In parliament and government, the tug-of-war over the budget for the year 2025 is currently underway. This might potentially lead to the downfall of the coalition government. However, another equally important budget project has already failed in the country: the CO2 budget calculated by the government’s experts. It denotes the amount of CO2 that Germany is allowed to emit to contribute its fair share to keeping the global temperature increase below 1.5 degrees Celsius – and Germany has already exceeded it. Today, we’ll delve into how this happened and what it means.
At least Fatih Birol still holds hope for Germany: The head of the IEA would like to share a success story about climate funding from Germany with the world, as he reveals in our interview. But he’ll have to wait a bit longer. The same goes for the experts who are calling for the German Ministry of Defense’s second climate strategy to make the Bundeswehr more green than olive green.
However, there are also cautiously optimistic news, this time from China and Brussels.
Your Bernhard Pötter
Feature
SRU: Germany has exceeded CO2 budget for 1.5 degrees
In the transport sector – here a traffic jam in Düsseldorf – emissions in Germany are barely declining.
Germany exhausted its fair share of the CO2 budget derived from the 1.5-degree limit as early as the beginning of 2023. This is the conclusion reached by the German government’s Advisory Council on Environmental Issues (SRU) in a new calculation. The Council’s calculation is based on:
and the assumption that the 1.5-degree limit should not be exceeded with a 67 percent probability.
According to the SRU, Germany can no longer maintain this trajectory. According to the Council, the budget would have allowed emissions of 19 million tons of CO2 in the past year. However, according to the UBA, Germany’s CO2 emissions in 2023 amounted to 594 million tons. As a result, Germany exceeded the budget by 575 million tons of CO2 as of early 2024.
Because the CO2 budget only considers CO2 emissions, Germany’s overall greenhouse gas emissions are significantly higher. The UBA also includes methane, nitrous oxide, and F-gases in its statistics, resulting in total emissions of 674 million tons of CO2 equivalents for 2023 – a decrease of 10.1 percent from the previous year, but still above the budget.
Budget not an official measure for German climate goals
In its current projection, the UBA also concludes that Germany is likely to achieve its 2030 climate goals – a surprising piece of good news from German climate policy. However, Germany’s climate goals have little to do with the CO2 budget that the SRU considers fair.
The budget is not anchored in German climate policy or the Climate Change Act, although the Federal Constitutional Court followed the then SRU calculations in its climate decision in April 2021. Therefore, “the cumulative emissions resulting from the Climate Change Act significantly exceed the CO2 budgets that, according to the SRU, make a fair contribution to the goals of the Paris Climate Agreement,” as the Council writes in its new statement.
1.75-degree limit could still be maintained
In the document, the SRU also calculates the budget for other probabilities and temperature limits – and for the EU:
Assuming that the 1.5-degree limit should not be exceeded with a 50 percent probability, Germany’s CO2 budget would have been 125 million tons at the beginning of 2024. At the current time, it would still be exceeded.
With a maximum warming of 1.75 degrees Celsius and a 67 percent probability, Germany would have around 13 years left to achieve greenhouse gas neutrality. This is based on the assumption of linear emissions reductions.
The EU has also already exceeded its 1.5-degree budget with a 67 percent underlying probability. Assuming the limit should only be maintained with a 50 percent probability, the EU has two more years until net zero. For the 1.75-degree target, with a 67 percent probability, Europe could emit CO2 for another 18 years.
Budget depends on many assumptions
The calculation of a fair CO2 budget depends on various assumptions. The key question is how the global CO2 budget would be fairly distributed among individual states. The SRU uses the German population’s share of the world population as a measure, which they see as a “well-founded, pragmatic approach”. From their assumptions, they derive, among other things, that a global CO2 budget can only be distributed from 2016 onwards, immediately after the Paris Climate Summit, and not from 1992, the year of the adoption of the UN Climate Convention. In this case, Germany would have exceeded its limit “even for the 1.75-degree Celsius target for many years”.
The use of the CO2 budget has long been controversial. While the SRU or Fridays for Future see its size as a measure of the quality of German climate policy, the federal government has never officially calculated with the budget. One reason for this: The Paris Climate Agreement itself does not name a global budget but sets temperature limits.
Not recognized internationally, uncertainties are significant
In the international negotiations of the UNFCCC, there is no talk of a clearly defined global ceiling for greenhouse gases – let alone national budgets. And also in EU climate policy, there is no general budget, only a CO2 cap in emissions trading. Another argument against budgets: They ignore possible surprising fluctuations in the emission curve such as the corona pandemic, economic crises, or technological breakthroughs.
The budget is also unclear in science. Although the IPCC calculated the global budget for complying with 1.5 degrees with a 67 percent probability and a high interim “overshoot” of temperatures at 400 billion tons of CO2 from 2020 in its sixth assessment report in 2022, the IPCC experts also emphasized the relatively large ranges and uncertainties in this calculation. The SRU sets the global budget lower in its current calculation than the IPCC – and then derives the German budget from it.
Due to the scientific uncertainties, experts from the climate think tank “Climate Analytics” therefore consider the budget to be a helpful approach, but one that should not be seen absolutely: “The very large uncertainties with carbon budgets mean that at best they can only provide an orientation around whether a given temperature limit can be met.”
Climate & Environment
EU-Klimapolitik
Paris Agreement
Birol: ‘It is risky to tie your economy to oil and gas’
IEA chief Fatih Birol advises all countries to invest in green technology.
Mr. Birol, COP28 has decided that the world should move away from fossil fuels. Do you see any signs of this?
The energy sector is like a large tanker that changes direction slowly. But I see the appetite for coal declining. This doesn’t happen overnight, but we expect all fossil fuels to peak before 2030. The problem is whether, after the peak, we will see a decline that aligns with the Paris climate goals. So far, we are definitely not on the path to achieving the Paris goals. But there are a few positive signs, such as with coal.
What is the most important step to accelerate the energy transition worldwide now?
The energy transition is progressing very quickly in the developed countries – in Europe, North America, Japan and China. China is now the champion of the green energy transition, number one in solar, wind and electric cars. The problem is: how do we accelerate the energy transition in developing countries, in Africa, the rest of Asia, Latin America? The fault line for all of this is that there is not enough funding for this in the emerging countries. For me, the key is to find mechanisms for financing. COP29 and COP30 must see this as a central task.
