Dispatch from Germany | April '25
*** 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'. ***
Stories to watch in the weeks ahead
Stories to watch in the weeks ahead
- Climate protection a topic for the opposition: The likely coalition between the conservative CDU/CSU alliance and the Social Democratic Party (SPD) will dictate where German climate and energy policy goes in the coming four years. The parties presented their coalition agreement earlier this week, which shows they plan to continue with the outgoing government's climate and energy policies. The nomination of the ministers and their plans, and the exact remit of the re-arranged ministries will provide further pointers for the coalition's priorities. Moving the topic of climate out of the economy ministry and back into the environment ministry already signals that more ambitious action is not a priority, leaving the topic as an issue for the opposition. It will soon be decided who will lead each ministry, and the treaty still needs to be agreed to within the individual parties in the coming weeks.
- Returning to unfinished business: The prospective coalition government plans to adopt a legislative package to allow for the capture, use and storage of carbon (CCS/CCU) "immediately after the beginning of the legislative period". The legislation will allow for the storage of carbon offshore, as well as onshore in geologically suitable areas where there is also public acceptance. The coalition parties also plan to "swiftly revise" the so-called power plant strategy to incentivise the construction of 20 gigawatts (GW) of gas-fired power plant capacity by 2030 – 8 GW above previous plans. These controllable plants, which would step in when there is little wind or sunshine to guarantee security of supply, should be "technology open" (presumably meaning they don't necessarily have to convert to green hydrogen in future, as they will be allowed to use carbon capture and storage) and built primarily at existing sites. Both plans had been part of the previous government’s strategy, before they were stalled by the breakup of Olaf Scholz's coalition government in November.
- Renewable growth targets dialled back? The likely next government plans to review expected future electricity demand and adjust grid and renewable expansion targets accordingly. Reports had pointed out that future electricity consumption will be lower than estimated because of the slow rollout of e-mobility, heat pumps and hydrogen production. Investments in grid expansion and new renewable capacity could therefore be reduced significantly – if aligned to current estimates of electricity consumption – without jeopardising the goal of covering 80 percent of Germany's power demand with renewables. The coalition parties plan to commission a monitoring review by the summer, with expansion developments subject to regular monitoring. For example, intermediate targets for wind power expansion for 2032 will be re-evaluated based on the results.
- US rift and German companies: Over the coming weeks, attention will be focused on Washington following the chaos caused by president Donald Trump's tariffs. There is much uncertainty ahead, and German steel makers have called on the EU to quickly implement protection measures to strengthen the sector's competitiveness while making manufacturing climate-friendly. A similar, dim mood reigns over the car and manufacturing industries.
The latest from Germany – last month in recap
The latest from Germany – last month in recap
- Everything is subject to financing: The prospective coalition government has agreed on a special fund worth 500 billion euros for infrastructure and climate investments over the next 12 years, as well as theoretically unlimited defence borrowing, sidestepping budget constraints that toppled the previous government. That is a huge sum, and several actors have already laid claim to large parts of the pot, arguing it should go into the modernisation of rail networks, energy grids and water infrastructure. Still, experts have warned that the country does not have enough skilled workers to carry out the envisaged modernisations. Lengthy procurement, permitting and planning procedures, as well as supply bottlenecks, might also mean that positive effects are slow to materialise.
- Strengthening green industry: A key agreement inthe coalition treatyis to continue Germany's pioneering climate contracts for difference programme. The contracts compensate energy-intensive companies for the extra costs associated with transitioning to climate-friendly methods of production. The EU had approved funding for the programme under state support regulation, but the implementation of a second round of auctions was on insecure footing until now.
- Missing climate targets could get expensive: Germany is increasingly at risk of failing to meet EU-mandated climate targets for 2030 in the transport and buildings sectors, which could get expensive, the Federal Environment Agency (UBA) has warned. The country is on track to emit 226 million tonnes of CO2 equivalents over the target and, under the EU's effort sharing regulation, that could result in payments "worth billions of euros", said outgoing economy minister Robert Habeck.
- Climate change gravest security threat: Germany is already experiencing serious consequences from climate change. Heat waves – which are set to increase in frequency and intensity – are already endangering vulnerable populations, especially in urban areas, said the country's meteorological service. A government report from early February found that climate change is the gravest threat to German and European security as it destabilises states, undermines food security, increases conflicts over resources like water and poses a risk to human health, infrastructure and the economy.
Carolina’s picks – Highlights from upcoming events and top reads
Carolina’s picks – Highlights from upcoming events and top reads
- My colleague Milou Dirkx wrote a fantastic article on how Europe's far right rails against immigration and climate action publicly, but behind the scenes they let in migrant workers that are needed for the energy transition. It is a great read, highlighting how Europe now competes with other regions of the world to attract highly-qualified talent, how the demand for qualified workers puts anti-immigration stances under pressure and the dire conditions some vocationally-trained workers face.
- Football matches have been abruptly delayed by heavy rain, marathon runners have collapsed in intense heat and clubs have limited showers after training due to water shortages – sport also has to find ways to adapt to the consequences of climate change. To this end, the Climate adaptation in sports conference in Berlin on 15 May, hosted by the German Olympic Sports Association (DOSB), will cover topics like how to minimise climate-related health risks and technical adjustments needed at sports facilities. It is open to the press.
- Bloomberg published two great articles recently. The first dives deep into the essential role of electricity transformers and why this little-known piece of infrastructure threatens to become a major bottleneck for the energy transition. The second covered how there will soon be more high-speed train services between London and Europe. Great news, and a step in the right direction to make trains the more convenient choice over short-haul flights, though the article doesn’t sugarcoat the current realities of cross-border rail travel.
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