Reactions from energy and climate community to Germany's 2025 coalition treaty

Please note: You can read our analysis of the agreement here. We have summarised the coalition treaty in this factsheet.

Industry

Utility association BDEW – Head Kerstin Andreae:

“It is a good signal that the coalition is not making a U-turn on the energy transition, but is instead promoting energy policy continuity and an innovation-driven course for Germany. We take a critical view of some points and will scrutinise their implementation. This concerns, for example, state participation in the energy sector or the use of reserve power plants to curb prices, particularly in light of the risks under European law. Reducing energy prices is an important contribution to the business location. However, when allocating funds, it should be borne in mind that investments in particular must be promoted […]
The rapid agreement reached by the coalition partners gives hope that the future federal government will be highly goal-orientated and will come up with pragmatic, practical solutions. The motto should be: less is more […]
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. Renewable energies, grids, storage facilities, controllable gas-fired power plants and electrolysers must be consistently expanded further and with a view to system efficiency in order to create a resilient electricity system.”

Renewable energy association BEE – President Simone Peter:

“The SPD, CDU and CSU have concluded the coalition talks and presented a comprehensive coalition agreement with a clear focus on innovation and investment in a strong business location embedded in the European single market. We welcome the commitment to national and European climate targets as well as the emphasis on renewable energies as key technologies […]
The planned monitoring of expected electricity demand and the status of security of supply, grid expansion, the expansion of renewable energies, digitalisation and the hydrogen ramp-up must be based on realistic assumptions that actually guarantee affordability, cost efficiency and security of supply […]
We consider the reduction in electricity prices and other measures that relieve the burden on the economy and consumers, and promote the electrification of economic sectors as well as the ramp-up of hydrogen at the same time to be just as important as the use of market instruments such as carbon pricing, which is intended to avoid social imbalances. The clear commitment to a resilient economy in geopolitically challenging times is also an important signal for all sectors of the renewable energy industry."

Federation of German Industries (BDI) – managing director Tanja Gönner

“The coalition agreement contains approaches for urgently needed, resolute structural reforms; rapid implementation is now crucial.
The short-term, concrete relief for industry, commerce and private households from excessive energy costs is important and right. What is missing so far is an overall concept consisting of necessary structural and bold measures that will ensure internationally competitive energy prices in the long term. The government must show in its implementation that it is serious about greater efficiency and thus lower costs in the energy transition. The fact that negative emissions and non-European CO2 reduction efforts are also to be counted towards the climate targets is a strong signal in favour of a more flexible and internationally compatible EU climate policy.”

German Engineering Federation (VDMA Power Systems) – managing director Dennis Rendschmidt

"It is positive that the coalition partners are committed to climate protection and are striving for a stronger market orientation.
The coalition agreement addresses the most important issues for energy plant construction: the expansion and integration of renewable energies, the expansion of secure capacity including CHP and biogas plants, cyber security for critical infrastructure, carbon management, grid technologies and energy storage.
These topics must be implemented quickly. Monitoring must be presented swiftly and, due to the geopolitical situation, take into account industrial policy issues such as competitive supply chains and resilience. The evaluation of the 2032 area targets for wind energy must not cause the expansion to be cancelled. There also needs to be rapid clarity regarding the mechanism for power plants. The energy plant construction industry is ready to provide the necessary technologies for the transformation of the energy sector."

Think Tanks

Policy think tank Agora Industry – Director Julia Metz:

“The incoming government’s support for an EU 90 percent emission reduction target for 2040 sends a strong signal at a time of geopolitical turmoil that Germany is committed to climate neutrality. However, the proposal to allow governments to “offset” emissions by buying international credits - rather than reducing them at home - risks undermining the target’s credibility and would mark a major shift in the EU’s current approach to climate action. 

