The status quo and the German government’s goals

Since 1990, Germany has reduced its emissions of greenhouse gases by 35.7 per cent. For 2020, Germany’s target is a 40 per cent reduction. The government’s Climate Action Report 2019 demonstrates that Germany is still about four per cent short of this target – largely as a result of higher emissions in the transport sector and in buildings. However, the report also indicates that we are significantly closer to achieving the climate target for 2020 than had previously been expected. No reliable figures are yet available that would illustrate the impacts of current developments, in particular the COVID-19 pandemic, on climate change mitigation.

The Climate Action Programme 2030 and the Climate Action Act (Klimaschutzgesetz) should ensure that we achieve the climate targets in 2030. At the heart of the programme is a new CO2 pricing scheme for the transport sector and for heating buildings. We are thus making it more expensive to emit carbon dioxide in these sectors. We are fostering the use of renewables, energy-saving buildings, and alternative engine technology in the transport sector.

We intend

• To reduce greenhouse gas emissions by 55 per cent by 2030
• To phase out the use of coal to generate electric power
• To restructure our mobility.

In future, we will conduct a fully transparent annual review to monitor compliance with our climate targets. This is laid out in the Climate Action Act (Klimaschutzgesetz). Every sector will be required to do its bit. The CO2 balances will be reviewed annually, and swift corrective action taken if we should deviate from the intended course.

This is what we have achieved to date

Climate policy

• On 20 September 2019, the Chancellor and the members of the Climate Cabinet set out the cornerstones of the Climate Action Programme 2030. The detailed Climate Action Programme 2030 was adopted on 9 October 2019 by the full Cabinet.
• Under the provisions of the world’s first Climate Action Act (Klimaschutzgesetz) we undertake to achieve our climate targets. The annual CO2 reduction targets and emissions for all sectors are laid down in the legislation. They will be monitored annually so that corrective action can be taken if necessary. 
• CO2 pricing for fossil fuels: Companies trading in heating oil, gas, petrol or diesel will be required to pay a CO2 price in Germany as of January 2021. This will rise from an initial price of 25 euros per tonne of CO2 to 55 euros per tonne in 2025. In 2026 prices are to be between 55 and 65 euros. The additional revenue will be re-invested in climate action measures and returned to citizens to offset higher costs.
• In its climate action, Germany is phasing out the use of coal to generate electricity, and putting its faith in renewables – this move to put Germany’s energy mix on a more sustainable footing is known as the energy shift or energy transition. In 2019, about 43 per cent of electric power was generated from renewable sources including wind and solar power – thanks to the wide range of state assistance available. The electricity grids are being developed to ensure that green power can be used nationwide. By 2030, renewables are to account for 65 per cent of gross electricity consumption. Before 2050 all electricity generation and consumptions is to be greenhouse-gas-neutral.
  Wind power is the most important renewable energy source by a long way. In 2019 wind power already accounted for just over 50 per cent of the gross electricity generated from renewables. To lend more impetus to efforts to bring about the energy transition, the installed capacity of offshore wind farms is to be raised to 20 Gigawatt (GW) by 2030 under the provisions of the Offshore Wind Power Act (Windenergie-auf-See-Gesetz). The Federal Minister for Economic Affairs and Energy presented a concrete work plan in September 2019 to further develop onshore wind capacity. The Building Energy Act (Gebäudeenergiegesetz) gives the individual federal states more planning leeway when designating areas to be used to develop onshore wind plants. And the cap on expanding solar plants has also been lifted.
• With our Hydrogen Strategy for Germany, we want to ensure that green hydrogen becomes marketable swiftly, in order to provide an alternative sustainable source of power that can be used by the steel industry, for instance, or in air traffic.

• Since January 2020, more assistance has been available for energy-efficient construction and restoration. Home owners receive a payment for replacing old oil central heating. The redemption allowance for energy-efficient restoration and construction has been raised by ten percentage points. KfW is extending higher loans for the purchase, restoration or construction of energy-efficient buildings. Tax breaks are available to reward measures undertaken to enhance the energy efficiency of owner-occupied properties.

