Next German gov’t must raise climate ambition to avoid multi-billion-euro EU target miss – env agency
Germany is on track towards missing crucial short-term climate targets under European Union rules, unless the government implements more effective measures and policies to reduce emissions especially in the transport and building sectors, UBA said.
“It is becoming increasingly clear that Germany is at risk of falling well short of its targets under the EU Effort Sharing Regulation (ESR) between 2021 and 2030,” said the agency in a press release on its emissions projections report 2025. Due to lagging progress in the transport and buildings sectors, the country is looking at a gap of 226 million tonnes of CO2 equivalent in that period. The agency’s projections from exactly one year ago had put the gap at only 126 million tonnes of CO2 equivalent.
“Transport has not delivered at all,” said outgoing economy and climate minister Robert Habeck from the Green Party during a press conference in Berlin. Missing the effort sharing target could result in payments “worth billions of euros,” said Habeck.
Transport decarbonisation has long proven to be a weak spot in Germany’s energy transition, as emissions from cars, lorries and other means of transportation have not decreased significantly since the 1990s. The country’s key advisory group, the Council of Experts on Climate Change, has repeatedly warned of target failure for the sector.
“Without rapid readjustment in these sectors, there is a risk of soaring CO2 prices and high payments to other EU countries,” the environment agency said, adding that these compensation payments could be more effectively utilised for investments in domestic transformation and greenhouse gas reduction. The less climate action progress there is in transport and buildings, the higher will be the carbon price in the upcoming new EU Emissions Trading System (EU ETS 2), which puts a CO2 price on fuels such as petrol and heating oil.
Around 60 percent of total emissions in the EU are governed by an joint target for member states under the Effort Sharing Regulation. The scheme covers emissions from transport, buildings, waste, some smaller industries and agriculture, which are not covered by the Emissions Trading System (EU ETS).
Under the regulation, all member states together are to achieve a joint emissions reduction of 40 percent by 2030 compared to 2005 levels. However, member states are required to contribute depending on their relative wealth, meaning Germany has a much higher responsibility than, for example, Poland. Germany's target is a 50 percent reduction in emissions by 2030 compared to 2005 (Its national target is to reduce emissions by 65 percent by 2030 compared to 1990 levels). Failure to comply with its EU reduction targets could mean Germany would have to buy emission allocations (each worth one tonne of emissions) from other member states that have overachieved their targets - at a high cost.
For the period until 2020, the country already had to buy more than 11 million allocations from Hungary, Bulgaria and the Czech Republic for one euro each, but the price will certainly be much higher for the 2020s, as almost all member states will struggle to reach their targets and there is set to be a high demand for allocations. The EU ETS price is currently around 70 euros per tonne of CO2. At this price, the effort sharing target miss could cost the state almost 16 billion euros. However, the allocation price is negotiated between governments behind closed doors.
Climate must play central role in coalition talks – NGOs
Environmental NGOs have criticised the minor role played by climate action in the first agreement that will form the basis for further talks between the conservative CDU/CSU alliance and the Social Democrats (SPD) to form the next government coalition.
Climate action had to finally play a “central role” in the coalition negotiations and especially for plans to make new debt-financed investments in infrastructure worth hundreds of billions of euros, said Christoph Bals, chief policy officer at Germanwatch. “Growth that is not aligned with climate targets would quickly lead to an increase in emissions,” he said. One example were “the oversized ideas in on reserve power plants based on natural gas without a requirement to quickly convert these to green hydrogen.” The parties had said they aimed to build 20 gigawatt worth of new gas power plants to ensure supply security but fell short of spelling out a path for decarbonising this newly added capacity in the long-run.
UBA president Dirk Messner said he was "worried by the muted demand for battery electric cars” in the prospective new government parties' plans. He advised policymakers to take a look at France, where social leasing offers for EVs have supported the ramp-up. “The agreed phase-out of fossil fuelled cars by 2035 should definitely be upheld,” Messner said about current EU legislation. The measure would be important both for climate protection and for companies' planning security, he addded.
