Germany pressures industry to clean up carbon

Chastened by its highest court and harried by young climate activists, the German government has proposed one of the biggest restructurings of any major economy as it plans to slash emissions 65% from 1990 levels by the end of the decade and hit climate neutrality by 2045.

Nine years from now, the country's energy sector should emit about 60% less than what is allowed today, according to an update to its climate law approved by the cabinet Wednesday. Greenhouse gas emissions from industry would have to fall by a third and emissions from buildings and transport by 43%. The law comes two weeks after the Constitutional Court ruled a previous version was "partly unconstitutional" because it placed too great a burden on future generations to cut emissions.

The law spells major changes in nearly every sector of the export-reliant nation. The steeper cuts will still not be enough to meet the country's obligations under the Paris Agreement on Climate Change, according to environmental research organization Climate Action Tracker. But they will effectively end the burning of coal this decade and require millions more electric cars on the roads and heat pumps in buildings than previously planned.

"For the first time, the most strenuous part of climate protection is not being postponed to the distant future," said German environment minister Svenja Schulze, describing the new law as a "gigantic" task. "The Constitutional Court ordered us to do this and the government reacted very quickly."

Climate neutral by 2045

Analysts say the changes are challenging but achievable.

While the new law does not specify how Germany should achieve the cuts, a report published Friday by environmental think tank Agora Energiewende found that emissions could be brought to net zero by 2045 through a range of technical solutions. It puts forward cuts for each sector that broadly match up with those given for 2030 in the new law. 

The report identifies several key actions that Germany could take. The country would need to get two-thirds of its energy from renewable sources by the end of the decade, invest in hydrogen to replace fossil gas, renovate buildings and install heat pumps faster, and stop making cars with internal combustion engines from 2032. Germany would also need to suck pollution out of industrial sites and store it in the ground. The report estimates that 73 million tons of CO2 will need to be removed through carbon-capture technology by 2045, up from zero today.

The foundation of all these actions is building more renewables, said Agora Energiewende's director of industry Frank Peter, who worked on the analysis with two other German think tanks, the Climate Neutrality Foundation and Agora Verkehrswende. "That's where this current government must immediately do their homework."

Export nation

Last month, leaders of several polluting economies backed up their mid-century climate goals with plans to cut emissions in the medium term too. The UK said it will cut emissions 78% from 1990 levels by 2035. The US pledged to halve emissions from 2005 levels by 2030. Japan and Canada announced cuts of just over 40% for the same date relative to 2013 and 2005 levels respectively.

But Germany, more than most other historical polluters, must redesign an economy built upon the manufacture and export of goods made with fossil fuels or designed to burn them.

The government is neither keeping to planetary boundaries nor explaining how its goals can be achieved in a socially just way, said Line Niedeggen, a climate activist with the German branch of the Fridays for Future protest movement that took the government to court over the climate law. "A fair restructuring of the economy is possible if it's communicated clearly and honestly."

Criticizing the ruling of the Constitutional Court, German daily newspaper Die Welt said the new climate law would lead to "the end of Germany as an export nation." Jörg Hofmann, the head of the country's biggest workers' union IG Metall, said in an interview with the Frankfurter Allgemeine Zeitung newspaper Friday that "climate protection only threatens jobs if we go about it the wrong way." He warned against companies using the transition as an excuse to outsource factories abroad and called for early policies to support struggling companies.

Siegfried Russwurm, President of the Federation of German Industries, called for policy makers to work with businesses to build a climate-neutral industrial country. "Companies are deciding today on the production facilities of 2040. So they need to know now which energy sources they can use to operate their plants then."

The German government is planning to help its industries transition with support of up to €8 billion that will be discussed in the next weeks.

Cleaning up cars 

Germany's transport emissions have stayed stubbornly high even as other sectors have cleaned up. In 2019 they were at the same level as in 1990, dropping only in 2020 as coronavirus lockdowns slowed travel."It will require a drastic change of trend," said Giulio Mattioli, a transport researcher at the Technical University of Dortmund.

The average vehicle in Germany's fleet is 9.6 years old, which means that a car sold today will likely still be on the road by the end of the decade. Germany also has just 42,000 charging stations for electric vehicles, according to the regulatory body for gas and electricity markets, the Federal Network Agency. To add 14 million more electric cars by 2030, it would need to massively expand its infrastructure to charge them. There are currently fewer than half a million electric vehicles in Germany's fleet of 60 million.

A spokesperson for German carmaker Volkswagen said that meeting the 2030 targets would depend on the expansion of charging stations, improvements to the electricity grid and subsidies for electric vehicles. A significantly higher minimum CO2 price would be "an important, if not decisive, instrument for climate protection."

As well as phasing out cars with internal combustion engines, said Mattioli, the government will find it "increasingly difficult" to dismiss measures like a generalized motorway speed limit that would help cut emissions. "This is a low-hanging fruit."

Cutting out coal

The push for a socially just transition also applies to coal.

Before the new 2030 target, Germany clung to a 2038 deadline of closing its coal plants that scientists say is incompatible with the Paris Agreement and which lags behind the rest of Europe. 

This means coal communities will have less time to adapt, said Pao-Yu Oei, a professor of sustainable energy transitions at the Europe University of Flensburg.

A study Oei co-authored in the journal Climate Policy in 2020 looked for lessons from Germany's phase-out of hard coal mining in the Ruhr and Saarland regions in which not a single miner was fired. It found that a faster transition would have been cheaper and more efficient because it would have avoided propping up a dying technology, not given coal regions false hope and left more room to directly act to support miners and their families. 

"Their politicians had kept denying the inevitable truth for too long," said Oei.

This article was updated after publication to include a reaction from German carmaker Volkswagen.