Dispatch from Germany

***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

• Coalition frictions – A clear defeat for the government coalition in the EU election, including the worst-ever result in a nationwide election for Scholz's Social Democrats and a hefty drop for the Greens compared to 2019, is set to intensify frictions within the three-party alliance in the coming months. Calls for the chancellor to follow the example of French president Emmanuel Macron and allow for possible snap elections are mainly political point-scoring by opposition parties. None of the parties in the government coalition stand to gain from such a step and the risks would be high. In addition, the process is more complicated involving a vote of no-confidence in parliament and an ultimate decision of the German president.
• Eastern state elections – The EU vote also brought an unprecedented result for the AfD in Germany, with the far-right party emerg ing as the second strongest after the conservative CDU. The populist group even became the strongest party in the country’s East, where a string of three state elections looks set to keep tensions in the coalition high, especially at the peak of the election campaign during the parliamentary summer break. Together with leftwing-populist newcomer party BSW, led by former Left Party member Sarah Wagenknecht, the AfD gained over 40 percent of the votes in the formerly communist region. Both populist parties call for re-entering into full energy trading with Russia, and openly question the approach of the EU and NATO to contain and halt Putin’s war on Ukraine. Researchers and civil society warned that wins for the populist and far-right camp across several countries means that it could become more difficult to introduce ambitious climate and energy transition policy going forward. [Also read our deep dive on the impact populists have on EU climate efforts.]
• Finding funds – The election outcome makes the ongoing 2025 budget negotiations even more difficult. These are already hampered by the constitutional court's ‘debt brake’ ruling on limits to government borrowing that rocked the coalition in late 2023. The SPD already said it would not agree to a budget which "endangered social cohesion", while the FDP continues to call for making cuts instead of allowing new debt. Chancellor Scholz's spokesperson Steffen Hebestreit said that the goal of the government continues to be to agree a budget draft in cabinet by early July (mark 3 July in your calendar for now). Then, negotiations will continue in the parliament in the months that follow. 
• How to reach 2030 climate targets – Germany, like all other EU member states, must submit its final updated National Energy and Climate Plan (NECP) for the years until 2030 to the European Commission by 30 June. It's on the cabinet agenda for mid-July, and the government was late submitting its draft last year, as well.

The latest from Germany – last month in recap

• Target miss – Germany's Council of Experts on Climate Change said the country is still set to overshoot its greenhouse gas emission budget until 2030, contradicting government projections published earlier this year. The council blamed the misjudgement on climate budget cuts and outdated assumptions about gas and CO2 allowance prices. The council proposed the reintroduction of the "climate cabinet" – first established under former chancellor Angela Merkel – to develop more long-term measures.
• Floods – Several regions in Germany have been hit by flooding caused by heavy rainfall in recent weeks, prompting discussions about nationwide mandatory insurance against natural hazards. Chancellor Scholz, having visited four different flooding disaster zones so far in 2024, said more frequent extreme weather and its consequences are “not merely a disaster, but the result of climate change”. Environment minister Steffi Lemke said severe floods are no longer a “once-in-a-century” event, but rather “a new reality” that the country must come to terms with.
• Coal exit report delay – The economy ministry said that a report about the effects of the country’s coal phase-out on energy security, power prices, and the climate targets – originally due in summer 2022 – would be presented in spring 2025. It argued that the energy crisis, as well as work on the ministry’s forthcoming power plant strategy, have been major factors in delaying the report.
• Coal region support – The European Commission agreed in principle that the German state can provide eastern lignite operator LEAG with at least 1.2 billion euros in compensation for the legally-mandated coal exit. A potential additional 550 million euros depends on whether it becomes clear that LEAG's power plants would have been economically viable beyond the closure dates stipulated in the coal exit law, causing LEAG to lose out on profits due to the mandated phase-out.
• Carbon storage – The government cabinet has updated and agreed a draft law that would allow CO2 storage underground in Germany to help the country reach greenhouse gas neutrality by 2045 and net-negative emissions thereafter. A crucial change to an earlier draft means that – in addition to allowing the injection into the seabed off the country's coasts – federal states could decide whether to also allow onshore storage on their land. So far, carbon storage has been a toxic topic in Germany, and it remains unclear whether the population would support storage near their homes.

Julian's picks – Highlights from upcoming events and top reads

• I'm really not a football fan but, since Euro 2024 kicks off today (14 June) with the opening match of host nation Germany against Scotland, I can recommend my colleague Ruby Russel's piece, which examines the tournament’s sustainability claims.
• Nature, on the other hand, is much more up my alley: Any early-career birdwatchers here? I highly recommend downloading the Merlin Bird ID app by the Cornell Lab of Ornithology at Cornell University. There are several ways to help identify a bird, including sound ID. My recent spottings (hearings?) include cuckoos, owls, nightingales, and loads of common chiffchaff.