Germany’s new ruling coalition aims to phase out coal in nine years

The environment was one of the main topics of the September general election  in Germany. The Social Democrats, Greens and Free Democrats reached a coalition deal and said they would “ideally” stop the use of coal in Europe’s largest economy by 2030, compared to the official 2038 deadline.

Current Vice-Chancellor Olaf Scholz is set to replace Angela Merkel as the head of government in Germany. His Social Democratic Party (SPD) has reached a coalition agreement with Alliance 90/The Greens and the liberal Free Democratic Party (FPD) based on a plan to accelerate the energy transition and reverse environmental damage.

Moreover, the document reveals the three parties aim to switch from Germany’s decades-long social market economy concept to “a socio-environmental market economy.” The overarching goal is to steer the country to a path consistent with limiting global warming to 1.5 degrees Celsius.

One of the most radical moves of the new ruling coalition was to promise to push forward the coal phaseout in Europe’s largest economy from the official 2038 deadline to “ideally” 2030. The parties said they would change the relevant law by the end of next year instead of in 2026, when the revision is due.

Offshore wind has priority

The environment was one of the main topics of the September general election. “Modernisation won’t come for free – we will invest massively so Germany can stay a world leader,” Scholz stressed.

The coalition said the expansion of offshore wind power capacity would have priority and set the targets to at least 30 GW by the end of the decade, 40 GW by 2035 and 70 GW by 2045, when Germany aims to become carbon neutral.

At least 2% of the land area will be declared suitable for wind power plants

The Greens will be in charge of a ministry that would integrate the economy and climate protection, the Federal Foreign Office, family affairs, environmental protection, food and agriculture. The party said all laws would be checked for compliance with the climate protection program.

The next government will work on lifting the share of renewable energy in electricity to 80% by 2030, according to the deal. It envisages determining at least 2% of the land area available for wind power plants.

Support for renewables to come only from CO2 certificates

The idea is to make sure the price of carbon dioxide equivalent in the European Union’s Emissions Trading System or ETS doesn’t fall below EUR 60 per ton, the coalition underscored and said it would support coal regions in mitigating the blow from the acceleration in the phaseout of the fossil fuel.

Furthermore, the government will boost the share of climate-neutral sources of heating to 50% by 2030, the plan reveals. The coalition decided to abolish the EEG surcharge in electricity bills on January 1, 2023, instead of in 2026. The funds used to support renewables should then be fully drawn from CO2 permits to avoid burdening the budget.

The coalition deal obligates the government to make all vehicles in Germany carbon neutral before 2035

At least 15 million all-electric cars need to be registered by 2030 and all vehicles in Germany will be carbon neutral before 2035, the deadline set by the European Commission, according to the document.

The deal sets the goal for photovoltaics at 200 GW by the end of the decade and all suitable roof areas will be used for solar energy, the coalition said.