Germany’s New Government Had Big Plans on Climate, Then Russia Invaded Ukraine. What Happens Now?

A new chancellor and his coalition want to enact major clean energy legislation at the same time that the war has scrambled the geopolitics of energy.

Chancellor Olaf Scholz speaks in a general debate in a plenary session in the Bundestag. Credit: Kay Nietfeld/picture alliance via Getty Images

Chancellor Olav Scholz speaks in a general debate in a plenary session in the Bundestag. Credit: Kay Nietfeld/picture alliance via Getty Images

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Vladimir Putin’s invasion of Ukraine has made Germany’s reliance on Russian oil and gas untenable, and led the center-left government of Chancellor Olav Scholz to accelerate the transition to clean energy.

This is more than just talk. German leaders are in the early stages of showing the world what an aggressive climate policy looks like in a crisis. Scholz and his cabinet will introduce legislation to require nearly 100 percent renewable electricity by 2035, which would help to meet the existing goal of getting to net-zero emissions by 2045.

“Our goal of achieving climate neutrality in Germany by 2045 is more important than ever,” Scholz said this week in an address to parliament.

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Germany’s strategy is in contrast to the United States, where the Biden administration, also elected with ambitious climate plans, has seen that part of its agenda almost completely stalled.

The difference is that Germany—and much of the rest of Europe—have a head start on the United States in making a transition to clean energy, said Nikos Tsafos of the Energy Security and Climate Change Program at the Center for Strategic and International Studies, a Washington-based think tank.

“There is more social and political consensus in favor of decarbonization [in Europe], and the plans and strategies are far more developed,” Tsafos said in an email. “By contrast, climate legislation remains highly politicized in the United States, and the instinct among many is to merely increase oil and gas production.”

Germany’s actions on climate and clean energy hold special relevance for the United States because both nations have large economies built on heavy industry and plentiful fossil fuels. Germany adopted groundbreaking renewable energy incentives in the 2000s, making it a model for others. It has continued since then with decades of progress, along with a recurring theme of frustration that progress has often not been fast enough.

Scholz and his coalition want to build on this legacy, even as bullets and artillery rounds are flying in Ukraine. 

A Partially Green Coalition

One of the reasons the German government is moving forward on climate legislation is that to do otherwise might end up being a deal-breaker for one of the coalition partners, Alliance 90/The Greens. The party’s election gains have made it part of the government for the first time since it was a partner in the coalition defeated by Angela Merkel in 2005.

The Greens have become essential parts of the country’s leadership. The party’s co-leader, Annalena Baerbock, is the foreign minister and she is doing much of the diplomatic work on the Ukraine crisis. The other Green co-leader, Robert Habeck, is vice chancellor and leads the ministry for economic affairs and climate action, an office that had “climate action” added to its name with this government, and that is leading the push for clean energy legislation.

Foreign Minister Annalena Baerbock speaks with Economy and Climate Protection, Vice Chancellor Robert Habeck as they arrive for the weekly government cabinet meeting on Feb. 9, 2022 in Berlin, Germany. Credit: Michele Tantussi/Getty Images
Foreign Minister Annalena Baerbock speaks with Economy and Climate Protection, Vice Chancellor Robert Habeck as they arrive for the weekly government cabinet meeting on Feb. 9, 2022 in Berlin, Germany. Credit: Michele Tantussi/Getty Images

Another important element is that the Greens, with a tradition of opposing war and being skeptical of defense spending, are settling whatever differences they have over the government’s defense policy behind the scenes. So the German public is seeing a mostly unified front on issues that could be divisive, like Scholz’s announcement in a Feb. 27 speech that the government was proposing to spend 100 billion euros to expand national defense, a shift in emphasis from decades of post-World War II policy.

“They do not fight in front of the cameras,” said Jasmin Riedl, a political science professor at Bundeswehr University Munich.

But Riedl said some tensions were still palpable as Scholz gave his speech. Some members of the Social Democrats, Scholz’s party and the Greens gave one another uncomfortable looks and were reluctant to cheer about military spending, while many of the conservative Christian Democrats, Merkel’s party, erupted in applause.