‘We need a mechanism to finance the energy transition’
Why do you see this as the task of COP?
In Dubai, we agreed on five main things. We are working on four of them: tripling renewables by 2030, doubling efficiency, reducing methane and sending a clear signal to move away from fossil fuels. But the fifth was to develop financial mechanisms for building renewables in emerging countries. And we haven’t achieved that yet. We need to address that now. I was in Brazil last week, President Lula wants to make this issue a focus of his G20 presidency and his COP presidency next year.
How can the energy transition succeed when fossil fuel companies still dominate the market?
Not all fossil fuel companies are the same. Some are much more progressive. But there is a big gap between what they say and what they do. The CEOs talk a lot about a fossil-free future, but when we look at the numbers at the IEA, we see that only 2.5 percent of their investments go to renewables and 97.5 percent to traditional operations. I hope they will change that soon.
But there are also many states whose business model is based on fossil fuels. What do you advise them, especially developing countries?
There are many countries whose economy depends on oil and gas. If I were them, I would start diversifying my economy. Because the transition to clean technologies is coming, and it is coming fast. In five to ten years, we will see that the demand for oil and gas is not as strong anymore, which will lower prices and reduce the revenues of these countries. It is a risky business to tie your economy to oil and gas.
What jobs does the energy transition bring? Is it just a job miracle for China?
Germany made a historic mistake: too much dependence on a supplier of fossil fuels. It could have been any country, but this time it was Russia. We saw the consequences of putting all our eggs in one basket. I warned the former German governments several times about this. Now China has the largest capacities: 82 percent of all solar manufacturing capacity, 75 percent in wind, and in electric vehicles, China is the main player. This should encourage other countries to compete with China. Because the next chapter of industrial technology is the production of clean technology. If Europe, the USA or India want to compete with China in this area, they need to invest in these technologies. I welcome the IRA in the USA, the Net Zero Industrial Act in the EU, Japan and India are planning similar things. We see more competition, which will bring prices down. This is good news when there is more competition, more jobs and lower prices for these important technologies.
‘Energy poverty is still the biggest problem for many people’
For many people worldwide, energy poverty is still the biggest problem.
Energy poverty mainly affects sub-Saharan Africa. A few years ago, this was the case in China and India. China has solved the problem, and India is working on it. It’s a shame that in sub-Saharan Africa, 600 million people still lack access to electricity. Four out of five families use wood as fuel, and half a million women die prematurely from the health consequences. We need to solve this problem. Especially Europeans need to solve this problem, and they could win the hearts of Africans with it.
How do you intend to clarify the benefits of the energy transition worldwide?
Everywhere, in Sri Lanka, Africa, or Europe, you can only achieve the energy transition if you have the people behind you. There are bad examples from countries where the costs of the transition are mainly borne by low- and middle-income people. We won’t solve the problem that way. It is important to develop strategies to support low- and middle-income people in the energy transition economically and financially. In Germany, there was the idea of climate money. Unfortunately, it didn’t pass. I would have liked climate money to come – then I could have cited it as an example worldwide that it works. I hope there will be another opportunity to push this through somehow. Bernhard Pötter
Fatih Birol is a Turkish economist and has been Executive Director of the International Energy Agency since 2015.
The interview was conducted as part of the “Berlin Energy Transition Dialogue” conference by a group of journalists, including Bernhard Pötter.
Fossil fuels
IEA
Inflation Reduction Act
New strategy: How the Bundeswehr prepares for climate change operations
The armed forces are to be trained to deal with the impacts of climate change.
The Bundeswehr needs to prepare itself better in its operational planning and internal structures for the impacts of climate change. According to military planners, the effects of global warming not only influence political and economic stability, crises, and conflicts but also the operational capability of the Bundeswehr. These are the central statements of the “Defense and Climate Change” strategy published by the Ministry of Defense (MoD) in March.
It complements the Ministry’s sustainability and climate action strategy, which was already presented at the end of 2023. Critics argue, however, that it remains unclear how these concepts will be implemented.
Two strategies for addressing the climate crisis
The current “Defense and Climate Change” strategy formulates recommendations for a total of eight action areas:
technology and research
planning and development of military capabilities
Bundeswehr operations
early detection and foresight
training of civilian and military personnel
defense-critical infrastructure
Bundeswehr assistance in domestic and foreign disaster relief
collaboration at national and international levels
Furthermore, the strategy aims to enhance the Bundeswehr’s capabilities for domestic relief operations in the event of natural disasters or extreme weather events. Additionally, soldiers are to learn how to effectively carry out their duties despite the impacts of climate change. The strategy also emphasizes the need to make military and defense-relevant infrastructure resilient to the consequences of climate change.
However, how these recommendations will be implemented is not precisely defined yet. The MoD emphasizes that this is still pending: “Each action area is to be concretely implemented with the help of internal action plans, which are to be developed by the end of this year.”
Thomas Erndl (CSU), a member of the Subcommittee on International Climate and Energy Policy, criticizes the lack of a clear timeline for implementation and the provision of specific budgetary allocations for it.
Costs of implementation unclear
According to Jochen Luhmann, Senior Expert at the Wuppertal Institute for Climate, Environment and Energy, the paper lacks long-term perspectives, particularly in the area of infrastructure: “Current action is indispensable there; any later spontaneity would come too late,” he explains to Table.Briefings.
Luhmann calls for a broader perspective beyond Germany: Regions where German troops would operate in the event of collective defense or foreign missions in other climatic zones. “Different weather and climate conditions may prevail there. Here, the MoD needs to define more precisely how it and the Bundeswehr intend to prepare themselves.”
And Erndl also states: “Although the area of technology, research and development is prominently placed, the action and target specifications are unspecific and, above all, unambitious.”
Predecessor paper: focus on real estate
The sustainability and climate action strategy, published by the MoD in November, formulates how the Bundeswehr itself, particularly its administration, could act more climate- and environmentally friendly.
Luhmann believes that this paper also does not focus enough on the military aspects but instead shifts to civilian areas. “Thus, the MoD diverts attention from its actual task and shifts investment burdens to a later point in time.”
Greenpeace: ‘Bundeswehr lacks ambition’
According to the MoD’s sustainability strategy, there is a need for action, especially in infrastructure and mobility: To operate the entire Bundeswehr’s building stock in Germany climate-neutrally by 2045, it is necessary to:
better thermal insulation,
energy-efficient renovations,
increased use of renewable energies,
and ultimately abandoning fossil fuels.
