CLEW Guide – Germany's 2030 climate targets in reach, Scholz's government enters final year

• As Europe’s largest economy, Germany is a key energy hub in the heart of the continent.
• Greenhouse gas emissions have decreased 46 percent since 1990 and Germany aims for climate neutrality by 2045.
• Germany’s trademark “Energiewende” – the country’s transition to climate neutral and nuclear-free energy supply – has broad public backing.
• Sixteen years of conservatives-led governments under chancellor Angela Merkel came to an end in 2021 when the three-party coalition of SPD, Greens and FDP was elected,  putting a focus on climate-friendly transformation and setting the frame for urgently needed transition steps. With some delay, the coalition presented a comprehensive Climate Action Programme 2023 to put the country on track to reaching its climate targets. However, months-long disputes on key climate policies – such as the phase-out of new oil and gas heaters – have held up progress. Increasing uncertainty from government turmoil casts a doubt over Germany’s energy transition progress even more.
• Germany’s three-party coalition government seems increasingly fractured following a federal budget crisis and painful defeats in several elections, casting a shadow over the progress of the country’s energy transition. One year ahead of the next federal elections, scheduled for 28 September 2025, populist parties which oppose the government's core climate and energy policy made huge gains in three state elections. Parties are bracing themselves for a difficult election campaign as far-right and populist politicians stand to benefit from the increasingly politicised climate debates. [Find more background in this factsheet on East Germany and the energy transition and our deep dive into the impact of the rise of populists in power].
• Projections by the country's Federal Environment Agency (UBA) showed that the country is on track towards achieving its 2030 climate targets for the first time, not least thanks to the resolute expansion of renewable energy sources. Preliminary figures for the first half of 2024 published by UBA showed that renewables covered 57 percent of the county's gross electricity consumption. At the same time, warmer weather and an economic slump have reduced the country's total energy demand between January and the end of June, meaning the use of coal power decreased nearly 19 percent compared to the same period one year earlier, energy industry and research initiative AGEB said.
• Germany continues to struggle with high emissions, especially in the transport and buildings sectors. Moreover, demand for electric cars is sluggish, with carmaker Volkswagen preparing layoffs at production sites as sales of EVs slump. The current government target of putting 15 million electric cars on the road by 2030 increasingly looks difficult to reach, and observers are expecting the country to miss it by up to five years. Car manufacturers are also slowing down or scaling back plans to switch their production towards EVs.

