Germany

Germany’s current policies are almost sufficient when compared to modelled domestic pathways. With implemented policies, Germany will not achieve its 2030 or long-term targets. According to the German government’s projections, it would achieve the overall 2030 target with planned policies, but not all the sectoral targets: achieving the overall target relies on the energy supply sector decreasing emissions much faster than others. The “Almost sufficient” rating indicates that Germany’s climate policies and action in 2030 are not yet consistent with limiting warming to 1.5°C but could be, with moderate improvements. If all countries were to follow Germany’s approach, warming could be held at—but not well below—2°C.

Further information on how the CAT rates countries (against modelled pathways and fair share) can be found here.

The current German government, in power since December 2021, is significantly accelerating domestic climate policy implementation, but remains deeply divided on the general approach, reflecting the divergent positions of the different coalition parties. While the Green Party is pushing for fast action, e.g. in buildings and for renewables, the Social Democrats and in particular the Liberal Party are delaying implementation. All parties support expansion of LNG terminals, which is counterproductive to climate policy.

The restructuring of the ministries at the beginning of the legislature looked like giving emphasis to climate: there is now one Ministry of Economic Affairs and Climate, which lifts climate policy up the agenda. The Ministry of Foreign Service is now responsible for climate change negotiations, giving it prominence. The Ministries of Transport and Finance in turn have ministers from the Liberal Party, which has a far more lenient approach to climate policy than the Green Party.

In the coalition contract, the new government decided not to raise the ambition of the mitigation target, but promised the measures adopted in the coalition agreement would overachieve the target (ARD, 2021).

The coalition also wanted to introduce a climate check for each new law, but implementation has been slow. In early 2023, the Federal Environment Agency (UBA) tendered a project to consider possible approaches. Given the timeline of this project, it seems the climate check will not conclude in 2023.

To cope with Russia’s unlawful invasion of Ukraine and related energy security issues, Germany has introduced a set of measures, some of which are counterproductive to climate policy. This includes measures related to transport in mid 2022, a sector that is already lagging in climate action, but also the planned overcapacity of LNG import infrastructure (Höhne et al., 2023b; Marquardt et al., 2023), which risks a lock-in of fossil fuels, and brings into question Germany’s long-term ambitions for GHG neutrality.

The new government is also looking into ramping up LNG import capacities and “long-term energy partnerships” with other suppliers. Chancellor Scholz announced his intention to support fossil gas extraction in Senegal in order to import LNG to Germany. With this aim, he suggests rolling back the Germany’s COP26 commitment to no longer finance fossil fuels abroad.

The coalition embarked on making the climate transition socially just, but has so far failed to do so. A climate dividend (“Klimageld”), to pay back revenues from carbon pricing on a per capita basis, was planned in the coalition contract but will now probably only be implemented in 2028, under the next government. A temporary rebate on VAT for fuels and a compensation mechanism for high gas prices were given without social differentiation. A positive step is that the new heating law contains plans to differentiate the subsidies for CO₂-free heating systems by household income.

In general, Germany is not on track to meet its climate target for 2030 with implemented policies. A government report with new projections, due in March 2023, was only released by the Umweltbundestamt (UBA) in August 2023 (Federal Environment Agency, 2023). Our analysis, based on the report, projects total GHG emissions at 455 – 483 MtCO₂e in 2030. This is a clear improvement compared to our previous assessment, yet still misses Germany’s climate targets of 435 MtCO₂e in 2030 (or 439 MtCO₂e in 2030 using global warming potentials from AR5).

It seems unlikely that the government will step up the kind of pace in action required to meet its own emissions reduction target. After two years of the coalition government, the government’s own projections report and Expert Group on Climate Policy found that current policies are not sufficient to meet its target. The government has still not submitted the emergency programmes required by the current climate law. Heated debates about the recent climate policies make it unlikely that significant new policies can be agreed in the remaining time of the coalition government.

According to the targets legislatively anchored in the climate law, the energy sector (electricity and heat supply) will have to limit its GHG emissions to 108 MtCO₂e by 2030, a reduction of 62% below 1990 levels. In 2022, total emissions from the energy supply sector stood at 256 MtCO₂e, an increase of 11 MtCO₂e compared to the previous year, due to the additional use of coal-fired power generation in an attempt to save gas (Expertenrat für Klimafragen, 2023b).