The most important audience, though, was the German public, and Riedl thinks that Scholz and his coalition passed the test of this moment. Indeed, polling has shown strong public approval.

“He was a chancellor in that moment,” she said.

By rising to the occasion, Scholz was helping to define this early period of his tenure, less than three months after his coalition took office. While he was well-known before, having served as mayor of Hamburg in the 2000s, and rising through the ranks of his party, the public is still figuring out what to think of him as a national leader.

After Scholz’s announcement about military spending, the last major point of his speech was that energy policy is part of national security.

“The faster we make progress with the development of renewable energies, the better,” Scholz said. “And we are on the right track. We are an industrialized country aiming to become carbon-neutral by 2045.”

The 2045 goal was adopted last year under Merkel. What’s changed is how Germany is going to get there, now that it wants to quickly eliminate energy imports from Russia.

And that’s a major challenge, considering that pipelines from Russia provide about one-third of Germany’s gas supply. Some of that gas is used in gas-fired power plants, but most of it is used to heat buildings and as fuel for industrial processes.

Among Scholz’s actions was to deny a license to the recently constructed Nord Stream 2 pipeline that was to be a major conduit for gas from Russia to Germany. Other pipelines from Russia, including Nord Stream 1, remain operational.

Scholz has said Germany will swiftly reduce its use of Russian fossil fuels, but he has resisted calls for an immediate end to the imports, saying this week that such a move “would plunge Germany and the whole of Europe into a profound recession if we were to do this overnight.”

The new climate legislation focuses mostly on the electricity sector and sets a 2035 target for almost completely eliminating fossil fuels from the production of electricity. That will be difficult in a country that generated 43 percent of its electricity from fossil fuels last year, and that is also closing its nuclear power plants, which generated 12 percent of electricity. The fossil-fuel total includes 19 percent for lignite, which is brown coal, 15 percent for natural gas and 9 percent for black coal.

The main points of the 2035 plan were part of the coalition’s agreement as it entered office, and the government was preparing to introduce the legislation before Russia invaded Ukraine.

“What [the Ukraine war] does is speed things up a bit, and breaks down opposition,” said Sascha Müller-Kraenner, director of Deutsche Umwelthilfe, a leading German environmental advocacy group. “It will be much easier to push that through now.”

The war, he said, has demonstrated that the transition to renewable energy is national security policy as much as it’s climate policy.

He and other environmental advocates have long argued this point, and are now seeing it become more widely accepted.

Habeck, the economic affairs and climate minister, released a summary of the legislation in January, noting that Germany needed to redouble its efforts to cut emissions to be on track to meet national goals.

“We are currently a very long way from where we need to be,” he said, in a statement

Germany, like most other heavily industrialized countries, saw an increase in carbon emissions in 2021, as the economy recovered from pandemic lockdowns. Germany also is responding to more stringent European Union climate rules and rising alarm about slow progress on emissions cuts in reports issued by the Intergovernmental Panel on Climate Change.

Habeck said the country needs to triple its rate of emissions reductions, and his ministry is continuing to work on the details of the legislation and will soon introduce it for debate in parliament.

A Nuclear Phaseout 

One technology that is not part of Germany’s plans is nuclear power.

The country is near the end of a phaseout of its nuclear power plants initiated after the Fukushima nuclear disaster in Japan in 2011, and following decades of intense debate over whether nuclear power should continue to be part of Germany’s electricity supply.

At the beginning of the war in Ukraine, some observers, mostly from outside of Germany, suggested that Germany should extend the life of its three remaining nuclear plants to help make up for the loss of Russian natural gas. But this was a non-starter with much of the German public and the country’s political leadership.

The Rise of Renewables

The three nuclear plants produced about 12 percent of the country’s electricity last year, and they are scheduled to close by the end of this year.

Müller-Kraenner said the plants would require substantial upgrades to be able to continue operating, with not much time to do so and costs that could not be justified. And that did not even take into account the political challenges.

This week, when Belgium announced it was extending the life of two nuclear plants, some commentators said Germany should be next. But Steffi Lemke, Germany’s environment minister, quickly dismissed the suggestion.