Moreover, more low-emission and emission-free service vehicles are to be procured.
Alexander Lurz, Peace Expert at Greenpeace, had hoped for more. He says the report is “a sad expression of the Bundeswehr’s lack of ambition to truly reduce CO2 emissions,” he tells Table.Briefings. Especially in the area not directly related to the military, there is “enormous potential for reducing CO2 emissions”. According to Lurz, “the vehicles that are not in actual military use could ambitiously be replaced by electric vehicles. But nothing seems to be happening here.” Luhmann also demands: “To achieve climate goals, combat vehicles must already be purchased with emission-free readiness.”
To this end, the MoD intends to use synthetic fuels, especially for vehicles of the troops where electric propulsion is not feasible. FDP member Nils Gründer welcomes this development and emphasizes in conversation with Table.Briefings: “In addition to the climate neutrality of eFuels, they give us a strategic advantage by making us independent of raw material imports.”
Many objectives, unclear implementation
The two papers, subordinated to defense policy guidelines, are intended to jointly help achieve the sustainability goals of the United Nations and the German government.
However, not only recommendations for action are needed, but concrete implementation plans, says Luhmann. “For me, the papers are more organizational introductions to strategies,” he concludes. And Erndl draws the conclusion: “Another paper tiger that only announces further documents and strategies brings neither the operational readiness of the Bundeswehr nor anything in the fight against climate change.”
Climate & Environment
Climate change
Sustainability
News
COP troika calls for more climate aid from industrialized countries
Eight months before the start of COP29 in Baku, the debate on the central issue of climate financing is slowly heating up. At an informal meeting of ministers and top negotiators from about 30 countries at the end of last week in Copenhagen, it became clear that the battle for funds will be fought tooth and nail. In a letter to the delegations – a “vision” obtained by Climate Briefings – the presidencies of COP28, COP29 and COP30 put forward a demand that industrialized countries should significantly increase their engagement on financing compared to what they have done so far.
The “troika” comprising representatives from the United Arab Emirates, Azerbaijan and Brazil, all G77 countries, announced their intention to aim at “raising and reframing the ambition” in formulating national climate targets (NDCs). This would involve significant efforts in financial assistance, technology transfer and capacity-building for developing countries as part of the NDCs of industrialized countries.
Controversy over new financing goal
At the meeting in Copenhagen, this demand sparked controversial discussions, according to participants. There is less opposition to the call for more finances, which will dominate the year and the debate over a new climate financing goal (NCQG) beyond the 100 billion dollars annually. However, there is disagreement over deriving this demand from the Paris Agreement, which the United States, for example, rejects. Germanwatch observers also believe that NDCs are “not the best place” for financial guarantees to developing countries. They argue for an “appropriate new global financing goal” and a reform of the financial architecture.
In the search for additional sources of funding for climate assistance, new challenges must also be navigated. A climate levy on international shipping, considered one of the easier ways to generate additional funds, is not intended to flow into climate pots such as those for loss and damage, according to the International Maritime Organization (IMO), as reported by Climate Home. Instead, if such a levy were to be implemented, it should go towards green innovations for fleets, according to the IMO. bpo
COP29
Climate initiatives: EU Commission to join BOGA
It would be a significant move signaling a departure from fossil fuels. The EU Commission intends to become a partner of the Beyond Oil and Gas Alliance (BOGA). The Commission will inform the energy experts of the member states in the Council of the EU about this project, which has been prepared for some time, as indicated by the agenda for today.
BOGA was founded in 2021 at COP26 in Glasgow by Denmark and Costa Rica. According to the official declaration, the “members” and “friends” of the organization commit to aligning the promotion of oil and gas with the Paris Climate Goals – although the wording is very soft. The category “partner” is not yet found on the BOGA website. The two organizations were unable to provide an explanation of the Commission’s plans on Monday.
Netherlands and Romania still relevant oil and gas producing countries
Climate advocates consider the step to be effective. “A partnership with the EU Commission would be a significant step for the recognition and impact of BOGA,” says Thea Ulrich of Germanwatch. So far, none of the major international oil and gas-producing countries have joined BOGA.
“If the Commission could motivate EU member states to join BOGA, it would have an impact,” says Ulrich. Italy, Romania, and Denmark have significant oil production, while the Netherlands and Romania are relevant for gas. Currently, the Netherlands and Romania are not involved in BOGA. ber
Energiewende
Northvolt battery factory: scheduled start of construction, uncertain rail connection
There was bipartisan enthusiasm on Monday in Heide, Schleswig-Holstein, as Federal Chancellor Olaf Scholz (SPD), Minister for Economic Affairs Robert Habeck (Greens) and Schleswig-Holstein’s Prime Minister Daniel Günther (CDU) celebrated the symbolic start of construction for the large battery factory of the Swedish company Northvolt. They hailed the project as an example of the environmentally friendly transformation of the German economy. “Industry settles where there is energy,” said Scholz at the ceremony. “It was not a coincidence but a clear decision to rely on wind energy.” Habeck emphasized beforehand that the factory would reduce dependence on China in electric car production.
Located west of Heide, the factory is set to begin production in 2026 and reach full capacity by 2029. At that point, around 3,000 employees will produce batteries for one million electric cars annually. To attract the establishment of the factory and prevent it from relocating, the federal government and the state are investing heavily, despite significant cuts in the federal budget: Northvolt will receive subsidies totaling up to 900 million euros over several years, with 600 million as direct grants and over 200 million as guarantees. The EU approved this funding in January.
Doubts about rail connection
While the batteries produced in Heide are intended to make transportation more environmentally friendly, it is not yet guaranteed for the transports to and from the factory. Although Northvolt intends to primarily use rail transport, the feasibility of this plan is doubtful, warned Members of Parliament Matthias Gastel (Greens) and Stefan Seidler (South Schleswig Voter Federation) on Monday. This doubt arises because the route to the south involves crossing the Kiel Canal – yet the Hochdonn High Bridge on the main route to Hamburg is not suitable for heavy freight trains.
