The images from Los Angeles and the surrounding area look like something from one of the worst climate disaster dystopias. But what do the forest fires have to do with the climate crisis? Bernhard Pötter analyzes this today. However, the question that is being asked out loud in California is: Is climate damage blowing up insurance systems even in rich countries?
In our series of climate fact checks for the German parliamentary elections, today we look at the proposals and discussions surrounding CCS. Nico Beckert summarizes the state of the debate and explains why even the coal company LEAG thinks little of CCS for coal-fired power plants.
Manuel Berkel also explains the current debates on the expansion of renewables in the EU and what problems there are at European level with the expansion of wind energy.
Stay tuned with us!
The devastating forest fires in Los Angeles have not only killed many people and devastated the infrastructure of the urban landscape. The fires are also turning into one of the costliest natural disasters in US history. They raise the question of whether the risks of the climate crisis can still be covered by insurance, even in a wealthy region of one of the richest countries in the world. After all, the immense material damage in California and other US states poses an acute threat to the system of insurance and reinsurance of property values.
According to the authorities, the many fires in the Los Angeles area have so far claimed 24 lives, destroyed around 12,000 buildings, and displaced around 150,000 people as of Monday afternoon. 7,500 firefighters and aid workers are battling the flames, which are being fanned by unusually strong winds from the mountains. After a brief recovery, these winds and thus possibly also the fires should increase again from Tuesday.
An initial overview shows that the damage could well exceed all previous losses from forest and bushfires in the USA at more than USD 50 billion. In contrast to the approximately USD 20 billion in damage caused by the 2018 fires, the Democratic Governor of California, Gavin Newsom, expects the fire to be the “worst natural disaster” in the USA in terms of costs. The weather service AccuWeather even expects total damages of 250 to 275 billion dollars if secondary effects such as missed work time or interrupted supply chains are included.
In addition, many homeowners are not or no longer insured against fire – partly because their insurance companies no longer want to bear this risk. For years – and especially after the Camp Fire disaster in 2018 – the two insurance companies State Farm and Allstate have been reducing their fire insurance policies in California, according to a report in the New Yorker. Just last year, they terminated around 1,500 policies in the Pacific Palisades district, where one of the devastating fires started.
Last year, the major insurers in California canceled or did not renew the fire insurance policies of tens of thousands of property owners – including many in the areas now affected. The reason: rising losses on the one hand and, on the other, legal regulations that set tight limits on insurers’ pricing. The state regulator Ricardo Lara only changed these restrictive rules shortly before the turn of the year. Insurers are now allowed to do things differently than before:
These measures were intended to revive the market for private property insurance in California. The L.A. disaster has therefore also come at an extremely unfavorable time economically.
As in other US states, companies are increasingly withdrawing from fire, flood and storm insurance, for example in US states on the east coast, mainly due to rising climate-related risks. Publicly subsidized insurance companies then have to step in – but their profitability is also under threat in some cases.
In California, the state-supported FAIR insurance scheme was intended to close this gap. Since 2023 alone, it has increased the number of its policies by 40 percent – owners who failed with private programs found protection here. FAIR now covers 450 billion US dollars in values and faces the question of whether it should make the policies significantly more expensive for individual owners or whether the state should ultimately use taxpayers’ money to cover these private property risks – and whether this is financially feasible. There is also a similar debate in Germany and Europe about compulsory insurance against natural hazards – which, as Table.Briefings has explained, is moving much closer with a new, potentially CDU-led federal government.
The damage in California is not only rising due to increasing weather extremes but also due to real estate development: More and more people are moving to areas threatened by wildfires. The loss amounts are also rising because more and more valuable goods are being insured. Other causes of fires include careless handling of fire or insufficient resources and vehicles for the fire departments.
For most experts, a major cause of the Los Angeles fire disaster is climate change, which is particularly evident in California. Although there are reports that climate change is not to blame for the disaster, future POTUS Donald Trump, who wants to reverse the climate policy of his predecessor, blames the disaster on the incompetence of the Democratic government in California.
However, the disaster in Los Angeles fits the global pattern: in 2024, the global warming limit of 1.5 degrees Celsius was exceeded for the first time. The damage caused by extreme weather is increasing worldwide, “climate change is showing its claws”, as Munich Re puts it. In California, too, the basic data speaks a clear language:
The traffic light coalition already wanted to regulate carbon capture and storage from industry and the electricity sector. However, its carbon management strategy is still stuck in the parliamentary process – it is unclear whether it will be adopted with the help of the CDU/CSU.
