (FDP) faces its first nationwide vote in the EU elections since taking office. Polls suggest losses for the governing parties (SPD and Greens are each expected to take around 15 percent of the vote, and the FDP around 4 percent) and a comfortable lead of around 30 percent for Germany’s largest opposition party, the conservative CDU/CSU alliance. The right-wing populist Alternative for Germany (AfD), which is strongly opposed to ambitious climate action, is also expected to make strong gains, which could take it to second place – it currently polls around 17 percent.
• Fears of decarbonisation backlash: The surge of populist parties opposed to ambitious climate policies has left its mark on Germany’s national debate as it did in many other European countries. Concerned about the backlash against the costs of decarbonisation and transformation, as exemplified by farmers’ protest in early 2024, both the governing coalition parties and the opposition are focusing on managing social conflicts, or reversing regulations seen as obstacles to industrial recovery. In the wake of major political and social upheavals - the pandemic, the war in Ukraine and a wave of inflation -, there is a considerable change in mood from the national election in 2021, when Scholz campaigned successfully to inherit his predecessor Angela Merkel's unofficial title as "climate chancellor." In contrast, climate action is barely mentioned in the ongoing EU election campaigns in Germany. Other topics, such as security, economic competitiveness or migration, dominate the agenda. Even the Greens, scarred by last year’s fierce controversy over heating sector decarbonisation, are striking a different tone with posters that say “Defending values. Protecting peace.”
• Populists might have peaked: The AfD’s showing in the EU election in Germany will be particularly closely watched by the media – similarly to the surge of right-wing populist parties in other countries. But polls indicate that the party’s popularity may already be in decline, following reports about some members mulling the idea of mass deportations, and others having ties to the Russian and Chinese governments. In addition, the new left-wing populist party Sahra Wagenknecht Alliance (BSW), which like the AfD holds nationalist views on trade and migration and is critical of Germany’s decarbonisation plans and shift away from Russian energy supplies, could further sap votes from the AfD. Launched in January 2024, the party could receive more than 5 percent in the EU elections.
• Conservative conundrum: The conservative CDU/CSU alliance can hope to reap the fruits of the “traffic light” coalition’s constant infighting. But the parties also face a conundrum ahead of the election: On the one hand, they oppose many national and European climate policies by arguing they are an obstacle to industrial recovery. On the other hand, they can’t undermine their own top candidate, European Commission president Ursula von der Leyen, who championed the European Green Deal as a key instrument to reconcile economic recovery, energy security and climate neutrality by 2050. Key conservative politicians have continued their campaign against EU climate policies - for example, they recently doubled down on their criticism of the planned end of combustion engine car sales in the EU by 2035. This is a sensitive topic in Germany because of its huge automotive industry, which has been slow to cut its dependency on fossil fuel engines, and is increasingly lagging behind Chinese competitors in e-mobility. 

Stories to watch in the weeks ahead

• Solar records: The government push to accelerate the rollout of renewables is showing first signs of success, and the arrival of summer sunshine is set to bring new solar power generation records. In the first quarter, renewables already covered 56 percent of total electricity consumption, according to preliminary calculations. This share is set to grow apace, not least after parliament agreed on new measures to speed up the deployment of solar PVs. The country has recently crossed the threshold of 400,000 small-scale plug-in solar systems dubbed “balcony power plants,” and almost a third of homeowners tell pollsters they plan to install PVs by 2025. The rollout of onshore wind power is also picking up speed, with construction permits reaching a new quarterly record in early 2024.
• The future of coal: On 2 May, Germany already exceeded sustainable consumption limits for the year, according the country’s Overshoot Day calculated by US NGO Global Footprint Network. The use of coal continues to weigh heavily on Germany’s balance, with a report saying lignite mining grossly underestimates methane emissions. The Group of Seven (G7) agreed to end coal power generation by 2035, but Germany’s government said there is no reason to change the country’s official phaseout date of 2038. Green economy minister Robert Habeck argued the EU Emissions Trading System (ETS) will force coal out of the market by that time anyway. But an eastern German coal state premier, Saxony’s Michael Kretschmer, said the G7 decision “destroys” trust in mining regions and lacks any basis in German law. So, the future use of the heavily polluting fossil fuel is set to remain on the political agenda, especially against the backdrop of three state elections in eastern Germany after the summer, where the coal exit is a controversial issue. Elsewhere, the phaseout continues quietly: At the end of March, Germany shut down seven more coal power plant units in accordance with its official switch-off schedule. The economy ministry’s long-delayed official evaluation of the phaseout’s progress and prospects is still outstanding.
• Debt limit pressure: Expect a continuation of the debate about whether Germany should reform its strict limit on state borrowing, the so-called “debt brake.” Surveys show that most Germans favour a reform in order to allow the government to borrow money today to invest in the future. Five leading research institutes also joined the chorus by recommending amendments. An alliance of civil society groups also rang the alarm over the debt brake, which requires funding cuts in areas such as climate action, industry transformation and social support as a consequence of a ruling by Germany's highest court in November 2023, which declared an integral part of the government's funding plans unlawful. International pressure is also building up – most recently, the  Organisation for Economic Cooperation and Development (OECD) called for a reform to increase the scope for investments.
• Franco-German engine: The president of France is expected in Germany for a three-day state visit from 26 to 28 May. While the response to Russia’s war in Ukraine is set to take centre stage during the talks, questions surrounding the EU’s path to climate neutrality are also likely to feature high on the agenda, as the two core EU members must come clean on the bloc’s strategy to make it fit for the tasks ahead.