The currently legislated slow and gradual coal phase-out by 2038, large new investments into gas infrastructure, and difficulties with the expansion of renewable energy capacity pose a risk to Germany’s ability to reach its longer-term targets for 2030 and 2045, and a burden on global emissions budgets which require a coal phase-out by 2030. The government intends to phase out coal by 2030, has negotiated it for the western coal mines and is attempting to do the same in Eastern Germany.

With currently adopted policies, Germany may meet its sectoral target in 2030, but not for the full period from 2023 to 2030. The UBA’s report indicates the electricity sector could be the only large sector meeting its sectoral target for 2030. However, the report assumes that the renewable electric capacity increases as in the government's original plans from early 2022. For solar energy, this has been the case. For wind energy, implementation so far has fallen behind.

Prices for CO₂ emission allowances in the EU emissions trading system (EU ETS) that also apply to German coal power plants have risen continuously, reaching an all-time high of EUR 100/tCO₂ and currently levelling between EUR 80-100 /tCO₂ (Ember, 2023). With the reform of the EU ETS, it is expected that these prices will stay at that level or increase even further. Such high prices make coal very unattractive compared to renewables.

Renewables

Accelerating renewable energy expansion is a priority of the new German government and has been approached in a very comprehensive manner through increased targets and planned legislative measures that aim at overcoming very specific challenges for renewables in Germany. This approach, if implemented effectively, will be a game changer for renewable energy in the country, and could serve as a good example for other countries.

The Renewable Energy Law (EEG) and the wind energy offshore law (WindSeeG) was revised, determining that renewable energy installations are of public interest so they can be prioritised over other issues, give particular support for rooftop solar PV, increase the focus on participatory models for citizens, support storage and redirect biogas towards flexible power generation (BMWK, 2023g, 2023d).

Electricity generation from renewables stands at 60% January to mid-August 2023 (Fraunhofer ISE, 2023a).

The German government aims to raise the share of electricity generated from renewable energy to 80% of gross electricity consumption by 2030 (Federal Ministry of Economics and Climate Protection, 2022a) while increasing overall electricity use to further electrification in transport, buildings and industry. This goal is not yet fully aligned with the Paris Agreement but is getting close: studies suggest that the share of renewable electricity in total generation needs to reach 85-100% by 2030 to be compatible with a 1.5°C pathway.

The government is aiming for capacity additions for solar PV, wind onshore and offshore to a total of 360 GW cumulative installed capacity by 2030 (30GW offshore wind, 115 GW onshore wind, 215 GW solar PV)(Federal Ministry of Economics and Climate Protection, 2022b), which is almost three times the current capacity of 130 GW (Fraunhofer ISE, 2023b).

Solar capacity additions are ramping up again, showing the effect of the new government policies. If the trend of the first six months continues (Fraunhofer ISE, 2023c), Germany will build around 12 GW of new solar capacity in 2023, which is, for the first time, above the previous all-time high of 8 GW in 2012 and meeting the government’s plan of 9 GW. The plan is to annually expand solar capacity by 22 GW by 2028 (Wirth, 2023), which would be twice as fast as 2023.

Wind capacity expansion is still below its all-time high of 5.5 GW in 2017. In 2023, it's likely that 3 GW will be newly built (Deutsche WindGuard GmbH, 2023), whereas 6 GW were planned (BMWK, 2022). This needs to be ramped up to 16 GW by 2029, five times faster than in 2023.

The government's own projections report also assumes the expansion targets for wind are met, which we would judge as optimistic. For our analysis we use a range for wind expansion between fully meeting the target and only adding half the capacity each year.

As part of its National Hydrogen Strategy (German Government, 2020b), the government is providing EUR 11 bn to support projects and is negotiating “contracts of difference” with companies, through which the additional costs compared to conventional production are compensated (BMWK, 2023a). The first contract is to be closed by the end of 2023 (BMWK, 2023b). The strategy was updated in June 2023 and doubled the previews goal for electrolyser capacity from 5 GW to 10 GW in 2030 (BMWK, 2023c). The strategy also includes support for several projects to import green hydrogen to Germany from Australia, Morocco, Brazil and South Africa, and the development of an auction model for green hydrogen. The hydrogen strategy explicitly includes also hydrogen from fossil gas for an interim period.