“When it comes to driving the transition forward, Europe holds a unique advantage: deep cooperation and an integrated energy market. To fully capitalise on this, it is essential to protect and strengthen the bloc’s climate and energy governance framework – including core elements such as emissions trading, the Carbon Border Adjustment Mechanism (CBAM), and the buildings directive.
Staying the course will provide investment certainty for European households and companies. It will allow the EU to enhance energy security and strategic autonomy, while supporting industrial competitiveness, and ensuring affordable energy for all. Germany should lead in upholding this governance framework – thus helping to secure the EU’s successful path to climate neutrality. A good example of this is the incoming government’s stated support for the creation of green lead markets, which can help spur the demand that industry needs to invest in the production of climate-neutral goods."

Climate think tank Potsdam Institute for Climate Impact Research (PIK) – Director Ottmar Edenhofer:

“It is good to see that the new coalition is committed to German and European climate targets. Particularly important is their adoption of the second European Union emissions trading scheme (EU ETS2) for the buildings and transport sectors as a central policy instrument from 2027 onwards. Currently, there are voices in Warsaw, Prague and Bratislava, for example, calling for a postponement. It is important that the new German government support the EU Green Deal and works to ensure that ETS2 comes on time; it can make concessions to partner countries when it comes to the design.

“The coalition agreement also explicitly emphasises the need for carbon leakage protection to maintain our industrial value added. The instrument for this is the flanking of EU-wide carbon pricing with climate tariffs, the so-called Carbon Border Adjustment Mechanism (CBAM), which will be financially implemented step by step from 2026. It is not only necessary for ensuring European industry is not disadvantaged by international competition, but also to strengthen international climate cooperation – this applies despite the US’s climate policy breakdown. The CBAM, as has already been demonstrated in the run-up to its implementation, also incentivises countries outside the EU to implement carbon pricing.

“An important element of the EU Green Deal is the European interim climate target of reducing CO2 emissions by 90 percent by 2040 compared to 1990. It’s good that this is also being addressed in the coalition agreement. It is rightly understood as a net target – primarily through CO2 reduction, and to a limited extent through permanent and sustainable atmospheric carbon removal. Contrary to the coalition agreement, however, the EU interim target must be met entirely domestically. Climate protection efforts in non-European partner countries – namely the financing of carbon removal projects in the Global South on the basis of Article 6 of the Paris Agreement – are useful, but they need to be additional.”

Policy think tank E3G – Head Germany Marc Weissgerber:

“The support for an emissions reduction target of 90% at EU level - albeit subject to conditions - and the commitment to the 2045 climate neutrality target in Germany send an important signal to the international climate process. [...] Given the geopolitical tensions and geo-economic uncertainty, the new government must now demonstrate its ability to act quickly. The coalition agreement clarifies the German government's support for multilateralism and its ambition to develop a strategic response to these challenges.”

Climate policy Agora Think Tanks - Director Markus Steigenberger:

“The coalition agreement that has now been published contains decisive measures for the energy transition - from the expansion of renewable energies and grids to the heating transition and industrial transformation - but it is designed for short-term successes and savings, and lacks a long-term strategy. For example, linking the expansion of renewables to grid capacities does not mean any cost savings, but merely postpones the necessary investments into the future. The future government therefore risks the economy and future generations footing the bill for missed climate protection and a slowed-down industrial transformation.

“However, a number of agreements in the coalition agreement point in the opposite direction. We are concerned about the agreed subsidies for considerable fossil fuel power plant capacities. The planned one-sided tendering of 20 GW of gas-fired power plant capacities is problematic. Instead, the most favourable technology mix for security of supply should be determined in a competitive environment. With the option of using CCS, this threatens to become a permanent subsidy for the use of imported fossil natural gas. It is therefore important to combine it with clear requirements for switching to hydrogen, also in order to strengthen the hydrogen infrastructure and energy security.

“The announcement to abolish the current ‘Heating Act’ threatens to create uncertainty in the heating market. A new legal framework must therefore be introduced very quickly so as not to delay climate protection and energy independence [...] For industry, the announced electricity price reductions, the agreed continuation of climate protection agreements and the development of green lead markets are key instruments for incentivising investments towards climate neutrality.”

