On Friday, 20 September, the Climate Cabinet agreed on the guidelines for German climate policy for the coming decade. The core topic was additional CO2-pricing in the mobility and heating sectors. In the following three blogposts we analyse the climate protection programme 2030. This first bogpost deals with the reduction targets, the structure and the general measures of the climate package. In two following blogposts we will examine the programme in detail.

Energy sector disappointed

First of all: The climate protection programme 2030 is a disappointment. In terms of both energy and climate policy, the Climate Cabinet has adopted an unambitious set of measures that hardly any player in the energy sector would consider a success (source: Energate). The climate package is not sufficient to claim effectiveness for climate protection and postpones a number of important decisions once again.

Greenpeace Energy sees the resolutions of the climate package as a “wind power prevention programme”, while the Federal Association of the New Energy Industry sees the programme as a “discouraging conglomerate”. BDEW was also “disappointed” by the overall package and “the government´s program is anything but a big success” (source: PV Magazine).

In any case, the Green party have already announced their intention to tighten up the climate package via the Federal Council. According to Federal Chairman Annalena Baerbock, the party wants to examine the draft laws that are to implement the climate package carefully in order to “get more output for climate protection of the little the package has to offer” (source: SZ).

Germany’s reduction targets within the European framework

In order to better assess the climate package and its measures, it is necessary to keep the European framework and the German CO2-reduction targets in mind. By the year 2030, Europe wants to reduce greenhouse gas emissions by at least 40 per cent compared to 1990 and aims to achieve greenhouse gas neutrality by the middle of the century. The European reduction targets by 2030 result in corresponding national targets. The European Emissions Trading Scheme (EU ETS) is intended to reduce emissions by 43 per cent by 2030 compared to 2005 for major emitters from industry and the energy sector, as well as from EU-wide air traffic.

For non-ETS sectors, i.e. transport, buildings, small industry and agriculture, the responsibility for reducing greenhouse gases lies with the EU member states. Defined annual budgets for CO2-emissions must, however, be adhered to within the framework of the EU Climate Protection Regulation. Otherwise, the state that fails to meet its targets must acquire CO2-pollution rights from other member states. Germany’s emission target in the non-ETS area is a 38 per cent reduction in 2030 compared to 2005.

The national targets

In the Climate Action Plan 2050, the German government has set national reduction target of 40 per cent by 2020 and 55 per cent by 2030 compared to 1990. In the individual sectors, the reduction targets by 2030 range from 31 per cent in agriculture to 67 per cent in the buildings sector. Figure 1 shows the reduction targets under the Climate Action Plan 2050, which were also used for the Climate Protection Package 2030 (source: Federal Environment Agency).

Figure 1: Germany's reduction targets by 2030 according to the Climate Action Plan 2050 (Source: Federal Environment Agency)

Figure 1: Germany’s reduction targets by 2030 according to the Climate Action Plan 2050 (Source: Federal Environment Agency)

For the year 2020, Germany will probably achieve a reduction in emissions of only 30 to 35 percent compared to 1990 and will miss its self-imposed target of 40 percent (source: BMU). Figure 2 shows the development of German CO2-emissions since 1990 and the national targets for the most important sectors up to 2030 according to the Climate Action Plan 2050 on a percentage basis.

Figure 2: German CO2-reductions since 1990 and targets by 2030 in per cent (source: Energy Brainpool)

Figure 2: German CO2-reductions since 1990 and targets by 2030 in per cent (source: Energy Brainpool)

Between 2005 and 2018, greenhouse gas emissions in Germany fell in the energy and buildings sectors, while they stagnated or even increased in the industrial and transport sectors. In all four sectors, however, a higher percentage reduction in emissions between now and 2030 is needed pronounced than has materialised since 2005. This poses a challenge that should not be underestimated, as the simplest and cheapest emission reduction potentials have already been exploited in many cases.

The elements of the climate package

The climate protection programme consists of a broad package of measures. It includes legal standards and requirements, as well as innovations and subsidies, and additional pricing of greenhouse gas emissions. The four elements on the basis of which CO2-reductions are to be achieved are promotion programmes, pricing of CO2, financial relief for citizens, and regulatory measures.

Existing support and incentive programmes, which are to be expanded, are intended to make CO2-reductions practically feasible. According to the Federal Government, this should be equivalent to start-up financing which enables CO2-reduction in an economically and socially acceptable way. CO2-pricing will not generate any additional revenue for the state. All revenues are to be reinvested in climate protection measures or should financially relieve the citizens. The financial benefits for citizens and the industry is to be achieved by reducing the costs for electricity, raising the commuter allowance, relieving weak tenants, a replacement premium for old oil and gas heating systems and promoting energy-saving renovation measures (source: Federal Government).

Medium-term measures (2020 to 2023) of the climate package 2030 are to be anchored in the 2020 economic plan of the Energy and Climate Fund and in the federal budget. The Energy and Climate Fund thus remains the central financing instrument for energy system transformation and climate protection in Germany. By 2030, funds in the three-digit billion range are to flow towards measures for climate protection and energy system transformation. Until 2023 the estimated expenditures into climate protection will be more than EUR 54 bl. (source: finanzen).

Implementation and monitoring of the climate protection programme

According to the climate package, the emission reduction targets from the 2050 climate action plan (see Figures 1 and 2) are to be laid down by law for all sectors in annual granularity. Progress towards the climate targets for 2030 as a whole, but above all in the individual sectors, can thus be determined on an annual basis. An external advisory board of experts is to accompany this process.

The Cabinet Committee on Climate Protection, i.e. the “Climate Cabinet”, is to be given an unlimited term of office and has the task to review the effectiveness and progress of the measures initiated on an annual basis. If a sector fails to achieve the legally prescribed targets, the responsible minister is to submit an immediate programme for follow-up within three months. Then Climate Cabinet will have to adapt the climate protection programme accordingly and also has the task of reviewing the annual sector budgets for necessary adjustments. The legal measures of the climate package are still to be passed by the Federal Cabinet in 2019.

The Climate Protection Package 2030 institutionalises climate protection within the government and takes the goals of the Climate Action Plan 2050 as a basis for the emission reductions of the sectors. This is to be seen in a positive light for the time being. Are the proposed measures sufficient to achieve this and can they stimulate the necessary CO2 savings? We will examine this question in the next two blogposts.

The second article of the analysis:
“The German Climate Protection Programme 2030 (II): CO2-price and the energy sector”
The third article of the analysis:
“The German Climate Protection Programme 2030 (III): CO2-price and the energy sector“