Coal phase-out

The share of coal in the electricity system has been halved over the last five years, but still stands at 25% for January to mid-August 2023, of which two thirds are from lignite, the most emissions-intense form of coal (Fraunhofer ISE, 2023a). Roughly one third of CO₂ emissions from coal-fired electricity generation in Europe is from Germany (IEA, 2021).

In July 2020, the previous government adopted a coal exit law stipulating the last coal-fired power plant will be closed by 2038. The compromise was found only by compensating the affected regions (with EUR 40bn) and the affected companies operating the coal-fired power plants (with an additional EUR 4.35 bn) (Agora Energiewende, 2019; Bundesministerium für Wirtschaft und Energie, 2019).

In November 2020, the European Commission approved the proposed competitive coal phase-out tender mechanism under the coal exit law (European Commission, 2021). In the first auction rounds between September 2020 and March 2022, the Federal Network Agency awarded bids for a combined capacity of around 9.7 GW (Bundesnetzagentur, 2022). The operators received up to EUR 165,000 for each MW of installed capacity to be phased out by the end of 2022 at the latest and, in 2021, a total of 5.8 GW coal capacity was retired (Bundesnetzagentur, 2021, 2022; Global Energy Monitor et al., 2022).

The current government coalition aims to phase out coal “ideally” by 2030 and has moved its review of the phase-out date forward to 2022 from the original date of 2026 (Federal Ministry of Economics and Climate Protection, 2022a).

First attempts to move the coal phase-out to an earlier date have likely led to more greenhouse gas emissions according to our analysis: in early 2022, the largest coal operator in west Germany, RWE, and the state government of that region struck a deal under which the coal phase-out would be moved forward from 2038 to 2030 at the expense of moving the shut-down of some capacity originally scheduled for a 2022 closure back to 2024, in an attempt to save gas.

For RWE this is probably a good deal, because it will lead to more operating hours before 2030 than originally planned. After 2030 it would likely not have been viable to operate the coal-fired power plants anyway, because of the high carbon price expected from the revised EU ETS. This deal saved several villages from destruction. However, it didn't save the iconic village of Lützerath as it was argued the lignite underneath the village was needed for energy security in Germany (RWE Power AG, 2023). This was contested by scientific groups (Oei et al., 2023), heavily criticised by civil society, and led to major protests.

Fossil gas

Fossil gas is currently providing 16% of Germany's electricity. Only 12% of gas is used in the electricity sector: most is used in industry and for heating.

If renewables are expanded as planned and coal is phased out, the existing gas-fired power plants could provide the remaining electricity, if they run on a higher load. This is, however, unlikely, as with the large share of variable renewables, the flexibility of other sources in the system will need to increase and will need to cover peaks in demand, rather than running long hours. Building new gas peaker plants is expensive. While power plants that operate as combined heat and power (CHP) generation are more efficient, they are much less flexible, with only a limited ability to react to variations in the grid.

The German government should carefully consider which combination of storage capacity, grid investments, demand management and additional gas peaker plants is most (cost) efficient when moving to a high share of renewable energy. The stakeholder consultation process “Platform for a climate neutral electricity system” (BMWK, 2023f) is working to fill the current gap of a lack of a public government document with an overall plan.

As a reaction to the Russian invasion of Ukraine and the need to reduce dependency energy imports from Russia, the German government is pursuing partnerships with other potential suppliers. These include Qatar, the US and Senegal (Tagesschau, 2022). Such long-term partnerships not only risk a lock-in of the German economy into the unsustainable use of a fossil fuel, but also threatens the necessary transition in the partner countries and raises questions around international justice and geopolitical risks.

Nuclear

In April 2023 the last nuclear power plant was disconnected from the German grid. Due to the gas crisis, the end date was postponed from 31 December 2022 to 15 April 2023. The shutdown provides investment certainty for renewables and paves the way to a truly sustainable electricity system. In the first month after the closure of the last nuclear plant, no effect on electricity prices was observed and experts assume that over the remainder of 2023 solar and wind will compensate for two thirds of the demand, and reduced exports to France for the remaining amount of nuclear electricity (Storch, 2023).

