Germany has a government again—one with ambitions to revive Europe’s biggest economy and transform the country’s security profile so that it is less dependent on the United States. Faced with these two urgent priorities, the question is: what will happen to Germany’s climate ambitions?
Timing matters in politics. When Vladimir Putin’s Russia invaded Ukraine in February 2022, Robert Habeck, Germany’s most prominent Green politician, had been vice chancellor and federal minister for economic affairs and climate action for just three months. He had been elected on an ambitious green agenda that the 2020 voters had strongly endorsed. But Putin’s invasion threw Germany into crisis as its supply of cheap Russian gas, one of the foundations of its postwar economic and industrial success, was abruptly terminated. Habeck led the successful year-long effort to end Germany’s dependency on Russia.
Germany would no longer be blackmailed but Habeck paid the political cost in February’s elections. The Greens were less popular and the voters more critical of the ambitious climate transition plans that they had overwhelmingly endorsed five years earlier. Green representation in parliament dropped from 118 to 85 and neither Habeck nor his party are in the new governing coalition. Germany’s climate transition lost its most senior political champion.
There is concern in both Berlin and Brussels that the political shift to the right is also eroding the momentum for climate action. Habeck himself is leaving politics. The championship of the green cause in the German parliament will fall to Franziska Brantner, the formidable co-leader of the party. But across Europe, as in the UK, right-wing nationalist parties that for the most part dismiss climate action as either unnecessary or too expensive are gaining ground.
In Germany, the hard-right, pro-Russia Alternative for Germany (AfD), which denies that climate change is a problem at all, is now the second-biggest party in the Bundestag, only excluded from participation in government by the refusal of other parties to work with it. The far right also made gains in the elections to the European parliament last June, which were marked by farmers’ protests and cost of living anxieties that the far right blamed on climate policies.
In Spain, one of the EU countries most affected by climate change, the far-right Vox party refers to the European Green Deal—the EU’s framework policy on climate change that aims to revive Europe’s lost leadership in climate technologies—as “climate fanaticism at the expense of European farmers and ranchers”.
Nationalist parties did not win a majority in the EU parliament, but they gained enough strength to be able to slow or obstruct any more ambitious climate legislation. As the climate crisis grows more urgent, they may use their increased strength to slow progress towards net zero, the critical mid-century goal of the 2015 Paris climate agreement. As Europe’s most important industrial economy, the choices that Germany makes, with its new chancellor Friedrich Merz, will be critical to Europe achieving its climate ambitions.
For most of his career Merz appeared to accept three uncontested truths: that strict control of spending was necessary to avoid inflation; that Germany would never choose to be a military power; and that the transatlantic alliance was the bedrock of German security. Even before he had finished negotiating the terms of his new governing coalition, he had been obliged to abandon all three.
After US vice president JD Vance’s speech at the Munich security conference in February and Elon Musk’s open support of the AfD, Merz, a lifelong Atlanticist, declared that his “absolute priority” would be “to strengthen Europe as quickly as possible so that, step by step, we can really achieve independence from the USA”.
To make up for years of underinvestment in hard security, as well as to repair Germany’s neglected infrastructure and to provide a much-needed economic stimulus to an economy officially in recession, Merz would have to lift the so-called debt brake that limited new federal borrowing to 0.35 per cent of GDP.
This required a constitutional change, but the proposed coalition of Merz’s Christian democrats (CDU-CSU) and Scholz’s outgoing social democratic party (SDP) would be short of the necessary two-thirds majority in the new parliament. Merz’s only option was to pass the constitutional changes under the outgoing parliament, calling on Habeck’s Green party for support.
Habeck had lost his place in government, but as he prepared to exit, the serendipity of politics and timing offered him a last chance to set Germany’s climate course.
On 18th March, as clean energy entrepreneurs, foreign dignitaries, green technology leaders and civil society groups gathered in Berlin for an annual government-led event on the energy transition, news broke that the lifting of the debt brake had passed in the Bundestag. Three days later, it passed the upper house with a comfortable two-thirds majority.
With the freshly announced €500bn infrastructure investment fund, the largest such programme in German history, Merz’s government would aim to make trains run on time again, fix motorway potholes and transform Germany’s defence posture. The price of Green support for this potentially transformative programme was that €100bn of the investment would go through Germany’s Climate and Transformation Fund and be earmarked for spending on climate.