• The Federal Environment Ministry has been promoting climate action projects across Germany for more than ten years through the National Climate Initiative (NKI). Local authorities and the federal government are thus helping ensure that the energy transition is successful. The federal government has invested almost one billion euros in 28,750 projects, and with this sum has leveraged three times as much in overall investment in climate action – a total of 2.9 billion euros.

Phasing out the use of coal in electricity generation

• Germany is gradually to phase out the use of coal to generate electricity by 2038. Parallel to this, the federal government is supporting the affected regions, helping them with structural change. The legislative package that underlies this change came into effect on 14 August 2020.
• The procedures to be adopted when decommissioning power plants and paying compensation to operators are laid out in the Coal Phase-out Act (Kohleausstiegsgesetz). A new programme to promote greenhouse-gas-neutral heat generation has been launched parallel to the legislation.
• Under the provisions of the Structural Development Act (Strukturstärkungsgesetz), the federal government has earmarked up to 40 billion euros to support the affected regions, enabling them to move towards a more sustainable economy with higher quality employment as coal is phased out. The federal government has provided for up to 14 billion euros for particularly significant investments. Other affected and structurally weak locations can also receive assistance, with a total of one billion euros available. In addition, we will be supporting measures in coal mining areas.

Restructuring mobility

• The German government is supporting the introduction of electric mobility, promoting alternative engine technologies and expanding local public transport and rail transport.
• At the start of 2020 we reduced value added tax on long-distance rail travel, and increased the levy on air tickets.
• We extended the environmental bonus on the purchase of electric vehicles until 2025 and increased the sum. The percentage covered by federal government will in fact double for all applications lodged before the end of 2021.
• Under the November 2019 Master Plan for Charging Infrastructure we intend to forge ahead with electric mobility. By 2030 a nationwide, user-friendly charging infrastructure is to be installed for up to ten million electric vehicles. We have put in place the legal framework for developing privately owned charging structure.
• We are working to ensure that electric vehicle manufacturers can produce their vehicles on attractive terms. That is why we are working to have battery cells manufactured in Germany.
• Under the Immediate Action Programme for Clean Air 2017-2020 and other measures, the government is providing around 2 billion euros to towns and cities affected by air pollution. This support is being used to step up the electrification of transport, digitalise local transport systems and retrofit diesel buses used in local public transport. The measures are working. Air quality in the towns and cities has improved significantly.

And this is what we will do next

Climate policy

• We intend to cut national greenhouse gas emissions by 55 per cent of the 1990 levels by 2030. To this end, we have drawn up our Climate Action Programme. The Climate Action Act obliges us to comply with emission reduction targets in the individual sectors.
• In early 2021 the first review under the Climate Action Act will take place. The annual review mechanism is an integral part of the law, because we have to be able to take corrective action swiftly, if the annual CO2 reduction target is missed in one sector.
• Basically, we pursue the goal of Germany and Europe becoming climate neutral by 2050. Europe wants to act as a trailblazer in the field of climate action. The European Commission’s European Green Deal is an important guideline. We are supporting the Commission in its work on a European Climate Law that is to make the goal of climate neutrality by 2050 legally binding. Climate action is an issue that will shape our future and is one of the priorities of Germany’s Presidency of the Council of the European Union. Our economic stimulus and future package to address the consequences of the COVID-19 pandemic is also linked to investment in climate action.

 Restructuring mobility

• Investing in railways and local public transport: 
  By 2030, the federal government and the railway operator Deutsche Bahn are to invest 86 billion euros in modernising the rail network. This will also benefit goods transport. We have put in place the legal framework to accelerate planning and approval procedures for developing the rail network.
  With respect to extending local public transport systems, we are raising the proportion covered by federal government, and as of 2025 we will be doubling it to two billion euros a year – an important contribution to climate change mitigation, clean air and a better quality of life in our towns and cities.