The conservative CDU of likely next chancellor Friedrich Merz had said in the election campaign that it aimed to reverse the combustion engine phase-out– a topic that was not included in first agreements of the ongoing coalition talks with the Social Democrats (SPD).
However, the prospective government coalition parties have said they want to re-introduce incentives for purchasing electric vehicles, and discuss the modernisation and expansion of public transport, as well as the continuation of the country's nation-wide public transport flat-rate fare (Germany Ticket) in the ongoing formal coalition negotiations. The first agreements did not include many details on slashing emissions in the building sector, for example regarding the conservatives’ earlier call for abolishing the outgoing government's law to phase out fossil fuel heating systems.
NGO umbrella organisation Climate Alliance called on the next government to present an ambitious climate action programme as soon as possible. The German climate law stipulates that a new leadership must present such an overarching programme of measures to ensure the country reaches its targets. At the same time, the organisation’s political managing director, Stefanie Langkamp, criticised initial agreements by the CDU/CSU alliance and the SPD. “The parties have not presented a plan for achieving the national climate targets,” she said. “They seem to be completely at a loss for ideas on how to make buildings and transport climate-neutral.”
National target within reach – if all goes as planned
The environment agency’s projections also showed that Germany is set to almost reach its national target of reducing overall emissions by 65 percent by 2030 compared – the country currenlty headed towards 63 percent, the UBA found. This is thanks to the energy sector providing an outsized contribution, where the phase-out of fossil fuels - particularly coal - is accompanied by a rapid expansion of renewables.
In 2024, total greenhouse gas emissions fell 3.4 percent compared to the previous year, continuing a trend that has been ongoing since around 1980. Compared to 1990, Germany has now reduced emissions by 48.2 percent.
Just like today, last year’s projections had seen the country mostly on track towards reaching its national 2030 target, if it managed to implement all planned policies. This assessmentth was called into question by the country's Council of Experts on Climate Change, as budget woes and a weakening of policies, such as the law to phase out fossil fuel heating, had not yet been taken into account. In a next step, the council will assess this year’s data and is set to present a report in April.
Bleaker long-term outlook
The projections also looked beyond the near-term targets, finding that Germany is only headed for an 80 percent reduction under the current policies by 2040 - while it aims to reduce emissions by 88 percent by that year and achieve greenhouse gas neutrality just five years later.
“To achieve permanent greenhouse gas neutrality from 2045, it is important to tap into all reduction potentials in order to keep the need for negative emissions as low as possible,” said the environment agency, adding that current policies to increase the volume of natural carbon sinks, such as forests and peatland, are insufficient. Germany must increase efforts to restructure its forests and grow them, and also raise the carbon intake of soil, the UBA cautioned.
The agency emphasised that Germany’s forests by now have turned into a net emitter of greenhouse gases, which could capsize plans for using the land use sector (land use and land use change – LULUCF) as a carbon sink. “The former carbon sink is becoming a carbon source because ecosystems are being damaged by climate change, and this development will continue,” said Messner.
Marion Tiemann of NGO Greenpeace said that “without further steps, Germany will miss its long-term climate targets.” She called on the next government to introduce policies including a tax on new combustion-powered SUVs and using these funds to promote small electric cars, expanding access to public transport, especially in rural areas, and investing in heating networks.
Expiring legislative period has been “turning point for German climate policy” – minister
Economy minister Habeck looked back at his three-and-a-half-year tenure that started in late 2021 and ended prematurely with the coalition's collapse in November 2024. Habeck called the period “a turning point for German climate policy,”arguing that that projections when he entered office had still shown a cumulative gap to meeting the 2030 target.
Germany aims to cut 1,200 million tonnes of CO2 equivalent across all sector and has now turned the gap into an overall cushion of 80 million tonnes - if current trend persist. Both Habeck and UBA head Messner commended the EU ETS 1, the original emissions trading system for energy and industry. The system had helped speed up a “dramatic reduction” of coal use in Germany, the minister said. Looking ahead, Messner said that the rising carbon prices in the system would eventually push coal out of the market by 2035.
