Revised Climate Change Act sets out binding trajectory towards climate neutrality by 2045

Germany is to become climate neutral by 2045 and has outlined a path to achieve this with binding targets for the 2020s and 2030s. This is at the heart of the revised Climate Change Act, which the federal cabinet adopted today as recommended by Federal Environment Minister Svenja Schulze. Up to now, the German government had been striving for climate neutrality by 2050. The interim target for 2030, currently 55 percent, is being increased to a 65 percent greenhouse gas reduction compared to 1990. A new interim reduction target of 88 percent has been set for 2040. Climate action efforts up to 2045 will thus be more appropriately distributed across the current and future generations. The Federal Constitutional Court called on the German government at the end of April to do this. According to an accompanying decision of the federal cabinet today, the German government will, in the coming weeks, also lay the groundwork for the new target with an immediate action programme.

Federal Environment Minister Schulze commented: "With this Act, we are creating more intergenerational equity, greater planning certainty and resolute climate action that does not stifle industry, but instead restructures and modernises it. I am not talking here about increasing climate targets, for me this is about defusing the climate crisis. The Climate Change Act sets the framework for the coming years and decades and presents us all with a major task. It is not about maths, but about the way we want to live our lives in future, how we want to produce goods, generate heat and travel. This affects many policy areas. In future, all ministries will have to be climate ministries more than ever before. My Climate Change Act guarantees that the government will no longer slacken in its climate action efforts and that we will reliably achieve all targets."

The Climate Change Act has retained the system of year-specific permissible emission levels for the individual sectors for this decade, with these levels significantly reduced. The majority of the additional reductions up to 2030 will be taken on by the energy sector and industry. While this follows the economic approach to reduce where avoidance costs are lowest, the energy and industry sectors continue to be the sectors with the highest emissions. What’s more, a renewable energy supply is the key to emissions reductions in all other sectors where a renewable power supply can replace fossil fuels.

The new German 2030 climate target also takes account of the new, higher EU climate target for 2030, which all member states agreed on at the end of 2020 during Germany’s Council Presidency. After the Federal Constitutional Court ruling almost two weeks ago, the German government decided not to wait for the implementation of the EU agreements, but to anticipate them and make adjustments later if necessary. The advantage of this is that no time is lost in the fight against climate change.

The Act also envisages concrete reduction targets for each year for the period from 2030 to 2040. How these will be divided across the different sectors will be decided in 2024 when important foundations are laid at European level for the future climate architecture.

The goal to preserve and expand natural sinks such as forests and peatlands is also new. These sinks are necessary to offset unavoidable remaining greenhouse gas emissions, for instance from livestock farming or certain industrial processes. The sink expansion process requires a lot of time. That is why the German government is already starting to intensify the wetting of peatlands and forest conversion and expansion. After the year 2050, the German government is striving for negative emissions, which means Germany will then sequester more greenhouse gases in natural sinks than it emits. The role of the Council of Experts on Climate Change is also strengthened in the revision of the Climate Change Act. The Council will now submit a report every two years on progress on target achievement and trends.

In addition to the adoption of the new Climate Change Act, the German government also announced a new immediate action programme to support implementation of the new climate targets for the different sectors. Funding of up to 8 billion euros will be provided for this, however with additional requirements. For instance, energy standards for new buildings will be enhanced. In future, the costs of carbon pricing will no longer be borne by tenants alone; half will be paid by landlords. This should improve the impact of carbon pricing, as it is landlords that ultimately decide on energy-saving refurbishments and the type of heating used.