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

Vladmir 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 not just talk. German leaders are beginning to show the world how an aggressive climate policy in times of crisis looks. Scholz and his cabinet will introduce legislation that would require almost 100 percent renewable electricity by 2035. This would allow them to achieve the goal of 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.

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. In the 2000s, Germany set a precedent by adopting innovative renewable energy incentives. It has been an ongoing process, with decades of progress and a constant theme of frustration at the slow pace of progress.

Scholz and his alliance want to build on this legacy, even though bullets are flying in Ukraine. 

Partially Green Coalition

The German government is moving forward on climate legislation because doing so could be a deal-breaker to 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.

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.

Riedl stated that tensions were still present as Scholz delivered 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.

Riedl believes Scholz and his coalition have passed the test. The polling has demonstrated strong public approval.

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

Scholz rose to the occasion and helped to define this period of his tenure, just three months after his coalition was elected. While Scholz was a well-known figure in the past, having been mayor of Hamburg in the 2000s and rising through his party’s ranks, the public is still not sure what to make of him now 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.”

Merkel last year adopted the 2045 goal. 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 this gas is used in gas-fired power stations, but the majority of it is used as fuel for industrial processes and heating buildings.

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 are still in operation.

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 is primarily focused on the electricity sector. It also sets a 2035 goal to eliminate all fossil fuels from electricity production. This will be difficult for a country that produced 43 percent of its electricity last year from fossil fuels. It is also closing its nuclear power stations, which only 12 percent of its electricity. The total fossil-fuel figure includes 19% for lignite (which is brown coal), 15 percent for natural gas, and 9 percent to 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 environmentalists have been making this argument for years and now it is more widely accepted.

Habeck, the minister for economic affairs and climate, published a summary of the legislation on January. He noted that Germany must redouble its efforts in order to reduce emissions to meet national goals.

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

Like most industrialized countries, Germany saw an increase of carbon emissions in 2021 as the economy recovered after pandemic lockdowns. Germany is also responding to the more stringent European Union climate rules, and growing alarm about slow progress on reducing emissions in reports released by the Intergovernmental Panel on Climate Change.

Habeck stated that the country must triple its emissions reductions rate. His ministry is still working on details and will soon present the legislation 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.

Some observers from outside Germany suggested that Germany should extend its three remaining nuclear power plants in order to make up the loss of Russian natural gases at the start of the war in Ukraine. But this was a non-starter with much of the German public and the country’s political leadership.

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. This did not take into consideration the political challenges.

Some commentators suggested that Germany should be the next to announce that Belgium was extending two nuclear plants’ lives. 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 in the next few years

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

Two years ago, Germany adopted a plan to close all coal-fired power stations by 2038. This plan was developed by a special commission. It included compensation for coal regions, companies and workers.

The Greens campaigned last year on a plan for coal phaseout as soon as 2030. This became a policy goal of government as part the governing coalition.

However, Russia’s decline in fossil fuel imports has raised concerns that coal-fired plants could fill some of the gap. Some coal plants that were closing might stay open for a few additional years. Some plants that were not available for emergency backups could 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

Germany will have to make changes in its electricity supply to compensate for the loss of Russian natural gas. But that is only one sector. The larger challenge will be to find a way to replace Russian gas in heating buildings and for industrial processes.

Germany gets 41 percent its electricity from renewable sources. However, the electricity sector is only one part of the overall energy picture. The share of renewable energy in the economy is only 16 percent when you include transportation, heating buildings, and industry.

Germany, like many other countries can see a way to get the electricity and transportation sector to shift away fossil fuels. This is possible by developing renewable energy sources, and encouraging drivers to switch vehicles that run on electricity, or other zero-emission fuels.

But the path isn’t as clear for reducing the use of fossil fuels in heating and factories. Researchers and policymakers are looking at many options, including mass deployment of heat pumps in homes and businesses and the use 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.”

Germany was able to import gas to meet its immediate needs before the war started. It had enough time to plan for a transition. It now has to meet its immediate gas requirements while also trying to devise a plan for reducing or eliminating gas consumption.

German leaders are looking to find alternative sources of income, including from the Middle East. 

Scholz stated that part of the solution to the problem is to build two import terminals, which would make it possible for liquified gas to be transported from nearby countries.

The United States is a major exporter and importer of LNG. Officials from the United States have encouraged Germany to use more American gas. The United States is already the world’s largest importer of LNG to Europe.

“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.”

The plan for LNG terminals is one of a few proposals that has received support from environmental groups in these chaotic times.

“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.