The latest from Germany – last month in recap:

• Controversial climate law reform: Germany’s parliament approved a controversial reform of the country’s key legislation for reaching climate targets, to the outrage of many NGOs, which say the changes will delay emission cuts and are therefore “unconstitutional.” The changes to the climate action law weaken the responsibility of individual ministries for emission cuts in their sectors by focusing exclusively on the country’s overall ambitions to cut greenhouse gas emissions. Climate NGOs said the government is shirking its climate responsibilities by postponing climate protection to the distant future. Critics say the reform is mainly designed to avoid unpopular measures in the transport sector, which is lagging far behind in the race to become climate friendly. Germany’s Council of Experts on Climate Change said the government’s efforts to rein in transport emissions are “far from sufficient.”
• Climate finance commitment: At the German government’s Petersberg Climate Dialogue, a ministerial conference, foreign minister Annalena Baerbock said the country will stick to its international climate finance commitment and will aim to provide 6 billion euros annually in funds to developing countries for climate mitigation and adaptation by 2025, despite the budget crisis. She also said: “We strongly support the proposal for an EU climate target to reduce emissions by at least 90 percent by 2040," but clarified later that this was only her ministry’s position, while the government had yet to agree an official German position. 
• Snub from China: During a visit by German chancellor Olaf Scholz to China, the far eastern country rejected what it called the “theory” of unfair solar PV production subsidies. Prime minister Li Qiang rejected criticism about his country’s trade practices, which European companies have argued distort markets for solar panels and other products by subsidising enormous overcapacities. Growing volumes of cheap green technologies coming out of China have led to increasing worries that solar panels, electric cars, batteries and other products sold below their production price are undermining Europe’s industry transformation plans. German solar panel manufacturer Solarwatt said it would halt production of PV modules in its factory in Dresden, closely following on the heels of Swiss solar module maker Meyer Burger, which announced earlier this year that it would wind up panel production in Germany. According to the solar industry, the government may have missed “the last chance for a renaissance of Germany’s solar industry” by scrapping a Made-in-Europe bonus from its package to ease the rollout of the technology.

Sören’s picks – Highlights from upcoming events and top reads:

• For the first time, I attended this year’s International Journalism Festival in Perugia, Italy. It was an excellent event, which boasted a wide-ranging programme, ranging from climate journalism to the use of artificial intelligence in newsrooms, and many other fascinating topics. Those who didn’t have the chance to attend can watch professional recordings of all the sessions, so it’s still well worth checking out the programme.
• As a long-time resident of Berlin, I have clearly felt the impact of climate change on the local weather: More intense heat waves in the summer, and increasingly snow-free winters. But this paper by Stefan Rahmstorf from the Potsdam Institute for Climate Impact Research was a timely reminder that a drastic drop in temperatures in Northern Europe is also a real threat as a result of the changing climate. It is written in non-expert language, comes with good illustrations, and has drastically improved my understanding of the Atlantic Meridional Overturning Circulation (AMOC) – admittedly, from a low basis. Spoiler alert: The Gulf Stream is only a small part of the puzzle. 
• With a view to the EU elections, I warmly recommend the (still growing) dossier on the rise of far-right populism, and what it means for climate action, compiled by my colleagues Milou and Julian. It already has several interviews with experts and a report from Poland, and will be complemented soon with more case studies from various EU countries, so stay tuned!