As an alternative, the High Bridge on the route to Neumünster is under consideration, but this route is currently single-track. Seidler explained that additional passing loops are urgently needed, for which the federal government is responsible. “For there to be any freight trains to Heide by 2026, this issue must become a matter of urgency in Berlin and be placed on the Chancellor’s desk,” Seidler stated. Gastel emphasized the need for “German speed” not only in building the industrial facility but also in connecting it via rail. mkr
How effective are nature-based climate solutions used for CO2 compensation and emission accounting? A recent study in the journal “Nature Climate Change” highlights substantial uncertainties and research gaps in this area. Dozens of independent experts examined nature-based climate solutions for their potential to reduce greenhouse gas emissions globally.
However, significant uncertainties and limited reduction potential are found in 13 solutions, including the restoration of coral reefs and seagrass beds, as well as microbial additives for farmland. Many of these solutions are already being accounted for in compensation projects, despite incomplete greenhouse gas measurement and accounting, caution the study authors. Uncertainty also exists regarding the longevity of the projects and which baseline should be used for accounting.
More research needed for agroforestry and peatlands
There is a moderate reduction potential but existing uncertainties in 26 nature-based climate solutions, such as agroforestry, forest management, and protection and restoration of peatlands. Some of these solutions show significant differences in their potential for emission reduction. The authors recommend more research before scaling up these uncertain projects for CO2 compensation.
It is currently uncertain how the EU’s renaturation law will proceed. It was supposed to be adopted in the Environmental Council on Wednesday, but Hungary changed its position at the last minute. Austria could ensure implementation by approving it, but it continues to abstain. On Wednesday, Austria’s Minister for Climate Action, Leonore Gewessler (Greens), stated that she did not want to override the decision of the federal states. Instead, she trusts that the Belgian presidency will find a solution. lb
Nature-Based Solutions
NGOs call for fewer obstacles to sustainable investments
The financing needed to achieve the European climate goals and decarbonize the European economy is immense. Therefore, more incentives to mobilize private financial resources and a more efficient use of public funds are necessary. This is evident from a report by the think tank E3G together with Share Action and WWF.
The EU Commission estimates that an additional 620 billion euros annually is needed, on top of the already decided investments, to achieve the goals of the Green Deal and REPowerEU.
Three-quarters of the financing gap for decarbonization could be filled by reallocating funds from “harmful or unnecessary” activities – such as fossil fuel subsidies – write the authors of the report. This requires better incentives for investors to invest their money sustainably.
Priorities to increase private funds
To advance private financing of climate goals, the three organizations propose six priorities for European legislation:
channeling investments for an effective transition
ensuring consistency and effectiveness of sustainability reporting
removing obstacles for consumers who want to invest sustainably
establishing strict standards for due diligence and engagement of financial institutions
considering climate and sustainability risks
improving accountability and expertise on sustainability in corporate governance
In addition, the authors recommend increasing public financial resources at both national and EU levels, making the European Central Bank’s monetary policy “greener” and using funds more effectively as “levers”. kul
Climate financing
European policy
EZB
Sorgfaltspflichten
Expert: lawsuit against halt of LNG terminals in the US ‘hard to understand’
Texas, Louisiana and Florida are among the 16 Republican states that sued the US government under President Joe Biden last Thursday. They are challenging Biden’s decision at the end of January to halt the construction of new LNG terminals to reassess their climate impacts. The moratorium could delay new approvals for months, if granted at all.
The plaintiffs argue that the German government does not have the authority to impose such a moratorium. They claim that the government must demonstrate that the LNG projects are incompatible with the public interest. Biden’s administration sees this as a valid concern, citing the climate impacts of the planned terminals, which would result in an additional 3.2 trillion tons of greenhouse gases annually – equivalent to the EU’s emissions in the same period.
International oversupply of liquefied natural gas
The plaintiffs also argue that the months-long halt on new construction permits harms the economy and allied European countries that rely on importing liquefied natural gas (LNG) to become independent from Russian gas.
From an energy industry perspective, this is “hard to understand,” says Claudia Kemfert, Head of the Energy, Transport, and Environment Department at the German Institute for Economic Research (DIW), to Table.Briefings. The USA already exports sufficient liquefied natural gas, and there is an oversupply on the international markets, which is exacerbated by unnecessary LNG terminals in Germany. The halt could, however, save the USA from stranded assets.
Due to methane released during gas extraction, the new LNG projects are particularly harmful to the climate in the short term. If the gas is extracted through fracking, as in the USA, there are also environmental impacts due to the chemicals used and high water consumption.
Currently, around 4.5 percent of German gas imports come as liquefied natural gas from the USA, according to data from the Federal Network Agency. Gas from Russia still reaches Germany through detours. According to Kemfert, both could be avoided by importing LNG from Australia, Nigeria, Qatar or Abu Dhabi instead. “In the future, the demand for fossil natural gas should decrease if Germany wants to meet its climate goals,” says Kemfert. This is also because liquefied natural gas drives up electricity prices, making cheaper energy sources more attractive. rtr/lb
Gasspeicher
Environment Ministry adds aluminum to emissions trading
The Ministry of Ecology and Environment is preparing to include aluminum in China’s emissions trading system (ETS). According to Chinese media reports, it has published draft guidelines for monitoring, reporting and reviewing carbon emissions from the aluminum smelting sector. Accordingly, the electrolytic aluminum sub-sector will soon be included in the ETS. It is the most energy and emission-intensive sub-sector among the non-ferrous metals, which also include copper and lead. The ministry is now gathering public feedback on the guidelines until March 31.
Preparations for the “imminent inclusion” of this sector are already underway, writes the business magazine Caixin, citing insiders. Chen Xuesen, Vice Director of the China Nonferrous Metals Industry Association, stated earlier this year that more than 80 electrolytic aluminum companies are expected to be included in the ETS. Metallic aluminum is extracted from bauxite ore in a complex and energy-intensive process via the intermediate step of aluminum oxide. It is then processed into metallic aluminum using fused-salt electrolysis. The process requires a lot of energy and its chemical reactions also release carbon dioxide. According to the report, this sector alone accounts for 65 percent of the country’s carbon emissions from non-ferrous metals and 4.5 percent of China’s total emissions.