The industry sector in Germany emitted 164 MtCO₂e in 2022, about a fifth of Germany’s total emissions. The sector's emissions declined rapidly in the 1990s. Since the 2000s, this decline has slowed, with fluctuations mostly driven by the overall economic climate, rather than climate policy.

In 2022, many industries decreased production as a result of the high gas price, and emissions fell by 10%, overachieving the sector target for the year by 13 MtCO₂e. The effect of energy efficiency measures or other structural changes that would reduce emissions in the long term is potentially small (Expertenrat für Klimafragen, 2023b). To get on a target pathway to climate neutrality, the industrial sector would need to reduce fossil energy consumption much faster, and electrify processes at much greater speed (ibid). By 2030, the climate change law foresees an annual limit of 119 MtCO₂e for industry, which would be exceeded based on the forecast of UBA(Federal Environment Agency, 2023).

The EU ETS, which includes large industrial installations, showed new record prices on CO₂ in 2022 (UBA, 2023a). The effect of this additional cost for emissions-intensive processes, however, was small, as a large amount of allowances for industry were still free. This is set to change over the next decade and the target of achieving net-zero by 2038 under the EU ETS is a strong signal for industry to decarbonise.

In the short term, there is still a risk that industrial players miss investing in low-carbon solutions, as the technologies are still new and more expensive, even if they pay out in the long-term. The government thus intends to support interested companies with “Carbon Contracts for Difference” (BMWK, 2022b), which guarantee a certain fixed price for a product if the market doesn't reach this level. The first agreements are planned for the end of 2023 (BMWK, 2023b). This innovative policy would allow industry to make significant investments in new CO₂-free technologies, without the risk that the product will fail on the market.

Another challenge in electrifying the industrial sector is the relatively high electricity price. In May 2023, the Ministry of Economy and Climate Change introduced a working paper on electricity prices for energy-intensive installations. The paper suggests measures to facilitate access of industrial players to “cheap green electricity” in the long term, through contracts of difference and power purchase agreements for industries with renewable energy producers, including public guarantees to de-risk those agreements.

To alleviate the burden on the sector in the short and medium term, the paper suggests a temporary cap on the electricity price of EUR 6 cents per kWh for up to 80% of the previous energy use. BWMK estimates the total public costs of the suggested measures at EUR 25-30 bn (BMWK, 2023h).

As a reaction to the COVID and energy crisis, governments of large economies, such as the USA and China, have implemented programmes to improve the competitiveness of their industries on the global market. Germany, where export industries are a big part of the economy, seems under pressure to follow along, and indeed already in the past has supported energy intensive industry on its territory though a range of exemptions and subsidies (exemption from the renewable energy levy, free allocation in the EU-ETS, contracts for differences, etc).

The government has the challenge to ensure a stable economy in the short term, while transitioning to a zero-carbon sector in the long term in a just manner. The subsidies to industries come at a high cost for public budgets and have in the past over proportionally affected households. Other measures, such as a robust regulatory framework that supports a long-term vision of transitioning and decarbonising the sector, alleviating bureaucratic challenges and efforts against the shortage of skilled workers, should at least complement the subsidies.

The transport sector is responsible for about 20% of Germany’s emissions. According to the government targets, transport sector emissions need to be reduced by 44% below 1990 levels, meaning they would have to fall to no more than 85 MtCO₂e in 2030. In 2022 they were still at 148 MtCO₂e, 9 MtCO₂e above national target pathway. Transport emissions in 2030 are currently expected to be well above the target (Federal Environment Agency, 2023).

Actions by the transport ministry

The current Minister of Transport seems to have no intention of meeting the national sectoral target for transport set under the current German climate law. Instead, his Liberal Party successfully negotiated, into the coalition agreement, the abolishment of the sectoral targets, and the implementation of emergency measures only if the national total is above the target (see Target tab).

Under the still valid climate law, the Ministry of Transport has to submit an emergency programme as it failed to meet its target path in 2022, but it has so far refused to do so.