Net zero is blamed for everything from high electricity prices to blighted landscapes;
Speaking at the energy event in Berlin, Habeck refocused the climate narrative to fit the new challenges facing Germany and Europe. The energy transition that began as a response to the climate emergency became an essential building block of national security—the security of a domestic energy supply that was independent of the whims of foreign dictators or an unpredictable international market. It was a vision of energy security that could only be achieved by continuing to accelerate the energy transition. Net zero had become the newest recruit to Germany’s rapidly changing defence posture, a set of climate transition measures now thinly coated with military camouflage.
Net zero has become a favourite target for right-wing politicians across Europe. It is blamed for everything from high electricity prices to blighted landscapes; in the UK, Conservative leader Kemi Badenoch makes unsupported claims that net zero is unattainable and the attempt to reach it would risk bankrupting British industry; Reform UK’s Nigel Farage has called net zero the “next Brexit”; Poland’s Jaroslaw Kaczynski, leader of the Law and Justice (PiS) party, complains that it would be bad for jobs in the coal and steel industries. Even former British prime minister Tony Blair, once an advocate of champion of climate action, has described the UK’s net zero policies as “doomed to fail.”
The propaganda is having some effect. Opinion polling in Germany confirms that while the public still support climate action in principle, cost of living and other issues are deemed more urgent. In response, climate advocates are also shifting the argument, attaching climate change to voters’ current preoccupations. They seem to understand that it is not currently enough to argue that climate threatens the survival of life on the planet. As short-term national priorities shift, climate must be repeatedly repositioned if it is to retain momentum.
A month after the Berlin meeting, the International Energy Agency (IEA) and the UK government hosted a two-day energy security summit in Lancaster House, a Foreign Office-run mansion on the Mall in London. In his speech, the UK secretary of state for energy and climate change, Ed Miliband, framed net zero as central to prosperity and the key to national energy security.
The leader of the European Commission, Ursula von der Leyen, also delivered a robust keynote, but in Brussels her reputation as a climate champion is less certain than it was. Net zero is under attack in the new European parliament, which now contains a stronger representation of far-right parties. The CDU-CSU leadership, to which von der Leyen belongs, is also suspected of slackening momentum on several climate proposals. It is not yet a U-turn, but it could signal a loss of momentum.
On 30th April Merz’s coalition partner, the SDP, resoundingly approved Germany’s new and painstakingly negotiated coalition agreement. The party’s co-leader, Lars Klingbeil, has taken the roles of vice chancellor and finance minister, while social democrat Carsten Schneider has been appointed climate minister. The economy and energy portfolio is led by Katherina Reiche, a CDU politician with ties to the industry and a record of lobbying on its behalf, according to critics.
The prospective coalition government has pledged to continue Germany’s climate policies and stick to the current climate targets, although its agreement focused more on economic competitiveness than climate action. The federal government will also have to contend with the complication that climate policy is often executed by local governments, and the climate sceptic AfD came to power in the eastern state of Thuringia in September 2024, the first far-right party to win a state election in Germany since the Nazi era. It also came a close second in the state of Saxony and threatens to upset Germany’s national consensus on climate.
The €100bn climate allocation from the special fund for infrastructure and climate neutrality offers stability for prospective investors and the new coalition’s climate credentials will be reinforced if it fulfils a proposal to write the target of reaching climate neutrality by 2045 into the constitution.
Inevitably, there is already an argument about how the money might be repaid, with the right arguing for welfare cuts and the left, including the Greens, advocating taxing the super-rich.
The cost of renewable energy has come down dramatically, largely because China’s leaders were convinced early that green technologies could guarantee their country’s future prosperity
At stake in the German green stimulus is the proposition that future prosperity is green. Hitherto the economic case for climate action has largely been that avoiding the catastrophic impacts of unchecked climate change is good for the economy. The 2005 Stern Review, commissioned by Tony Blair when he was UK prime minister, argued that the cost of mitigation could be between 1 and 2 per cent of global GDP annually, whereas the costs of inaction would be at least an annual 5 per cent of global GDP and potentially up to 20 per cent.
Since then, the cost of renewable energy has come down dramatically, largely because China’s leaders were convinced early that green technologies could guarantee their country’s future prosperity. From 2012 onwards it invested heavily in the technologies of energy transition and now enjoys a substantial advantage in the production of everything from electric vehicles, solar panels and the permanent magnets that go into wind turbines to rare earth refining. Its capacity to manufacture efficiently and at scale has brought down the cost of renewable energy to below that of fossil fuels.