So far, China’s ETS covers 2,257 companies from the energy sector, primarily coal-fired power plants. An expansion to other heavy industry sectors has long been planned but repeatedly postponed. Cement and steel are two other candidates for inclusion, but according to Caixin, their preparations have not yet progressed as far as aluminum. ck
In parliament and government, the tug-of-war over the budget for the year 2025 is currently underway. This might potentially lead to the downfall of the coalition government. However, another equally important budget project has already failed in the country: the CO2 budget calculated by the government’s experts. It denotes the amount of CO2 that Germany is allowed to emit to contribute its fair share to keeping the global temperature increase below 1.5 degrees Celsius – and Germany has already exceeded it. Today, we’ll delve into how this happened and what it means.
At least Fatih Birol still holds hope for Germany: The head of the IEA would like to share a success story about climate funding from Germany with the world, as he reveals in our interview. But he’ll have to wait a bit longer. The same goes for the experts who are calling for the German Ministry of Defense’s second climate strategy to make the Bundeswehr more green than olive green.
However, there are also cautiously optimistic news, this time from China and Brussels.
Your Bernhard Pötter
Feature
SRU: Germany has exceeded CO2 budget for 1.5 degrees
In the transport sector – here a traffic jam in Düsseldorf – emissions in Germany are barely declining.
Germany exhausted its fair share of the CO2 budget derived from the 1.5-degree limit as early as the beginning of 2023. This is the conclusion reached by the German government’s Advisory Council on Environmental Issues (SRU) in a new calculation. The Council’s calculation is based on:
and the assumption that the 1.5-degree limit should not be exceeded with a 67 percent probability.
According to the SRU, Germany can no longer maintain this trajectory. According to the Council, the budget would have allowed emissions of 19 million tons of CO2 in the past year. However, according to the UBA, Germany’s CO2 emissions in 2023 amounted to 594 million tons. As a result, Germany exceeded the budget by 575 million tons of CO2 as of early 2024.
Because the CO2 budget only considers CO2 emissions, Germany’s overall greenhouse gas emissions are significantly higher. The UBA also includes methane, nitrous oxide, and F-gases in its statistics, resulting in total emissions of 674 million tons of CO2 equivalents for 2023 – a decrease of 10.1 percent from the previous year, but still above the budget.
Budget not an official measure for German climate goals
In its current projection, the UBA also concludes that Germany is likely to achieve its 2030 climate goals – a surprising piece of good news from German climate policy. However, Germany’s climate goals have little to do with the CO2 budget that the SRU considers fair.
The budget is not anchored in German climate policy or the Climate Change Act, although the Federal Constitutional Court followed the then SRU calculations in its climate decision in April 2021. Therefore, “the cumulative emissions resulting from the Climate Change Act significantly exceed the CO2 budgets that, according to the SRU, make a fair contribution to the goals of the Paris Climate Agreement,” as the Council writes in its new statement.
1.75-degree limit could still be maintained
In the document, the SRU also calculates the budget for other probabilities and temperature limits – and for the EU:
Assuming that the 1.5-degree limit should not be exceeded with a 50 percent probability, Germany’s CO2 budget would have been 125 million tons at the beginning of 2024. At the current time, it would still be exceeded.
With a maximum warming of 1.75 degrees Celsius and a 67 percent probability, Germany would have around 13 years left to achieve greenhouse gas neutrality. This is based on the assumption of linear emissions reductions.
The EU has also already exceeded its 1.5-degree budget with a 67 percent underlying probability. Assuming the limit should only be maintained with a 50 percent probability, the EU has two more years until net zero. For the 1.75-degree target, with a 67 percent probability, Europe could emit CO2 for another 18 years.
Budget depends on many assumptions
The calculation of a fair CO2 budget depends on various assumptions. The key question is how the global CO2 budget would be fairly distributed among individual states. The SRU uses the German population’s share of the world population as a measure, which they see as a “well-founded, pragmatic approach”. From their assumptions, they derive, among other things, that a global CO2 budget can only be distributed from 2016 onwards, immediately after the Paris Climate Summit, and not from 1992, the year of the adoption of the UN Climate Convention. In this case, Germany would have exceeded its limit “even for the 1.75-degree Celsius target for many years”.
The use of the CO2 budget has long been controversial. While the SRU or Fridays for Future see its size as a measure of the quality of German climate policy, the federal government has never officially calculated with the budget. One reason for this: The Paris Climate Agreement itself does not name a global budget but sets temperature limits.
Not recognized internationally, uncertainties are significant
In the international negotiations of the UNFCCC, there is no talk of a clearly defined global ceiling for greenhouse gases – let alone national budgets. And also in EU climate policy, there is no general budget, only a CO2 cap in emissions trading. Another argument against budgets: They ignore possible surprising fluctuations in the emission curve such as the corona pandemic, economic crises, or technological breakthroughs.
The budget is also unclear in science. Although the IPCC calculated the global budget for complying with 1.5 degrees with a 67 percent probability and a high interim “overshoot” of temperatures at 400 billion tons of CO2 from 2020 in its sixth assessment report in 2022, the IPCC experts also emphasized the relatively large ranges and uncertainties in this calculation. The SRU sets the global budget lower in its current calculation than the IPCC – and then derives the German budget from it.
Due to the scientific uncertainties, experts from the climate think tank “Climate Analytics” therefore consider the budget to be a helpful approach, but one that should not be seen absolutely: “The very large uncertainties with carbon budgets mean that at best they can only provide an orientation around whether a given temperature limit can be met.”
Climate & Environment
EU-Klimapolitik
Paris Agreement
Birol: ‘It is risky to tie your economy to oil and gas’
IEA chief Fatih Birol advises all countries to invest in green technology.
Mr. Birol, COP28 has decided that the world should move away from fossil fuels. Do you see any signs of this?
The energy sector is like a large tanker that changes direction slowly. But I see the appetite for coal declining. This doesn’t happen overnight, but we expect all fossil fuels to peak before 2030. The problem is whether, after the peak, we will see a decline that aligns with the Paris climate goals. So far, we are definitely not on the path to achieving the Paris goals. But there are a few positive signs, such as with coal.
What is the most important step to accelerate the energy transition worldwide now?
The energy transition is progressing very quickly in the developed countries – in Europe, North America, Japan and China. China is now the champion of the green energy transition, number one in solar, wind and electric cars. The problem is: how do we accelerate the energy transition in developing countries, in Africa, the rest of Asia, Latin America? The fault line for all of this is that there is not enough funding for this in the emerging countries. For me, the key is to find mechanisms for financing. COP29 and COP30 must see this as a central task.
