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Designated German climate and economy minister Robeck Habeck has said that faster construction of new wind turbines and solar panels will be a “core task” for his ministry in the coming years. At a press conference held by representatives of the incoming government, the Green politician said this will require intensive debates about the structural change it means for the country. Habeck added that constructing large amounts of new renewable power installations and other energy transition infrastructure, such as hydrogen transport and production, will probably be an “imposition” for many people. “Everyone who has signed the coalition treaty knows this,” Habeck said, adding that the speed of construction of new installations will need to quadruple to meet the coalition’s ambitious target of an 80 percent share of renewables in the electricity sector by 2030. Natural gas “conceivably” will drop out of the country’s power mix in the 2030s, Habeck added, increasing the pressure to fill the gap with renewables: “I’m afraid that this won’t be easy and we will have quite a lot of debates.” He added that a short-term measure in the first months of its tenure could be to give renewables priority in adequate areas where construction is currently blocked due to other “legal interests.” He also said that his first year in office is likely to be filled with creating the legal foundation for the economy’s “eco-social” transformation and effects will only really take hold afterwards.

The Green politician, who will also be made vice chancellor, said his novel ministry combining climate and economic policy will need to show that economic prosperity and effective climate action can be reconciled, stressing that “I hope the business world understands that the new government and my ministry are partners for them.” The economic potential of clean technologies for Germany and Europe is immense, Habeck added, arguing that “companies are ready for it” and “eager to take the next step.” His ministry will now offer political assistance in this endeavour.

Designated finance minister Christian Lindner from the Free Democrats (FDP) said he does not expect the finance ministry (BMF) to clash with Habeck’s new ministry over budgeting questions for the transformation. “I see no conflict,” Lindner said, arguing that the BMF should be an “enabler-ministry” for climate action. The coronavirus pandemic halted important climate projects that now need to be resumed in full, and he promised that as treasurer he will ensure the projects outlined in the coalition treaty are adequately funded. 

The new government which will be headed by Social Democrat (SPD) chancellor Olaf Scholz is set to be sworn in on Wednesday 8 December. The so-called ‘traffic light coalition’ government, named after the party’s colours, will replace outgoing chancellor Angela Merkel’s “grand coalition” between her conservative CDU/CSU alliance and the SPD, in which Scholz has been finance minister since 2017. In its coalition treaty, the new government has committed itself to bringing Germany on an emissions reduction path compatible with the Paris Agreement’s target of limiting global warming to 1.5 degrees Celsius.

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The European energy price hike in the second half of 2021 is due in large part to the drop in prices caused by collapsing demand in the 2020 coronavirus pandemic, Germany’s public development bank KfW has said in an analysis. “Part of the increase is due to bottlenecks in energy supply, but the lion’s share of the energy price inflation is due to below-average crude oil and energy prices in the previous year,” KfW’s Jens Herold says. The so-called statistical basis effect has an impact on relative price increases and may distort the perception of actual price increases, as a peak in the price curve is exacerbated by an earlier bottom as the point of reference, the bank explains. Several aspects of the pandemic had an impact on prices, Herold writes. These include the collapse of crude oil prices in 2020 and the subsequent economic recovery; temporary tax cuts; the introduction of carbon pricing in Germany at the beginning of the year, and the closure of many shops due to pandemic containment measures which meant that customers could not benefit from sales offers. According to the bank, the influence of basis effects will subside eventually, as it did after similar instances in the past. 

Energy prices have increased at the fastest rate in decades across Europe in the second half of 2021 due to a variety of factors. These include the aforementioned recovery effects in the wake of the pandemic’s first waves, low gas storage levels due to a long previous winter and below-average output by renewable power installations. The incoming new German government has signaled it will assist customers struggling with high energy costs in the short run and stick to the agreed slow path to increase the national carbon price for heating and transport.  

