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As the world enters in a challenging year both for international geopolitics and climate regulations (or de-regulations?), it is interesting to see what time of direction will European leaders take, especially Germany, following the federal election on February 23, 2025. The victory went to the conservative CDU/CSU under Friedrich Merz, who is poised to become the next chancellor.
Since he has no majority, a collaboration with the social party SPD is most likely. How will this political shift influence both Germany's and the European Union's climate policies?
Preliminary election results as of 25th of February 2025
Germany's Climate Policy Outlook:
Economic Prioritization: Merz has emphasized the importance of industrial policy, suggesting that economic considerations may take precedence over aggressive climate measures.
Fossil Phase-out, but not too fast: he has cautioned against a rapid phase-out of coal and gas power generation, advocating for the establishment of alternative capacities before decommissioning existing ones.
Market-based climate protection: CDU/CSU rely on "market-based climate protection", based on technology readiness and competitiveness rather than regulatory burdens and bans. This can be seen as a positive signals for environmental markets such as the use and trading of carbon credits or Renewable Energy Certificates (RECs) as possible "guiding instrument". This is not far from the SPD positions.
Moderate view on the atom: additionally, Merz has criticized the shutdown of Germany's nuclear power plants, labelling it a strategic error. The SPD is against nuclear power. A revival of nuclear power is not in sight, beside the fact that building new ones takes a decade. However it may soften the line Germany has taken over the past decade on the potential future of nuclear energy, and include new technologies in the future energy mix such as smaller modular reactors. Merz supports the expansion of renewable energy sources but emphasizes the need for affordability and security of supply. He has proposed reducing electricity taxes and grid fees to lower energy costs and stimulate investment
Transition path for transportation and Energy Policies: the CDU opposes the EU's proposed ban on combustion engine vehicles, favoring a technology-neutral approach to achieving carbon neutrality. This stance indicates potential support for synthetic fuels and other innovations alongside electric vehicles. Moreover, the party advocates for reducing electricity taxes and promoting renewable energy sources, aiming to balance environmental objectives with economic growth. The latter one is also the SPD position, but they want the combustion engine ban for 2035.
Implications for EU Climate Strategy:
Shift in EU Dynamics: According to their programs CDU and SPD basically are aligned with the European Green Deal. Nonetheless, the new government may lead to a recalibration of the European Green Deal, potentially slowing down the phase-out of fossil fuels and revisiting certain environmental regulations to align with economic interests. This could result in more flexible timelines and moderated climate ambitions within the EU.
In summary, in a CDU/SPD coalition under a chancellor Friedrich Merz, Germany's climate policy is expected to prioritize economic stability and technological openness.
This approach is in the actual broader EU climate strategy since 2024, potentially leading to adjustments in existing commitments and a more balanced consideration of environmental and economic objectives. In principle, there is no doubt about the importance of climate protection for the expected new government in Germany.