The Transport Ministry has so far more blocked climate action than it has supported:

• Germany delayed the adoption of the new CO₂-standards for cars at the EU level and negotiated an exception for e-fuels. This is problematic, because there are no cars that only run on e-fuels, and e-fuels will remain very expensive in comparison to using electricity directly with battery storage. The focus on e-fuels therefore only prolongs the production of diesel and petrol cars.
• The ministry negotiated favourable treatment of 144 freeway projects that will be accelerated.
• The individual commuter support was increased during the energy crisis, which incentivises longer travel distance between home and workplace and therefore more transport activity.
• The carbon price increase in the German ETS was temporarily suspended due to the energy crisis.
• The ministry objects to a speed limit for freeways, although Germany is one of the few countries without such a speed limit. According to Federal Environment Agency research, a speed limit on highways of 130, 120 or 100 km/h would result in emissions savings of 1.5, 2 and 4.3 MtCO₂e/year, respectively, which is equal to 5-14% of emissions from passenger cars and light commercial vehicles on highways (Federal Environment Agency, 2022).

Recent policies that support emissions reductions include

• Restructuring of the freeway fee for trucks according to CO₂ emissions of the vehicles. The funds are to be used to expand railway infrastructure.
• The “Germany ticket” used on all German public transport and regional trains for EUR 49 a month, but the direct impact on emissions in 2030 is very limited.

The ministry is ignoring the advice of the government’s own environmental agency, which proposed a whole suite of measures that could be used to reduce emissions in the transport sector (UBA, 2023c).

Public transport

Support for public transport has slightly increased, but the government is far from reaching its own targets. The government's plans include doubling the volume of rail passenger transport by 2030 compared to today’s level, increasing the capacity and attractiveness of public transport, and raising the share of journeys undertaken by bicycle or on foot, but remain vague when it comes to specific instruments and finance for achieving these goals (Federal Ministry of Economics and Climate Protection, 2022a). To date, rail accounts for only 8% and cycling plus walking for only 6% of total passenger transport (Federal Ministry of Economics and Climate Protection, 2022a).

Deutsche Bahn, the national rail company, and the government further plan to invest EUR 86 bn into the rail network by 2030. The income from the increase of the freeway fee for trucks will be used to cover half of these investments. The other half is still missing.

Germany implemented the “Germany ticket” in May 2023. It's for use on German public transport and regional trains for EUR 49 a month. It is estimated that this ticket only leads to limited emission reductions in the short term below 1MtCO₂e/y (SMC, 2023). The long-term effect may be larger, because using public transport has become significantly easier.

Electrification of road transport

Government activities don't appear to be sufficient to achieve the government’s own target of 15 million electric vehicles by 2030. On 1 January 2023 around 1 million battery electric cars were registered in Germany (KBA, 2023). The share of newly-registered electric cars in July 2023 was 20% (ADAC, 2023b). It would need to increase significantly to meet the 15 million target.

The government target of 15 million electric vehicles by 2030 is not sufficient to meet the sectoral emissions target for passenger transport set in the climate law (Koska and Jansen, 2022). This would need to be increased to at least 20 million electric vehicles to meet the emissions target. Research finds that the measures in the coalition agreement are too weak to meet the 15 million target (Koska and Jansen, 2022). Consequently, additional measures are needed to accelerate EV uptake, including the introduction of a registration tax for CO₂-intensive cars, a higher CO₂-price, or a comprehensive reform of company car taxation.

The government reduced the purchase subsidy for electric cars: in 2023, the financial incentive for newly-purchased BEVs is up to EUR 6,750 (EUR 4,500 from the Government and EUR 2,250 from manufacturers). The level up to which overall price of a car is eligible for the support will be reduced from EUR 65,000 in 2023 to EUR 45,000 in 2024 (ADAC, 2023a).

Charging infrastructure is expanding, with 90,000 public charging points now in place (Bundesnetzagentur, 2023). The government aims for one million public charging points for electric vehicles by 2030.

