Dispatch from Germany | January '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
- Vying for votes – The election campaign has entered its final month. Voters see migration and the state of the economy as the most important issues facing Germany, and parties are trying to outdo one another with promises of tax relief, state support and investment programmes – in some cases with too few proposals on how to finance everything. CLEW is covering key energy and climate election issues, tracking relevant developments until polling day and laying out party promises on climate and energy.
- Conservatives up – The latest polls still point to a change in government, with Friedrich Merz’s conservatives (CDU/CSU) in a comfortable lead (~30%), although said lead is decreasing. Merz – who said he is "very very optimistic" that he will become the next chancellor – could choose to cooperate with either the Social Democrats (~16%) or the Greens (~13%), depending on how many parties cross the five-percent threshold to enter parliament. The far-right AfD looks set to significantly increase its voter share since the last election from ten percent in 2021 to around 20 percent this time.
- Last-minute legislative agreements? – A few weeks remain for the current parliament to decide on key energy and climate legislation, but chances are slim for any agreements. The government has lost its parliamentary majority with the break-up of the coalition, and opposition parties are unlikely to provide the government with a win. The law to help build new gas power plants via auctions for state support is already off the table and will have to be taken up by the next government. The CDU/CSU opposition alliance has said they would support changes to the carbon storage law to allow carbon capture and storage (CCS) in the country, as proposed by the outgoing government. However, since the FDP is out of the coalition, some lawmakers from the Greens and the SPD now demand changes, and it is unclear whether there is sufficient time to adopt the reform before the election.
- Industry support on hold – All of this also puts the brakes on the second round of auctions under Germany's "climate contracts" subsidy scheme to slash industry emissions, which are meant to include support for CCS projects. Other hurdles for the planned tender worth a maximum of 12 billion euros over 15 years are the outstanding green light from Brussels based on state aid rules, the support of Germany's next government, and the necessary budget, reports Tagesspiegel Background.
- More laws – Also still awaiting parliamentary approval are the Energy Industry Act (EnWG) reform – which states new solar plants would not receive state support for electricity produced during hours of negative prices – and changes to the emissions trading law. Germany, like many other EU states, missed the 30 June 2024 deadline to translate changes made to the EU Emissions Trading System (ETS) into national regulation. The transition from the national carbon pricing system for transport and heating fuels to the new ETS 2 is a key issue holding the reform back in Germany. Next week is set to bring clarity with the last full plenary week, though another plenary is scheduled for 11 February for a general debate ahead of the election, which, in theory, could be used to vote on legislation. German rules dictate that any laws not passed in the current parliament would have to be reintroduced in the succeeding one.
The latest from Germany – last month in recap
The latest from Germany – last month in recap
- Adaptation on the agenda – The government approved Germany’s climate adaptation strategy, which better prepares the country for dealing with extreme weather events such as heat waves, droughts, heavy rainfall or floods. The strategy, including targets and measures, was necessary to meet the requirements set out by the new climate adaptation law, which parliament had decided in summer 2024. More efforts on adaptation are sorely needed. A lack of skilled workers could delay the climate-proofing of European homes and cities.
- Sustainability reporting – Germany missed the 1 January deadline to translate changes under the EU Corporate Sustainability Reporting Directive (CSRD) into national law. The country instead called to postpone the CSRD’s expansion by two years and exempt small- and medium-sized enterprises (SMEs) from the reporting requirements laid out in the directive. Investors, business associations and environmental groups warned that the move is precarious at a time when economic and political uncertainty is already taking a toll on many companies. The EU is expected to propose changes to the CSRD on 26 February.
- Cutting emissions – Energy data for 2024 showed that consumption reached a record low due to warmer winter weather, a continued weakening of the country’s economy and ongoing efficiency gains. While coal use declined, fossil gas consumption increased slightly. Norway now provides around half of gas flows to Germany, raising concerns about energy security. At the same time, renewable consumption hit a new record of 55 percent of the electricity mix, as installed solar capacity breached the 100 gigawatt mark. Total greenhouse gas emissions declined three percent in 2024 compared to the previous year, said think tank Agora Energiewende.
Julian’s picks – Highlights from upcoming events and top reads
Julian’s picks – Highlights from upcoming events and top reads
- On 5 February, Germany’s Council of Experts on Climate Change will publish a report on emissions trends and developments, which will also include demands regarding future climate policy.
- NGOs Climate Alliance Germany and DNR will organise an event on the future of the European Green Deal at the Representation of the European Commission in Berlin (30 January), with commission officials, members of parliament and climate policy researchers.
- And for those who – at the end of this dispatch – still want more background information on the German election: my colleagues Sören, Caro, Benjamin and I will hold an online masterclass for journalists (29 January) on covering climate and energy in the election. After input on key issues from our beats, we will answer all your questions.
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