The CDU/CSU also wants to “legally enable” CCS for the energy sector in order to capture CO2 “in significant quantities”. The party wants to “vigorously promote CCS technologies and applications” and describes them as a “technologically mature and feasible option“, according to a discussion paper published by the parliamentary group. Jens Spahn (CDU) said that CCS should also be used in coal-fired power plants as part of the coalition’s carbon management strategy. The FDP also wants to “enable CCS as a non-discriminatory climate protection option”. This would mean using it beyond the sectors that are difficult to decarbonize (“hard-to-abate”), for example in coal-fired power plants.
A CCS law or a carbon management strategy could be implemented with a simple majority in the Bundestag. The CDU/CSU recently signaled that it would still approve the carbon management strategy of the broken coalition government in the Bundestag. However, parts of the SPD and the Greens no longer appear to support the use of CCS in gas-fired power plants, which the strategy envisages. The FDP had insisted on this in the coalition government. Minister Robert Habeck had accommodated the Liberals with this step.
The coalition’s carbon management strategy does not include CCS for coal-fired power plants. This demand would be a major point of contention in a black-green coalition. The Greens would very probably not go along with it, as its use in coal-fired power plants would contradict the coal phase-out. Widespread use of CCS would also be controversial in a CDU/CSU-SPD coalition. In its program, the SPD advocates “CO2 avoidance before capture”.
CCS is not considered a mature technology by experts. Only 50 plants are in operation worldwide. For gas and coal-fired power plants, there are only five plants, as the industry-oriented Global CCS Institute writes in its status report from November 2024. Many CCS projects are less effective than planned: A CCS plant at a coal-fired power plant in Houston has only captured seven percent of the power plant’s CO2 emissions, whereas 90 percent was planned. According to the operators, a coal CCS plant in Canada has captured around 50 percent – 90 percent was planned.
As it will take several years to build the CCS infrastructure, no emission reductions are to be expected in the short term. If companies withhold investments in other decarbonization technologies for CCS, such reductions could even be delayed.
The larger the CO2 transport infrastructure and storage sites become as demand increases, the higher the costs and the risk of leaks. The carbon management strategy of the traffic light coalition envisages a privately operated pipeline network. There is no official information on the length, but a study by the German Cement Works Association finds that 4,800 kilometers are necessary.
Transportation and storage in the seabed is associated with high costs. Industry associations such as the BDI are therefore also proposing storage on land, as it would be around 50 percent cheaper. However, this is highly controversial among environmentalists and local residents, which would likely lead to conflicts and protests. The storage of CO2 in Germany and the export of CO2 is currently still prohibited. Minister Robert Habeck wanted to enable offshore storage in Germany. For transportation abroad, Germany would have to ratify an amendment to the London Protocol. Norway recently completed the “Northern Lights” project in order to be able to import and store CO2 from European industry.
The German government does not publish precise data on the location of potential German CO2 storage sites. By the end of last year, Germany, like all EU states, had to report data on potential storage sites in accordance with the Net-Zero Industry Act (NZIA). The German government let this deadline pass, as the Federal Ministry of Economic Affairs confirmed at the request of Table.Briefings, because “under current law, such storage sites cannot be approved at present”, a spokeswoman said.
The climate benefit of CCS at coal-fired power plants would be questionable and possibly associated with high investment costs. The CEO of Leag, Torsten Kramer, therefore rejects the technology for coal-fired power plants: “The debate is over for pure lignite-based power generation. The volumes of CO2 we emit […] could only be transported via an exclusive pipeline network. These are costs and investments that can no longer be controlled.”
Other stakeholders see things differently: last week, the coal importers’ association called for carbon capture to be made possible for hard coal-fired power plants too: It is not reasonable to allow CCS/CCU for the operation of gas-fired power plants but not for coal-fired power plants. The association also includes large energy companies such as EnBW, Uniper, Steag and Trianel, the chemical park operator Currenta and Deutsche Bahn.
The FDP wants to include negative emissions in emissions trading and “free certificates” for companies that “remove greenhouse gases from the atmosphere through reforestation or technical methods”. However, the cost of one ton of captured CCS is higher than the price of CO2 certificates.