Major transition stories

• Country on track to reaching national 2030 climate target – Germany is largely on track to reaching its national target to reduce total greenhouse gas emissions by 65 percent by 2030, according to projections by the country's Federal Environment Agency (UBA). If Germany manages to implement climate policies as planned – including a rapid renewables expansion, the phase-out of fossil fuels and the switch to clean technologies in all sectors – energy and industry emission cuts will even exceed the sector targets, but those from transport and buildings will remain far off track. However, the projections overestimated the amount of emissions which would be cut in the coming years, said the Council of Experts on Climate Change, which blamed the misjudgement on climate budget cuts and outdated assumptions about gas and CO2 allowance prices. Germany also still looks set to also fail its EU goal for sectors such as transport, buildings and agriculture. UBA also presented emissions data for 2023, which showed a 10 percent reduction, largely due to reduced fossil fuel use for electricity generation and heating, and to a weak economy, which pushed down energy-intensive industrial production.
• Same level of ambition, significantly less money –  In late 2023, a constitutional court ruling on Germany's so-called debt brake declared tens of billions of euros earmarked for climate and transition projects as unlawfully booked. The consequences still reverberate today, as the government struggles to find alternative funding sources and re-draws spending plans. A final decision on the 2025 funding plans is due in November 2024.
• Climate foreign policy – Germany is seen as a credible leader in international climate talks despite shortcomings at home, and has hosted the annual Petersberg Climate Dialogue for more than a decade. The government published a climate foreign policy strategy set to ensure all government ministries speak with one voice to international partners to foster a socially just and economically successful move to climate neutrality worldwide. The strategy accompanies the security policy strategy and a China strategy, both published in 2023.
• Just transition – What started out with a debate about supporting coal workers in mining regions and state subsidies for so-called “structural change” is increasingly turning into a cross-societal debate about leaving no one behind in the transition to climate neutrality. Installing a heat pump, buying an electric car or dealing with higher fuel costs due to CO2 pricing affects everyone, but low-income households will need more support to manage the changes. A just transition will become a big issue not only in Germany, but across Europe, when the new EU emissions trading system for transport and buildings starts in 2027. The "climate bonus," which the government promised in its coalition agreement and which would return some of the revenue from Germany's carbon pricing to low-income citizens, will not be delivered in this legislative period.
• Sustainable finance – In contrast to its reputation as an energy transition pioneer, Germany has been a latecomer in tapping into the potential of compelling banks, insurance companies, fund managers and other financial actors to curtail CO2-intensive projects and fund cleaner alternatives. The German government coalition under chancellor Scholz has vowed to quickly expand the country's role in the transition to green and sustainable investment practices and fully integrate the financial sector in its climate policies.
• Adaptation – The latest climate change monitoring report urged Germany to step up its efforts to adapt to the already unavoidable effects of climate change. The country faces a multitude of negative impacts, including prolonged droughts, severe water loss, and increasing temperatures. The government has passed a law making it legally binding to draw up climate risk assessments and implement adaptation measures. It has now presented a draft of the accompanying Climate Adaptation Strategy which, for the first time, sets measurable targets to increase preparedness. In addition, the government has presented a water strategy and a natural climate action strategy.
• Carbon removal – A long-term strategy for negative emissions is set to introduce a 2060 target for net-negative greenhouse gas emissions and intermediate targets for technical carbon sinks. The strategy, of which the government released a first outline, will look at different methods to capture, remove, store and use carbon dioxide and consider economic incentives to help ramp up the corresponding industrial infrastructure. It also states that natural sinks (such as forests) capturing carbon will not be enough to balance out the remaining greenhouse gas emissions beyond 2045. Technological means (such as direct air capture, DAC) are therefore necessary to reach climate neutrality.
• Climate protests – Following the large success of youth protests led by the Fridays for Future movement since 2018, which helped convince large parts of society that ambitious action is needed, more drastic forms of protests such as activists gluing themselves to streets or throwing paint at art works and landmarks such as the Brandenburg Gate provoked mainly negative reactions. Faced with dwindling numbers of participants, Fridays for Future has begun teaming up with other interest groups in society and launched a protest for better public transport funding together with labour union Verdi, which represents workers in the sector.
• Raw materials and recycling – The energy crisis fuelled by Russia’s war against Ukraine has pushed the dependence on imports of key raw materials high on the subjects for  debate in Germany and Europe. The government presented a draft circular economy strategy, and has adopted its China strategy. The EU also presented a Raw Materials Act to ensure the union has access to critical materials needed for energy transition technologies.
• 'Franco-German engine' – The European Union faces a multitude of parallel challenges that share the question of how and where it sources its energy in the future. From the increasing urgency to act on emissions reduction over security risks raised by Russia's war on Ukraine to economic stability in a world of rapid industrial change, the two core EU members France and Germany must come clean on the bloc's energy strategy to make it fit for the tasks ahead, but headlines have been dominated by division over the role of nuclear plants, renewables and combustion engines.
• Challenges – Major roadblocks on the path to climate neutrality include a lack of skilled workers to implement renewable energy expansion plans and energy efficiency projects, as well as grid expansion. The government has reformed immigration laws with the aim of filling tens of thousands of vacant energy transition jobs. Separately, network agency BNetzA is set to issue power grid expansion permits on a large scale from 2024, and has allowed distribution grid operators to throttle electricity flows to heat pumps and electric vehicles in a bid to speed up their uptake in the face of challenged distribution grids.
• Farmers protests – Farmer protests across Germany at the beginning of 2024 highlighted the difficulties faced by the government to reconcile decarbonisation efforts with budget restrictions and social cohesion. At the same time, the effects of climate change are felt significantly stronger in the sector.

Sector overview

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• CLEW’s Easy Guide to Germany’s transition with background information and links to key energy and climate data.