“In view of safety, economic and legal risks, we rule out extending operations for Germany,” she said on Twitter.

If anything, the Ukraine war has intensified Germany’s concerns about the safety of nuclear power as Ukraine’s nuclear power plants have been caught in the crossfire and Russian troops have stormed the region that includes the site of the 1986 Chernobyl nuclear disaster.

More Coal for the Next Few Years

While the nuclear phaseout continues on schedule, Germany’s coal-fired power plants may be getting a short-term boost.

Germany adopted a plan two years ago to close all coal-fired power plants by 2038. This followed work by a special commission and included compensation for coal regions, coal companies and their workers.

Then last year, the Greens campaigned on a plan to move the coal phaseout up to as soon as 2030, and, as part of the governing coalition, this became a policy goal of the government.

But the loss of fossil fuel imports from Russia has led to suggestions that coal-fired power plants could pick up much of the slack, at least in the short term. Some coal plants that were about to close may stay open for a few more years. Some plants that were available only as emergency backups may be called back into action.

“Coal will play a decisive role in becoming more energy independent,” said Olaf Lies, energy minister of the German state of Lower Saxony, at a March 8 news conference.

Coal-fired power plants emit much more carbon dioxide per unit of electricity than natural gas plants, so a plan to burn more coal, even if it’s a short-term plan, will lead to more emissions.

Müller-Kraenner said he can understand why Germany may need to rely more on coal for the next few years, and he thinks environmental advocates can live with this change as long as the German government is also sticking to its plan to move up the coal phaseout to 2030.

“There is no doubt that in the short term, we will have more coal in the next three or four years,” he said.

A Double Challenge

The loss of Russian natural gas will force Germany to make quick changes to how it gets its electricity, but that is just one sector. The bigger challenges will be finding ways to replace Russian gas for use in heating buildings and in industrial processes.

Germany gets 41 percent of its electricity from renewable sources, but the electricity sector is just one part of the larger energy picture. When looking at the entire economy, including transportation, heating buildings and industry, among other sectors, the share of renewable energy is just 16 percent.

Germany, like many other countries, can see a path for getting the electricity and transportation sectors to shift away from fossil fuels by developing renewable energy sources and encouraging drivers to switch to vehicles that run on electricity or other zero-emissions fuels.

But the path isn’t as clear for reducing the use of fossil fuels in heating and factories. Researchers and policymakers are considering many possibilities, including the mass deployment of heat pumps for homes and businesses, and the use of hydrogen for industrial heat.

“Buildings are probably the hardest sector,” said Tsafos, of the Center for Strategic and International Studies. “That requires a gradual retrofit and retooling of houses and commercial buildings towards heat pumps. That will take time.”

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Before the war began, Germany could continue to meet its needs using imported gas, and had time to figure out how to make a transition. Now it faces the double challenge of meeting its immediate needs for gas while also trying to come up with a plan to reduce or eliminate the use of gas.

German leaders are looking for alternative sources, including from the Middle East. 

Scholz has said part of the solution is to build two import terminals for liquified natural gas, which would be a change from relying on terminals in nearby countries.

The United States, a major exporter of LNG, stands to benefit from this, and U.S. officials have encouraged Germany to increase its use of American gas. Europe is already the leading consumer of LNG from the United States.

“Our current short-term needs [for natural gas] can dovetail with what is already needed long-term for the transformation to succeed,” Scholz said in his Feb. 27 speech. “An LNG terminal that today receives gas can tomorrow be used to import green hydrogen.”

In a chaotic time, when environmentalists are playing key roles in government, the plan for LNG terminals is one of the few proposals in recent weeks that has gotten pushback from some environmental groups.

“Let’s first take a sober look at whether we really need those things,” said Müller-Kraenner. He would prefer using a combination of efficiency measures and imports from neighboring countries to “avoid putting in this new fossil fuel infrastructure.”

The fact that environmental advocates have been mostly pleased with the government’s response to the crisis and the push for clean energy legislation, and that broader opinion surveys show the public feels the same way, indicates that so far, Scholz and his coalition are doing about as well as they could have hoped, even in the face of challenges they didn’t expect.