‘We need a mechanism to finance the energy transition’
Why do you see this as the task of COP?
In Dubai, we agreed on five main things. We are working on four of them: tripling renewables by 2030, doubling efficiency, reducing methane and sending a clear signal to move away from fossil fuels. But the fifth was to develop financial mechanisms for building renewables in emerging countries. And we haven’t achieved that yet. We need to address that now. I was in Brazil last week, President Lula wants to make this issue a focus of his G20 presidency and his COP presidency next year.
How can the energy transition succeed when fossil fuel companies still dominate the market?
Not all fossil fuel companies are the same. Some are much more progressive. But there is a big gap between what they say and what they do. The CEOs talk a lot about a fossil-free future, but when we look at the numbers at the IEA, we see that only 2.5 percent of their investments go to renewables and 97.5 percent to traditional operations. I hope they will change that soon.
But there are also many states whose business model is based on fossil fuels. What do you advise them, especially developing countries?
There are many countries whose economy depends on oil and gas. If I were them, I would start diversifying my economy. Because the transition to clean technologies is coming, and it is coming fast. In five to ten years, we will see that the demand for oil and gas is not as strong anymore, which will lower prices and reduce the revenues of these countries. It is a risky business to tie your economy to oil and gas.
What jobs does the energy transition bring? Is it just a job miracle for China?
Germany made a historic mistake: too much dependence on a supplier of fossil fuels. It could have been any country, but this time it was Russia. We saw the consequences of putting all our eggs in one basket. I warned the former German governments several times about this. Now China has the largest capacities: 82 percent of all solar manufacturing capacity, 75 percent in wind, and in electric vehicles, China is the main player. This should encourage other countries to compete with China. Because the next chapter of industrial technology is the production of clean technology. If Europe, the USA or India want to compete with China in this area, they need to invest in these technologies. I welcome the IRA in the USA, the Net Zero Industrial Act in the EU, Japan and India are planning similar things. We see more competition, which will bring prices down. This is good news when there is more competition, more jobs and lower prices for these important technologies.
‘Energy poverty is still the biggest problem for many people’
For many people worldwide, energy poverty is still the biggest problem.
Energy poverty mainly affects sub-Saharan Africa. A few years ago, this was the case in China and India. China has solved the problem, and India is working on it. It’s a shame that in sub-Saharan Africa, 600 million people still lack access to electricity. Four out of five families use wood as fuel, and half a million women die prematurely from the health consequences. We need to solve this problem. Especially Europeans need to solve this problem, and they could win the hearts of Africans with it.
How do you intend to clarify the benefits of the energy transition worldwide?
Everywhere, in Sri Lanka, Africa, or Europe, you can only achieve the energy transition if you have the people behind you. There are bad examples from countries where the costs of the transition are mainly borne by low- and middle-income people. We won’t solve the problem that way. It is important to develop strategies to support low- and middle-income people in the energy transition economically and financially. In Germany, there was the idea of climate money. Unfortunately, it didn’t pass. I would have liked climate money to come – then I could have cited it as an example worldwide that it works. I hope there will be another opportunity to push this through somehow. Bernhard Pötter
Fatih Birol is a Turkish economist and has been Executive Director of the International Energy Agency since 2015.
The interview was conducted as part of the “Berlin Energy Transition Dialogue” conference by a group of journalists, including Bernhard Pötter.
Fossil fuels
IEA
Inflation Reduction Act
New strategy: How the Bundeswehr prepares for climate change operations
The armed forces are to be trained to deal with the impacts of climate change.
The Bundeswehr needs to prepare itself better in its operational planning and internal structures for the impacts of climate change. According to military planners, the effects of global warming not only influence political and economic stability, crises, and conflicts but also the operational capability of the Bundeswehr. These are the central statements of the “Defense and Climate Change” strategy published by the Ministry of Defense (MoD) in March.
It complements the Ministry’s sustainability and climate action strategy, which was already presented at the end of 2023. Critics argue, however, that it remains unclear how these concepts will be implemented.
Two strategies for addressing the climate crisis
The current “Defense and Climate Change” strategy formulates recommendations for a total of eight action areas:
technology and research
planning and development of military capabilities
Bundeswehr operations
early detection and foresight
training of civilian and military personnel
defense-critical infrastructure
Bundeswehr assistance in domestic and foreign disaster relief
collaboration at national and international levels
Furthermore, the strategy aims to enhance the Bundeswehr’s capabilities for domestic relief operations in the event of natural disasters or extreme weather events. Additionally, soldiers are to learn how to effectively carry out their duties despite the impacts of climate change. The strategy also emphasizes the need to make military and defense-relevant infrastructure resilient to the consequences of climate change.
However, how these recommendations will be implemented is not precisely defined yet. The MoD emphasizes that this is still pending: “Each action area is to be concretely implemented with the help of internal action plans, which are to be developed by the end of this year.”
Thomas Erndl (CSU), a member of the Subcommittee on International Climate and Energy Policy, criticizes the lack of a clear timeline for implementation and the provision of specific budgetary allocations for it.
Costs of implementation unclear
According to Jochen Luhmann, Senior Expert at the Wuppertal Institute for Climate, Environment and Energy, the paper lacks long-term perspectives, particularly in the area of infrastructure: “Current action is indispensable there; any later spontaneity would come too late,” he explains to Table.Briefings.
Luhmann calls for a broader perspective beyond Germany: Regions where German troops would operate in the event of collective defense or foreign missions in other climatic zones. “Different weather and climate conditions may prevail there. Here, the MoD needs to define more precisely how it and the Bundeswehr intend to prepare themselves.”
And Erndl also states: “Although the area of technology, research and development is prominently placed, the action and target specifications are unspecific and, above all, unambitious.”
Predecessor paper: focus on real estate
The sustainability and climate action strategy, published by the MoD in November, formulates how the Bundeswehr itself, particularly its administration, could act more climate- and environmentally friendly.
Luhmann believes that this paper also does not focus enough on the military aspects but instead shifts to civilian areas. “Thus, the MoD diverts attention from its actual task and shifts investment burdens to a later point in time.”
Greenpeace: ‘Bundeswehr lacks ambition’
According to the MoD’s sustainability strategy, there is a need for action, especially in infrastructure and mobility: To operate the entire Bundeswehr’s building stock in Germany climate-neutrally by 2045, it is necessary to:
better thermal insulation,
energy-efficient renovations,
increased use of renewable energies,
and ultimately abandoning fossil fuels.