So far, there is no business model for CCS. Experts say that long-term subsidies would be needed to build the transportation infrastructure and storage facilities. In a study, Greenpeace estimates costs of €39 to €81 billion by 2045. In addition, the risks of CO2 leaks during transportation and storage should be covered by the state. The UK, for example, plans to provide almost 22 billion pounds over the next 25 years to build the infrastructure and two CO2 storage facilities in the North Sea.
The use of CCS in coal-fired power plants is unrealistic. Expensive retrofitting for coal-fired power plants that will only remain on the grid for a few more years anyway is not economically viable and would neither lower electricity prices nor significantly reduce the power plants’ CO2 emissions. It is unclear whether other industrial sectors besides those that are difficult to decarbonize (cement and lime, waste incineration, parts of the chemical industry, aviation industry) would also rely on CCS. In the steel and chemical industries, innovations could make CCS unnecessary. Plans for CCS on land would probably lead to major protests. Contribution: Manuel Berkel
Further parts of the fact check series: “Shifting the 2045 climate target to 2050“.
MEPs from the EPP have complained to Commission President Ursula von der Leyen about a concession to the Greens in the mission letter for the new Energy Commissioner Dan Jørgensen. At his parliamentary hearing, Jørgensen had shown himself to be open to a renewables target for 2040.
After the college was confirmed by the MPs, von der Leyen amended several mission letters and also set the target for renewables. This was seen as a concession to the Greens in order to secure von der Leyen’s re-election.
“This amendment thus undermines the validity of the confirmation given to Mr. Jørgensen. It is imperative to restore his mission letter in the version available at the time of his hearing,” write 14 industrial politicians from the EPP led by French MEP François-Xavier Bellamy. The signatories also include CDU MEPs Andrea Wechsler and Hildegard Bentele.
France and other nuclear states in the Council had also called for a rejection of a new renewables target for 2040. The parliamentarians also argue with the principle of technology neutrality and the right of member states to freely determine their energy mix – including decarbonization. “They must be able to achieve this goal by relying on low-carbon energy sources other than renewables,” the letter states.
Wechsler is focusing in particular on the capture and storage of carbon dioxide. “We will have to deal with CCS because CCS must play a significant role in decarbonization in Europe,” Wechsler told Table.Briefings. For energy generation, the Union has so far spoken out in favor of CCS for gas-fired power plants and for the production of blue hydrogen.
However, the openness of the technology is kindling desires. On Friday, the coal importers’ association called for carbon capture to be made possible for hard coal-fired power plants too: It was not reasonable to allow CCS/CCU for the operation of gas-fired power plants but not for coal-fired power plants. The association includes energy companies such as EnBW, Uniper, Steag and Trianel, the chemical park operator Currenta and Deutsche Bahn.
The expansion of renewables in the EU slowed down last year. Although solar energy still recorded an increase of 65.5 gigawatts (GW), the growth rate fell sharply according to SolarPower Europe. WindEurope reported a decline in installation figures on Friday.
While 16.2 GW were added in the EU in 2023, this figure fell to just 13 GW last year. In order for the EU to achieve its energy targets, it would actually have to reach 30 GW per year, according to the association. In Germany, on the other hand, approvals for wind turbines have recently increased significantly – partly due to shortened planning procedures.
However, WindEurope is sobered by the fact that the approval situation across the EU has actually worsened by 2024. Many member states have not yet transposed the new simplifications under the Renewable Energy Directive into national law.
In addition, more than 500 GW of wind projects in the EU are currently waiting for grid connection commitments. One prominent example is the completed offshore wind farm Borkum Riffgrund 3, which Tennet will not be able to connect to the grid until 2026.
Electrification is not keeping pace with the expansion of renewables, which is why negative exchange prices are occurring more frequently. The economic viability of many renewable energy projects is therefore in question, Axpo CEO Christoph Brand told Bloomberg. The electrification plan announced by the EU Commission cannot come quickly enough, WindEurope confirmed on Friday.
The Copernicus Global Climate Highlights Report 2024, which was also published on Friday, shows that last year was the warmest year since records began. And it will be the first year in which the annual global average temperature is 1.5 degrees Celsius above pre-industrial levels.
Last year was also the warmest on record for all continental regions, including Europe, with the exception of Antarctica and Australasia. The European continent has warmed twice as fast as the global average since the 1980s, making it the fastest warming continent on Earth.