But China’s dominance has also created a new economic and security conundrum. Ideally climate action needs to be cheap, rapid and safe but analysts argue that China’s dominant position means only two out of three targets are possible. Net zero can be achieved rapidly and cheaply only by using large amounts of imported Chinese technology. That, critics say, risks creating a dangerous dependency on a potential hostile power, as well as contributing to the decline of any domestic green industries that might have survived thus far. To achieve targets rapidly and without Chinese technology would require much larger investment. To get there cheaply and safely, without creating dependency on China, could take more time than humanity can afford.
These debates are symptoms of geopolitical tension between the US and China and, increasingly, between the Trump administration and Europe, as the US aggressively reneges on its climate commitments for the second time. The Trump administration is fuelling opposition to net zero through its support for right-wing activism and so-called astro-turf thinktanks in the UK and the EU that work to create fear and suspicion around the energy transition.
At the Lancaster House summit, the Trump administration’s representative was a relatively junior acting assistant secretary of energy called Tommy Joyce. His speech, read from a prepared text, was greeted with silence. In it, he attacked Joe Biden and complained that net zero policies were harmful and dangerous, not least because relying on China for the rare earth minerals used in wind turbine components was a security risk.
While Joyce was spared any applause, the reference to dependence on China does echo concerns both in the UK and Europe. Chinese premier Xi Jinping’s visits to Moscow, public assertions of “unlimited friendship” with Putin, and the diplomatic, economic and material support Beijing has given the Kremlin since the 2022 invasion of Ukraine continue to generate tensions with Europe.
Germany’s declining car industry, once a key driver of closer relations with China, now faces overwhelming competition from cheaper Chinese EVs, both in Europe and in third markets. What is left of Europe’s offshore wind industry could also be undercut by Chinese competition without active public procurement policies to support it.
Both industries will be central to the new government’s security discussion. Renewable energy systems create security concerns that are radically different from those of fossil fuel dependent ones. In the latter, energy security depends on steady supply of oil, gas or coal at an affordable price. In a renewable system, once solar and wind generation equipment is up and running, nature supplies the input. But both electric vehicles and wind turbines remain digitally connected and under the control of their manufacturer or operator—EVs to receive software updates, wind turbines because they need to be actively managed in shifting weather condition.
Both sectors present new and unanswered security challenges: wind turbines collect data on the functioning of the critical infrastructure of the grid and can potentially be destroyed remotely, while EVs monitor their surroundings and occupants and can be controlled remotely. Either could be misused in moments of tension or as part of grayzone warfare.
These are not insuperable challenges. China, whose internal policies could be copied, does not allow data from Tesla cars to leave the country and imposes restrictions on where in China they can be driven. It is also possible to envisage buying hardware for wind turbine blades from China while insisting that the electronics be produced in Europe.
The new German governing coalition has only just taken office, and its plans are still being developed. We do know, however, that they include a continuing commitment to existing climate targets achieved substantially through the rollout of renewables, hydropower, geothermal energy and energy storage technologies, along with modernisation of Germany’s creaking grid. Support for industrial decarbonisation, including the steel sector, is expected, as are policies to keep strategically important industries in Germany and to attract new ones, including the semiconductor industry, battery production, hydrogen and pharmaceuticals. A promise to reduce electricity tax and a potential offer of support to high energy industries that have no alternative sources of supply nod to concerns about high electricity prices.
Climate diplomacy, which had been devolved to the foreign ministry, and climate action, which had been elevated to the economy ministry under the previous coalition, are both to return to the environment ministry. Some fear this signals a downgrading of importance for climate.
The draft strategy also nods to some yet-to-be realised technologies, such as direct air capture and nuclear fusion, announcing the government’s ambition to build the world’s first fusion plant in Germany. The targets for electrifying the car fleet remain, despite pressure from Germany’s traditional car industries.
Germany aims to create momentum for the EU’s Green Deal by leading the development of European green technology. But on the day Germany’s last coalition collapsed Donald Trump was elected to his second term. While Europe’s biggest economy has been preoccupied with its own elections and coalition forming, the transatlantic relationship has all but collapsed, and the White House is pursuing a set of anti-climate policies, closing down US climate science and trying to set the country on a high-emitting, fossil dependent track.
Closer to home, there is resistance to the nascent climate plans from some of Merz’s own political allies on the right, who continue to oppose EU plans to ban the sale of new internal combustion cars in 2035. Meanwhile, green activists are worried that the new coalition will permit offsetting outside Germany as part of the emissions reduction plan, rather than forcing reductions at home.
Will Merz’s ambition and commitment to tackling climate change be robust enough to help Germany and the EU maintain its momentum?