German leader Angela Merkel has been nicknamed the "Climate Chancellor" for her long-standing international action on emission cuts. However, at the end of her 16-year German leadership in winter 2021 many see her climate legacy as mediocre. International observers commend her steadfast leadership in negotiations with other heads of state and government, while critics speak of a “lost decade for climate action” at home. This factsheet provides a timeline of Merkel's climate involvement. [Updates to end of Merkel's 4th term]

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The new German coalition government’s goal of a 2030 coal exit, eight years earlier than initially planned, will require a massive transformation of the grid if it is to be successful, an analysis by transmission system operator Amprion has found. In a brief analysis, the company advised that the exit date is technically possible, but will require more updates to the current grid infrastructure than what is currently planned as well as reforms of the market and regulatory design. The analysis also showed that part of the to-be-shut-down coal-fired power plant capacities will have to be temporarily transferred to the grid reserve. Amprion CEO Hans-Jürgen Brick said "we need a stable transformation phase on the way to climate neutrality. With a stress test, we must ensure that we not only have sufficient generation available, but also that system stability is maintained.” The company has put together a 10-point recommendation plan for the new federal government. These include a maximum of three years for approval procedures to take place, and for instantaneous reserve capacities to be procured earlier than currently planned.

Germany's new government coalition has agreed to "ideally" move the coal exit forward to 2030, under the condition that power system stability is guaranteed and with the help of new, hydrogen-ready gas-fired power plants for back-up. Apart from gas plants and a "massive" expansion of renewable energy capacities, the government wants to shorten planning procedures for new grid connections and evaluate changes to the power market design, such as capacity mechanisms and other flexibility options to ensure supply security during the nuclear and the coal phase-out. The new government also wants to turn the current monitoring of supply security into a "real stress test".

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Following a "mixed technology approach" in the decarbonisation of Europe's transport sector could deliver significant CO2 emissions reduction while simultaneously preserving tens of thousands of jobs in the sector a study by Clepa, the association of European automotive suppliers, has found. Half a million jobs in the European car industry could be lost due to the transition to electric vehicles, the lobby group said, predicting that the number of employees will grow until 2025 and then fall dramatically until 2035, when only new electric vehicles will be registered. Of the current 645,000 jobs in the industry, more than 500,000 could be lost, Clepa estimates. New jobs totalling about 225,000 will be created, but these will not necessarily be in the same companies or locations. The authors predict that Eastern Europe will be most affected, but also that over 80,000 jobs in Germany will be lost, and that Italy will also be affected significantly. France on the other hand may benefit from a large number of new battery factories due to its cheap energy prices. The association is calling for the EU’s Green Deal to be adjusted so that emissions from car production are included in a vehicle’s carbon footprint, and that car manufacturers are allowed to buy e-fuels and add them to petrol at filling stations. However, climate protectionists are against e-fuels for cars as many other transport methods, such as shipping, cannot be electrified. In addition, energy is lost when converting renewable energy to e-fuels, meaning cars that run of them actually require more electricity than e-cars.

Despite its wide range of car industry suppliers, Germany has not included passenger vehicles in its green hydrogen plans and largely focused on fully electric vehicles. But the new coalition treaty stopped short of naming an end date for combustion engine technology, a demand voiced by the coalition partner Free Democrats (FDP). The party that provides Germany’s new transport minister, Volker Wissing, has consistently advocated for including e-fuels in mobility transition plans.

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The potential of cannabis for climate action and sustainability should be included in the new German government coalition’s plans, the German Cannabis Industry Association (BvCW) and the Federal Sustainability Association (BVNG) have said in a joint statement following the coalition’s announcement that it will legalise recreational cannabis use. The hemp industry can contribute to climate action and sustainability in many different fields, for example by using the plant as a carbon sink; in food production or by replacing synthetic materials in clothing and construction with hemp fibres. “At lot has been forgotten in terms of hemp use over the past 70 to 80 years,” said BVNG deputy leader Martin Wittau. The new government must therefore quickly remove cannabis from the list of illegal drugs and instead invest in research and development regarding the many benefits the plant may offer in a more sustainable economy. The lobby groups point out that their call is backed by the European hemp industry, arguing that EU-wide support is needed to strengthen the continent’s budding hemp businesses with respect to competitors, for example from North America.

 The new German government’s coalition treaty stipulates a legalisation of cannabis production and retailing in licensed stores, following decades of the plant’s criminialisation. The move would create one of the world’s largest markets for cannabis products, which apart from its use as a drug has a variety of properties that make the plant a versatile material for construction and other purposes.