Moreover, more low-emission and emission-free service vehicles are to be procured.
Alexander Lurz, Peace Expert at Greenpeace, had hoped for more. He says the report is “a sad expression of the Bundeswehr’s lack of ambition to truly reduce CO2 emissions,” he tells Table.Briefings. Especially in the area not directly related to the military, there is “enormous potential for reducing CO2 emissions”. According to Lurz, “the vehicles that are not in actual military use could ambitiously be replaced by electric vehicles. But nothing seems to be happening here.” Luhmann also demands: “To achieve climate goals, combat vehicles must already be purchased with emission-free readiness.”
To this end, the MoD intends to use synthetic fuels, especially for vehicles of the troops where electric propulsion is not feasible. FDP member Nils Gründer welcomes this development and emphasizes in conversation with Table.Briefings: “In addition to the climate neutrality of eFuels, they give us a strategic advantage by making us independent of raw material imports.”
Many objectives, unclear implementation
The two papers, subordinated to defense policy guidelines, are intended to jointly help achieve the sustainability goals of the United Nations and the German government.
However, not only recommendations for action are needed, but concrete implementation plans, says Luhmann. “For me, the papers are more organizational introductions to strategies,” he concludes. And Erndl draws the conclusion: “Another paper tiger that only announces further documents and strategies brings neither the operational readiness of the Bundeswehr nor anything in the fight against climate change.”
Climate & Environment
Climate change
Sustainability
News
COP troika calls for more climate aid from industrialized countries
Eight months before the start of COP29 in Baku, the debate on the central issue of climate financing is slowly heating up. At an informal meeting of ministers and top negotiators from about 30 countries at the end of last week in Copenhagen, it became clear that the battle for funds will be fought tooth and nail. In a letter to the delegations – a “vision” obtained by Climate Briefings – the presidencies of COP28, COP29 and COP30 put forward a demand that industrialized countries should significantly increase their engagement on financing compared to what they have done so far.
The “troika” comprising representatives from the United Arab Emirates, Azerbaijan and Brazil, all G77 countries, announced their intention to aim at “raising and reframing the ambition” in formulating national climate targets (NDCs). This would involve significant efforts in financial assistance, technology transfer and capacity-building for developing countries as part of the NDCs of industrialized countries.
Controversy over new financing goal
At the meeting in Copenhagen, this demand sparked controversial discussions, according to participants. There is less opposition to the call for more finances, which will dominate the year and the debate over a new climate financing goal (NCQG) beyond the 100 billion dollars annually. However, there is disagreement over deriving this demand from the Paris Agreement, which the United States, for example, rejects. Germanwatch observers also believe that NDCs are “not the best place” for financial guarantees to developing countries. They argue for an “appropriate new global financing goal” and a reform of the financial architecture.
In the search for additional sources of funding for climate assistance, new challenges must also be navigated. A climate levy on international shipping, considered one of the easier ways to generate additional funds, is not intended to flow into climate pots such as those for loss and damage, according to the International Maritime Organization (IMO), as reported by Climate Home. Instead, if such a levy were to be implemented, it should go towards green innovations for fleets, according to the IMO. bpo
COP29
Climate initiatives: EU Commission to join BOGA
It would be a significant move signaling a departure from fossil fuels. The EU Commission intends to become a partner of the Beyond Oil and Gas Alliance (BOGA). The Commission will inform the energy experts of the member states in the Council of the EU about this project, which has been prepared for some time, as indicated by the agenda for today.
BOGA was founded in 2021 at COP26 in Glasgow by Denmark and Costa Rica. According to the official declaration, the “members” and “friends” of the organization commit to aligning the promotion of oil and gas with the Paris Climate Goals – although the wording is very soft. The category “partner” is not yet found on the BOGA website. The two organizations were unable to provide an explanation of the Commission’s plans on Monday.
Netherlands and Romania still relevant oil and gas producing countries
Climate advocates consider the step to be effective. “A partnership with the EU Commission would be a significant step for the recognition and impact of BOGA,” says Thea Ulrich of Germanwatch. So far, none of the major international oil and gas-producing countries have joined BOGA.
“If the Commission could motivate EU member states to join BOGA, it would have an impact,” says Ulrich. Italy, Romania, and Denmark have significant oil production, while the Netherlands and Romania are relevant for gas. Currently, the Netherlands and Romania are not involved in BOGA. ber
Energiewende
Northvolt battery factory: scheduled start of construction, uncertain rail connection
There was bipartisan enthusiasm on Monday in Heide, Schleswig-Holstein, as Federal Chancellor Olaf Scholz (SPD), Minister for Economic Affairs Robert Habeck (Greens) and Schleswig-Holstein’s Prime Minister Daniel Günther (CDU) celebrated the symbolic start of construction for the large battery factory of the Swedish company Northvolt. They hailed the project as an example of the environmentally friendly transformation of the German economy. “Industry settles where there is energy,” said Scholz at the ceremony. “It was not a coincidence but a clear decision to rely on wind energy.” Habeck emphasized beforehand that the factory would reduce dependence on China in electric car production.
Located west of Heide, the factory is set to begin production in 2026 and reach full capacity by 2029. At that point, around 3,000 employees will produce batteries for one million electric cars annually. To attract the establishment of the factory and prevent it from relocating, the federal government and the state are investing heavily, despite significant cuts in the federal budget: Northvolt will receive subsidies totaling up to 900 million euros over several years, with 600 million as direct grants and over 200 million as guarantees. The EU approved this funding in January.
Doubts about rail connection
While the batteries produced in Heide are intended to make transportation more environmentally friendly, it is not yet guaranteed for the transports to and from the factory. Although Northvolt intends to primarily use rail transport, the feasibility of this plan is doubtful, warned Members of Parliament Matthias Gastel (Greens) and Stefan Seidler (South Schleswig Voter Federation) on Monday. This doubt arises because the route to the south involves crossing the Kiel Canal – yet the Hochdonn High Bridge on the main route to Hamburg is not suitable for heavy freight trains.