Germany needs to apply the new EU CO₂-standards for new cars and trucks. Under this standard, new cars can only be registered after 2035 if they are emissions-free. The German government delayed the adoption of the new EU CO₂-standards for cars, instead negotiating a new category of cars only for e-fuels. This is problematic, because there are currently no cars that can only run on e-fuels s, e-fuels will remain very expensive compared to using electricity directly with battery storage. The focus on e-fuels therefore only prolongs the production of diesel and petrol cars.

Carbon price in the German ETS

The German government's carbon price on transport fuels is far too low to meet the target without other supportive measures. The fixed price was set at EUR 25/tCO₂ in 2021, increasing to EUR 30/tCO₂ in 2022. The planned increase for 2023 to EUR 35 was suspended due to the energy crisis, but as of 2024 the price will be raised to EUR 40. From 2026 new allowances will be auctioned in a range of EUR 55 to EUR 65/tCO₂e (German Government, 2020a). All proceeds from the system will be re-invested into climate protection or returned to citizens. The German ETS will be merged into the new EU ETS for transport and buildings as of 1. January 2027.

The impact of the German ETS on GHG emissions in transport is limited, as the carbon price of EUR 30 constitutes only a small markup on the petrol price (around 7 cents). Whether the price will change the investment behaviour of car owners depends on the level and predictability of the price in the future. The German Environmental Agency UBA estimates that a price of over EUR 350 would be necessary to reduce emissions to the sectoral target, if the price were the only additional measure (Harthan and Repenning, 2022). The government’s own projections report (Federal Environment Agency, 2023) assumes an increase to EUR 125 in 2030. It seems unlikely that such a high price is accepted by the current government as it could not agree on a significant increase for 2024.

The revenues of the system are channelled to the climate and transformation fund, which is the source of subsidies in for various sectors. Although the government had agreed to pay back the revenues of the carbon price to consumers, this will most likely only happen as of 2028. Administrative barriers are one issue, the fact that the revenues are already planned for other purposes, e.g. the climate and transformation fund, is another (Pokraka, 2023).

The buildings sector in Germany emitted 112 MtCO₂e in 2022, about 15% of Germany’s total emissions. 2022 emissions were at a new record low, also driven by the high gas price and relatively mild temperatures, but still exceeding the sector target by about 4 MtCO₂e.

Over the years, the emissions have declined, but the decline has slowed in the last decade. By 2030, the climate change law foresees a limit of 66 MtCO₂e for buildings, which the UBA forecasts will be exceeded, (Federal Environment Agency, 2023).

The government’s modelling seems too optimistic, as several policy proposals used as inputs were subsequently significantly weakened. For our analysis we use a range between the full implementation as calculated by the projections report and reduced implementation.

A recent Climate Action Tracker report stresses the importance of a comprehensive approach to increasing efficiency and speeding up decarbonisation, particularly in the buildings sector (Climate Action Tracker, 2022).

The government coalition agreed on a 65% renewable requirement for new heating systems from 2024, and producing 50% of all heat in a GHG-neutral manner by 2030, which would speed up the decarbonisation of the sector. By 2045, all heating systems would need to run fully on GHG-neutral energy (Federal Ministry of Economics and Climate Protection (BMWK), 2023).

A draft law to implement this principle for new heating systems received significant opposition. Subsequently, the government released a watered-down version, which delayed the start of implementation for some regions from 2024 to 2028, and introduced more exceptions and relaxed the use of wood heating.

The legislative process for this version was stopped by the federal court because of process questions. Although the proposed law did not prescribe specific technologies, effectively the requirements would increase the uptake of heat pumps, replacing gas and oil boilers. The proposed law included exceptions. There are also financial support programmes for a switch to renewable heating systems (Bundesamt für Wirtschaft und Ausfuhrkontrolle, 2023). The government is to pick up the process again later in 2023.

A law on planning and decarbonising district heating is also in the process, with the aim of a GHG neutral district heating system by 2045, including to increase the share of RE and waste heat in existing district heating networks to 30% by 2030 and 80% by 2040 and to 65% as of 2024 for new district heating networks (German Government, 2023b).

The government’s emissions projections assume an important contribution from the buildings law to their scenario with implemented measures, including the development of renewable heating networks. The August 2023 draft law does not fully guarantee it will meet the government’s own targets, as it includes various exemptions and a tight timeline to 2030 (e.g. communities with less than 100 000 inhabitants only need to provide their planning by 2028).

