Dispatch from Germany | July 2024
***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
- Eastern state elections – The current leaders in the federal states of Thuringia, Saxony and Brandenburg worry about the possibility of another major victory for the far-right AfD, and also for nationalist left-wing forces in the eastern state elections in September. In the recent European Parliament elections, the AfD became the strongest party in all eastern states except for the city state of Berlin, while in many states the left-wing nationalist BSW managed to get ahead of the federal government parties, chancellor Scholz’s SPD, the Green Party and the FDP. Both populist parties call for a return to full energy trading with Russia. Surveys show that the most important topics for voters are migration, education, social justice and the economy, while climate plays a minor role.
- New gas power plants – The German government announced further details of its long-awaited power plant strategy. For periods with little wind or sun, the country will need backup capacity to secure electricity supply. To this end, the government decided to help fund the construction of 10 gigawatts (GW) of new gas-fired power plants, half of which must later be converted to run on hydrogen to help decarbonise power supply. The state will hold first tenders in late 2024 – or more likely early 2025. The government reportedly plans a levy on the electricity price to help fund support for some of the plants. In addition, Germany plans to introduce a capacity market by 2028 to ensure supply security, and is currently working on a paper laying out its options.
- Energy data coming – The energy market research group AGEB is set to publish energy consumption data for the first half of 2024 soon. We already have electricity data (see below), but AGEB's comprehensive set includes energy use – from oil to coal to renewables – across sectors.
The latest from Germany – last month in recap
The latest from Germany – last month in recap
- 2025 budget agreed – The government finally adopted the draft federal budget for 2025 after weeks of difficult negotiations and following a deal reached by the three coalition partners in early July. Researchers from non-partisan think tank Dezernat Zukunft said that to draft the budget, the government relied on "budget techniques and optimism," and included significant cuts in some areas, for example to social welfare payments. The draft left open questions on the future of the Climate and Transformation Fund, Germany's main public budget vehicle for climate policy financing, which faces a hole worth billions of euros following a constitutional court ruling. The coalition government was thus forced to make tough decisions about their spending priorities. According to the researchers, this means that the next government will have to put climate policy financing on a sound footing again.
- Hydrogen imports – In its last major cabinet meeting before the summer break, the government agreed its long-awaited import strategy for green hydrogen, which is made from renewable electricity. The fuel will be needed to fire the aforementioned power plants in the future, but likely even more to perform certain industrial processes that cannot easily be electrified. The government said at least 50-70 percent of hydrogen must be imported in the future, because Germany's renewable energy resources are limited.
- Renewables record – Renewable electricity production reached records across Europe and in Germany in the first half of 2024. Renewables covered around 57 percent of Germany's gross electricity consumption from January to the end of June, figures by the Federal Environment Agency (UBA) showed. Grid agency BNetzA also announced the winners of the most recent auction for the rights to build offshore wind farms in the North Sea, where investors offered to pay three billion euros for a total capacity of 2.5 GW. Still, industry expects the country to miss its expansion targets for 2030.
- Fake climate projects – The government has to deal with allegations of fraudulent emission reduction projects in China used by fossil fuel giants like Shell and TotalEnergies to fulfil climate protection requirements in Germany. Media reports said that many projects are fake, putting pressure on the environment agency UBA, which approved them in the first place.
- Real "climate neutral" claims – A top court ruled that companies will not be able to label their products ‘climate neutral’ in Germany without adding a detailed explanation to back up the claim. That is in line with plans by the EU to regulate such claims. (Check out CLEW's package of coverage on company climate claims)
- Railway woes – The UEFA Euro 2024 football tournament put a spotlight on glaring deficiencies in Germany's railway system, with major delays prompting users to complain on social media. The country is now considering major modernisation projects in the coming years, predictably leading to yet more delays.
Caro's and Julian's picks – Highlights from upcoming events and top reads
Caro's and Julian's picks – Highlights from upcoming events and top reads
- Following the EU elections in June and the re-election of European Commission president Ursula von der Leyen, all eyes are on how the German politician will assemble her team of commissioners in August and September and develop the work programme for the coming years. First indicators can be found in von der Leyen's Political Guidelines. Vincent Hurkens from think tank E3G wrote a first assessment.
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The Olympic Games kick off today in Paris, under the motto of being the most sustainable yet. While parts of this claim have been put to question, one of the ways Paris tried to mitigate emissions is through construction. Many of the city's Olympic venues have broken out of the sector's dirty habits and pushed the sustainability envelope. The Guardian article Plastic-bottle seats and wooden pools: can Paris deliver the leanest, greenest Olympics yet? is a great dive into what worked, and what didn't. My favourite parts delved into the Aquatics Centre (more fascinating reading on its architectural wonders here) and seashell pavements designed to cool the street by the Olympic village. There are other Olympics-related great reads on Paris' transformation here (cities can take many lessons from it) and on how athletes gear up to deal with increasing heat here.
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