BRUSSELS — Germany’s incoming government is set to support an ambitious EU climate target for 2040, contingent on the European Commission permitting member countries to offset some of their emissions rather than drastically reducing them.
This position was disclosed on Wednesday through a coalition agreement between the center-right Christian Democrats (CDU), who emerged victorious in February’s snap elections, and the center-left Social Democrats (SPD). The SPD’s over 300,000 members must still ratify the 144-page agreement.
Within the agreement, both parties reaffirm their commitment to Germany’s 2045 climate neutrality goal while providing conditional support for the EU executive’s recommended 90 percent emissions reduction target for 2040. However, Brussels has postponed legislation to formalize this new target due to difficulties in garnering sufficient backing from various governments and lawmakers.
Berlin’s backing comes with a significant stipulation: EU nations must be permitted to use international carbon credits to meet their climate obligations. This would enable countries to finance emissions reductions in non-EU nations instead of cutting pollution domestically.
Despite the establishment of some enhanced global governance regulations, the reliability of these credits is highly variable. Critics caution that depending on offsets could hinder essential emissions reductions and unfairly shift responsibility from affluent nations to developing countries.
Recently, POLITICO reported that the European Commission has discussed with lawmakers and governments the inclusion of international credits in the EU-wide climate goal. This disclosure raised considerable concerns among environmentally conscious members of the European Parliament and advocacy groups. Should the German coalition deal be approved, it would lend support from Europe’s largest economy to the inclusion of credits.
Prior to the coalition agreement’s release, Tiemo Wölken, a German SPD MEP, warned that utilizing such credits could “undermine the credibility of our climate policies and unduly shift responsibility onto other nations. This would create significant loopholes rather than facilitating domestic emissions reductions.”
The coalition deal specifies that any credits must be certified and of high quality, must lead to permanent emissions reductions, and should be capped at a maximum of 3 percentage points of the 2040 target.
Furthermore, the coalition’s 90 percent support is conditional on allowing the counting of permanent carbon removals toward the target. The agreement states that Germany’s contribution to the EU-wide target must not exceed its established domestic 2040 goal of 88 percent.
Both carbon removals and international carbon credits are to be integrated into the Emissions Trading System, the EU’s cap-and-trade carbon market, alongside the bloc’s overarching Climate Law, according to the parties involved.
Peter Liese, a prominent CDU MEP, characterized the agreement’s wording as a satisfactory compromise. “If the largest EU member state takes a definitive stance, it will aid in achieving consensus within the EU as well,” he expressed.
Apart from climate targets, the coalition agreement endorses the EU’s forthcoming carbon pricing scheme for fossil fuels utilized in heating and transport by 2027, with commitments to redistribute the proceeds to households and businesses.
The energy policy provisions remain largely unchanged from a March draft, as the new government plans to add 20 gigawatts of gas power plant capacity while advancing the development of renewable energy.
The coalition also expresses a desire to optimize the potential of traditional gas production in Germany.
Nuclear power is notably absent from the document, despite the Christian Democrats’ repeated campaign promises to reinstate Germany’s nuclear energy capabilities.
The contentious new clean heating law, which has faced significant backlash, will be “abolished” and replaced with a revised version, according to the agreement. The law, introduced by the outgoing government, aimed to prohibit fossil fuel usage in heating by 2045 — a move the International Energy Agency recently recognized as a major achievement.
The CDU has pushed to eliminate this law, while the SPD — which played a role in its passage as part of the outgoing government — sought only targeted revisions, as indicated in March’s draft document.
CORRECTION: The article was updated to clarify the coalition’s plans regarding the clean heating law. It will be abolished.