Another concern is the approach to green hydrogen, which the law seems to assume will be available for the buildings sector. Green hydrogen is a very expensive source of energy, meaning its use should be limited to applications without alternatives (NewClimate Institute, 2023). A clear direction for this energy source in the law would provide more certainty to the planning communities and the industry providing the required expertise and technologies.

Germany’s national emissions trading scheme “Brennstoffemissionshandelsgesetz – BEHG” covers all non-ETS sectors, incl. the buildings sector. Companies selling fossil fuels have to purchase certificates for the carbon content of those fuels, and pass on the additional financial burden to the end consumers through an increased price. The scheme started in 2021 with an initial price of EUR 25 per tonne of CO₂. It was meant to increase annually, but in 2022 the government postponed the increase because of the high energy prices driven by the illegal invasion of Russia in Ukraine. As of 2024 it is raised to EUR 40 per tonne of CO₂.

An increasing carbon price will mean that running fossil-based heating systems will cost more over time. This trend is foreseeable to informed building owners, but it can be assumed that most owners will lack knowledge and opt for a system with lower investment costs and a technology they are familiar with, unless they are forced to deviate from this by law. In the absence of a clear ban of new fossil heating systems, there is a risk that high prices for fuel will burden many house owners and tenants in the future.

The agricultural sector in Germany emitted 60 MtCO₂e in 2022, about 8% of Germany’s total emissions. Over the last two decades, emissions in the sector slightly declined, but at a slower rate than most other sectors. The largest source, with about half of the sector’s emissions, is methane from enteric fermentation of animals, followed by nitrous oxide emissions from agricultural lands.

In 2022, emissions from the agricultural sector remained under the sector limit set by the climate change law. For 2030, the climate change law foresees a limit of 57 MtCO₂e/a for agriculture, which the UBA forecasts will be almost met with implemented measures (Federal Environment Agency, 2023).

The production and consumption of animal products causes most of the emissions in the sector. 2022 saw a strong pick up of plant-based products in Germany, and meat consumption decreased by about 7.5%, also reflected in reduced production (Bundesanstalt für Landwirtschaft und Ernährung, 2023). This is still clearly above world average and beyond a level that might contribute to a healthy diet (Climate Action Tracker, 2018).

The trend towards a more plant-based nutrition seems to be speeding up; another factor for 2022 might be the increased food prices as a result of the energy crisis. To decrease the burden of inflation on poorer households and steer nutrition to more healthy diets, in early 2023 the German Minister for Agriculture proposed waiving the value added tax on plant products. At the moment, all food including meat and dairy products is taxed at a reduced rate of 7% (as opposed to 19% as other goods and drinks). This measure would need to be implemented by the Ministry of Finance who has not yet picked up this proposal.

The Minister also suggests limiting commercials for sugary products directed at children. While this would not reduce climate change, it could be an interesting concept to also apply to commercials for very CO₂ intensive products, or those commercials that incentivise overconsumption. A debate around these topics could reconsider the role of the marketing industry more generally in the transition to a 1.5°C compatible pathway.

In 1990 the German waste sector emitted 38 MtCO₂e (3% of total emissions). By 2021, emissions were at just 4 MtCO₂e - a decrease of 89% and contributing only about 1% of total emissions(UBA, 2023b). This was achieved mainly by ending the disposal of untreated residential waste and the increased utilisation of energy and materials from waste (Federal Environment Agency, 2017). Since 2005 landfilling of biodegradable waste has been prohibited in Germany.

The Climate Action Programme 2019 proposed three additional measures for the waste sector: 1) continued support of small landfill aeration projects, 2) additional support for large landfill aeration projects and 3) optimised landfill gas capture (German Government, 2019). The government wants to develop a National Circular Economy Strategy and adapt the current legislative framework for waste management (Federal Ministry of Economics and Climate Protection, 2022a).

In the Federal Environment Agency’s projections, the waste sector almost achieves its target in 2030. It should be noted however that the report seems to work with a different historical dataset than the last inventory data, which varies substantially at least for the base year of the projections 2019. In the projections report, the value for 2019 is about twice as much as in the inventory data.