One of the key sectors in achieving the climate targets is the construction sector. It is still one of the biggest sources of CO2 emissions. For the fourth year in a row, Germany has missed its sector targets on the road to climate neutrality. That is the first piece of bad news.
The second is that the construction sector is also doing badly economically, and this also has consequences for the climate targets. Because if we build and renovate too little, the transformation of the sector will fail.
There are many reasons for the poor situation. Among the most important are high prices and interest rates, complicated building regulations, barely comprehensible subsidy programs and, last but not least, the uncertainty caused by political debates.
Over the past ten years, construction prices for residential buildings have risen by 65 percent. Nowhere else in Europe are ancillary building costs higher. As if that weren’t enough, building in Germany is also too complicated: The sector is drowning in a flood of regulations and standards. In addition to the almost 3,900 building standards, there are 16 state building regulations and an unmanageable number of municipal regulations. The Fraunhofer Institute for Building Physics estimates that building regulations have quadrupled since 1990.
Companies and private individuals who are not deterred by this still need to get an overview of the overly complex funding landscape with more than 3,000 different funding programs. Added to this are the increased interest costs as a result of the energy price crisis and the uncertainty caused by the debate on the Building Energy Act (GEG). As a result, most construction or renovation projects are currently being shelved.
In the past three years, droughts and floods in Germany have destroyed around €90 billion in property values. This corresponds to the cost of fully renovating around 300,000 houses. More and more banks and insurers are finding that climate risk analysis tools show weaknesses in the comparison between database results and real climate events – in other words, the risks of climate change are underestimated.
Experts have long agreed that if we want to boost the construction industry, increase the number of building renovations and bring the climate targets back within reach, the sector must receive planning certainty from politicians again for investment decisions. The KlimaWirtschaft Foundation shows how this can be achieved in a new position paper prepared in cooperation with the Fraunhofer Institute for Building Physics IBP.
The EU Energy Performance of Buildings Directive (EPBD) was adopted in 2024. The EPBD forms the Europe-wide framework for the transformation of the sector and contains a wealth of regulations that must be transposed into German law by May 2026. This requires a reform of the GEG.
A serious election promise to the construction industry would be to present a coherent timetable for the implementation of the directive in the first 100 days of the new federal government and thus provide private building owners and companies with the planning security they urgently need. On the other hand, the widely demanded reversal of the Heating Act would be a fatal signal for the industry in the medium term.
The next German government should also simplify the financial support for the climate-neutral transformation of the building sector and make it easier to plan. In recent years, individual funding programs have repeatedly been discontinued overnight, while others have hardly been called up. This is why a manageable number of effective funding programs are needed that last for at least 36 months. This also ensures sufficient planning security for companies, private building owners, energy consultants, and architects. And it prevents the funding that has been budgeted for from no longer being available at the start of construction.
Many companies are already anticipating the construction turnaround in Germany. They are investing in digitalization, AI, new manufacturing and assembly processes, and innovative, recyclable construction products. With these building products, building materials, construction methods, and processes, we could establish a global pioneering role for German building material producers and construction companies.
It is time to show progressive companies a clear perspective and provide them with targeted support instead of continuing to unsettle the industry with tough political debates about the boiler room.
Kolja Zajicek is Senior Policy Advisor at the Climate Economy Foundation. His work focuses on the transformation of the economy, climate legislation, and the building sector.
The images from Los Angeles and the surrounding area look like something from one of the worst climate disaster dystopias. But what do the forest fires have to do with the climate crisis? Bernhard Pötter analyzes this today. However, the question that is being asked out loud in California is: Is climate damage blowing up insurance systems even in rich countries?
In our series of climate fact checks for the German parliamentary elections, today we look at the proposals and discussions surrounding CCS. Nico Beckert summarizes the state of the debate and explains why even the coal company LEAG thinks little of CCS for coal-fired power plants.
Manuel Berkel also explains the current debates on the expansion of renewables in the EU and what problems there are at European level with the expansion of wind energy.
Stay tuned with us!
The devastating forest fires in Los Angeles have not only killed many people and devastated the infrastructure of the urban landscape. The fires are also turning into one of the costliest natural disasters in US history. They raise the question of whether the risks of the climate crisis can still be covered by insurance, even in a wealthy region of one of the richest countries in the world. After all, the immense material damage in California and other US states poses an acute threat to the system of insurance and reinsurance of property values.