NGOS

Environmental and development NGO Germanwatch:

“It is an important signal that the future coalition partners have realised that security is not only guaranteed militarily and with regard to Ukraine, but also through international cooperation in the fight against hunger, pandemics and the climate crisis […] Germany's announced willingness to make a fair contribution to international climate financing is a step in the right direction,” said policy director Christoph Bals. The NGO says that even though the treaty supports climate protection targets in Germany and the EU, “there is a threat of weakening through the back door, namely through the possibility of fulfilling up to 3 per cent of the EU 2040 climate target through international certificates.”

Environmental Action Germany (DUH) – managing director Barbara Metz

“Although the climate and biodiversity crisis is progressing massively, the CDU/CSU and SPD are planning a climate policy relapse even further back than the level of the Merkel era. DUH sharply criticises this and announces that it will enforce necessary climate protection measures, particularly in the areas of buildings and transport, if necessary also in court.
In terms of the heating transition, the worst-case scenario has materialised: The Heating Act is to be abolished. This is fatal for climate protection and affordable heating. Without a clear focus on energy efficiency and savings, the new coalition continues to drive climate protection in the building sector up the wall (…) The coalition is openly committed to implementing the EU Buildings Directive as unambitiously as possible. Germany is increasingly bringing up the rear in Europe when it comes to climate protection in the building sector.”

Initiative Climate Neutral Germany (IKND) – Head Carolin Friedemann:

“From a climate protection perspective, there is light and shade, although we believe the light outweighs the shade. We see great potential in the ambition to simplify numerous procedures and regulations, especially to accelerate the energy transition and the decarbonisation of the economy. In our view, the focus on using economic solutions for climate protection can be a great asset for public acceptance of the ongoing transformation of our economy and society towards climate neutrality. The new coalition's clear commitment to use the funds from the Climate and Transformation Fund specifically for measures to achieve climate neutrality is a decisive signal for climate protection. In view of the distribution of responsibilities among various ministries, it is now of the utmost importance to utilise this potential effectively, pragmatically and across all ministries.
The new government would be well advised not to make any changes to the Building Energy Act with a crowbar. Our survey figures show that planning security is crucial for both homeowners and tradespeople so that necessary investments are realised and no longer postponed."

Friends of the Earth Germany (BUND) – Chairman Olaf Bandt

“The government plan does not offer sufficient environmentally and socially just solutions and even jeopardises what has been achieved […]
The coalition threatens to become a risk for climate and nature conservation. The coalition agreement cancels key achievements and measures in these areas and does not name any effective alternatives. We now need a government that takes its climate and nature conservation commitments seriously and utilises its new financial leeway wisely.
The CDU/CSU and the SPD have committed to the climate targets and the Paris Climate Agreement. However, the climate and energy policy agreements are a setback in key areas. In particular, weakening the climate targets by shifting efforts abroad is a breach of taboo. This also applies to the planned widespread use of CO2 capture and storage in industry and even in the electricity sector. This would ultimately mean a fossil fuel standstill, even though the alternatives are available at low cost.”

Transport and environmental association VCD:

“The coalition agreement presented today by the CDU/CSU and SPD represents a step backwards for a sustainable transport policy. [...] Climate-damaging subsidies will remain or even be increased, a speed limit will not be introduced [...] The aviation tax, which has only just been raised, will be reduced and the commuter allowance increased. Germany is to remain a car country. [...] Not a good day for the transport revolution and environmental protection.
On the plus side, the Deutschlandticket remains in place and will not become more expensive until 2029. The VCD also welcomes the commitment to the further expansion of railway financing with a fund and the safeguarding of local public transport. However, there is no plan for the expansion of public transport. The association is sceptical about electromobility - although this is also to be driven forward, this is contradicted by the intention to weaken the EU requirements for reducing CO2 emissions from new cars.”