As an alternative, the High Bridge on the route to Neumünster is under consideration, but this route is currently single-track. Seidler explained that additional passing loops are urgently needed, for which the federal government is responsible. “For there to be any freight trains to Heide by 2026, this issue must become a matter of urgency in Berlin and be placed on the Chancellor’s desk,” Seidler stated. Gastel emphasized the need for “German speed” not only in building the industrial facility but also in connecting it via rail. mkr
How effective are nature-based climate solutions used for CO2 compensation and emission accounting? A recent study in the journal “Nature Climate Change” highlights substantial uncertainties and research gaps in this area. Dozens of independent experts examined nature-based climate solutions for their potential to reduce greenhouse gas emissions globally.
However, significant uncertainties and limited reduction potential are found in 13 solutions, including the restoration of coral reefs and seagrass beds, as well as microbial additives for farmland. Many of these solutions are already being accounted for in compensation projects, despite incomplete greenhouse gas measurement and accounting, caution the study authors. Uncertainty also exists regarding the longevity of the projects and which baseline should be used for accounting.
More research needed for agroforestry and peatlands
There is a moderate reduction potential but existing uncertainties in 26 nature-based climate solutions, such as agroforestry, forest management, and protection and restoration of peatlands. Some of these solutions show significant differences in their potential for emission reduction. The authors recommend more research before scaling up these uncertain projects for CO2 compensation.
It is currently uncertain how the EU’s renaturation law will proceed. It was supposed to be adopted in the Environmental Council on Wednesday, but Hungary changed its position at the last minute. Austria could ensure implementation by approving it, but it continues to abstain. On Wednesday, Austria’s Minister for Climate Action, Leonore Gewessler (Greens), stated that she did not want to override the decision of the federal states. Instead, she trusts that the Belgian presidency will find a solution. lb
Nature-Based Solutions
NGOs call for fewer obstacles to sustainable investments
The financing needed to achieve the European climate goals and decarbonize the European economy is immense. Therefore, more incentives to mobilize private financial resources and a more efficient use of public funds are necessary. This is evident from a report by the think tank E3G together with Share Action and WWF.
The EU Commission estimates that an additional 620 billion euros annually is needed, on top of the already decided investments, to achieve the goals of the Green Deal and REPowerEU.
Three-quarters of the financing gap for decarbonization could be filled by reallocating funds from “harmful or unnecessary” activities – such as fossil fuel subsidies – write the authors of the report. This requires better incentives for investors to invest their money sustainably.
Priorities to increase private funds
To advance private financing of climate goals, the three organizations propose six priorities for European legislation:
channeling investments for an effective transition
ensuring consistency and effectiveness of sustainability reporting
removing obstacles for consumers who want to invest sustainably
establishing strict standards for due diligence and engagement of financial institutions
considering climate and sustainability risks
improving accountability and expertise on sustainability in corporate governance
In addition, the authors recommend increasing public financial resources at both national and EU levels, making the European Central Bank’s monetary policy “greener” and using funds more effectively as “levers”. kul
Climate financing
European policy
EZB
Sorgfaltspflichten
Expert: lawsuit against halt of LNG terminals in the US ‘hard to understand’
Texas, Louisiana and Florida are among the 16 Republican states that sued the US government under President Joe Biden last Thursday. They are challenging Biden’s decision at the end of January to halt the construction of new LNG terminals to reassess their climate impacts. The moratorium could delay new approvals for months, if granted at all.
The plaintiffs argue that the German government does not have the authority to impose such a moratorium. They claim that the government must demonstrate that the LNG projects are incompatible with the public interest. Biden’s administration sees this as a valid concern, citing the climate impacts of the planned terminals, which would result in an additional 3.2 trillion tons of greenhouse gases annually – equivalent to the EU’s emissions in the same period.
International oversupply of liquefied natural gas
The plaintiffs also argue that the months-long halt on new construction permits harms the economy and allied European countries that rely on importing liquefied natural gas (LNG) to become independent from Russian gas.
From an energy industry perspective, this is “hard to understand,” says Claudia Kemfert, Head of the Energy, Transport, and Environment Department at the German Institute for Economic Research (DIW), to Table.Briefings. The USA already exports sufficient liquefied natural gas, and there is an oversupply on the international markets, which is exacerbated by unnecessary LNG terminals in Germany. The halt could, however, save the USA from stranded assets.
Due to methane released during gas extraction, the new LNG projects are particularly harmful to the climate in the short term. If the gas is extracted through fracking, as in the USA, there are also environmental impacts due to the chemicals used and high water consumption.
Currently, around 4.5 percent of German gas imports come as liquefied natural gas from the USA, according to data from the Federal Network Agency. Gas from Russia still reaches Germany through detours. According to Kemfert, both could be avoided by importing LNG from Australia, Nigeria, Qatar or Abu Dhabi instead. “In the future, the demand for fossil natural gas should decrease if Germany wants to meet its climate goals,” says Kemfert. This is also because liquefied natural gas drives up electricity prices, making cheaper energy sources more attractive. rtr/lb
Gasspeicher
Environment Ministry adds aluminum to emissions trading
The Ministry of Ecology and Environment is preparing to include aluminum in China’s emissions trading system (ETS). According to Chinese media reports, it has published draft guidelines for monitoring, reporting and reviewing carbon emissions from the aluminum smelting sector. Accordingly, the electrolytic aluminum sub-sector will soon be included in the ETS. It is the most energy and emission-intensive sub-sector among the non-ferrous metals, which also include copper and lead. The ministry is now gathering public feedback on the guidelines until March 31.
Preparations for the “imminent inclusion” of this sector are already underway, writes the business magazine Caixin, citing insiders. Chen Xuesen, Vice Director of the China Nonferrous Metals Industry Association, stated earlier this year that more than 80 electrolytic aluminum companies are expected to be included in the ETS. Metallic aluminum is extracted from bauxite ore in a complex and energy-intensive process via the intermediate step of aluminum oxide. It is then processed into metallic aluminum using fused-salt electrolysis. The process requires a lot of energy and its chemical reactions also release carbon dioxide. According to the report, this sector alone accounts for 65 percent of the country’s carbon emissions from non-ferrous metals and 4.5 percent of China’s total emissions.
So far, China’s ETS covers 2,257 companies from the energy sector, primarily coal-fired power plants. An expansion to other heavy industry sectors has long been planned but repeatedly postponed. Cement and steel are two other candidates for inclusion, but according to Caixin, their preparations have not yet progressed as far as aluminum. ck