According to the authorities, the many fires in the Los Angeles area have so far claimed 24 lives, destroyed around 12,000 buildings, and displaced around 150,000 people as of Monday afternoon. 7,500 firefighters and aid workers are battling the flames, which are being fanned by unusually strong winds from the mountains. After a brief recovery, these winds and thus possibly also the fires should increase again from Tuesday.
An initial overview shows that the damage could well exceed all previous losses from forest and bushfires in the USA at more than USD 50 billion. In contrast to the approximately USD 20 billion in damage caused by the 2018 fires, the Democratic Governor of California, Gavin Newsom, expects the fire to be the “worst natural disaster” in the USA in terms of costs. The weather service AccuWeather even expects total damages of 250 to 275 billion dollars if secondary effects such as missed work time or interrupted supply chains are included.
In addition, many homeowners are not or no longer insured against fire – partly because their insurance companies no longer want to bear this risk. For years – and especially after the Camp Fire disaster in 2018 – the two insurance companies State Farm and Allstate have been reducing their fire insurance policies in California, according to a report in the New Yorker. Just last year, they terminated around 1,500 policies in the Pacific Palisades district, where one of the devastating fires started.
Last year, the major insurers in California canceled or did not renew the fire insurance policies of tens of thousands of property owners – including many in the areas now affected. The reason: rising losses on the one hand and, on the other, legal regulations that set tight limits on insurers’ pricing. The state regulator Ricardo Lara only changed these restrictive rules shortly before the turn of the year. Insurers are now allowed to do things differently than before:
These measures were intended to revive the market for private property insurance in California. The L.A. disaster has therefore also come at an extremely unfavorable time economically.
As in other US states, companies are increasingly withdrawing from fire, flood and storm insurance, for example in US states on the east coast, mainly due to rising climate-related risks. Publicly subsidized insurance companies then have to step in – but their profitability is also under threat in some cases.
In California, the state-supported FAIR insurance scheme was intended to close this gap. Since 2023 alone, it has increased the number of its policies by 40 percent – owners who failed with private programs found protection here. FAIR now covers 450 billion US dollars in values and faces the question of whether it should make the policies significantly more expensive for individual owners or whether the state should ultimately use taxpayers’ money to cover these private property risks – and whether this is financially feasible. There is also a similar debate in Germany and Europe about compulsory insurance against natural hazards – which, as Table.Briefings has explained, is moving much closer with a new, potentially CDU-led federal government.
The damage in California is not only rising due to increasing weather extremes but also due to real estate development: More and more people are moving to areas threatened by wildfires. The loss amounts are also rising because more and more valuable goods are being insured. Other causes of fires include careless handling of fire or insufficient resources and vehicles for the fire departments.
For most experts, a major cause of the Los Angeles fire disaster is climate change, which is particularly evident in California. Although there are reports that climate change is not to blame for the disaster, future POTUS Donald Trump, who wants to reverse the climate policy of his predecessor, blames the disaster on the incompetence of the Democratic government in California.
However, the disaster in Los Angeles fits the global pattern: in 2024, the global warming limit of 1.5 degrees Celsius was exceeded for the first time. The damage caused by extreme weather is increasing worldwide, “climate change is showing its claws”, as Munich Re puts it. In California, too, the basic data speaks a clear language:
The traffic light coalition already wanted to regulate carbon capture and storage from industry and the electricity sector. However, its carbon management strategy is still stuck in the parliamentary process – it is unclear whether it will be adopted with the help of the CDU/CSU.
The CDU/CSU also wants to “legally enable” CCS for the energy sector in order to capture CO2 “in significant quantities”. The party wants to “vigorously promote CCS technologies and applications” and describes them as a “technologically mature and feasible option“, according to a discussion paper published by the parliamentary group. Jens Spahn (CDU) said that CCS should also be used in coal-fired power plants as part of the coalition’s carbon management strategy. The FDP also wants to “enable CCS as a non-discriminatory climate protection option”. This would mean using it beyond the sectors that are difficult to decarbonize (“hard-to-abate”), for example in coal-fired power plants.
A CCS law or a carbon management strategy could be implemented with a simple majority in the Bundestag. The CDU/CSU recently signaled that it would still approve the carbon management strategy of the broken coalition government in the Bundestag. However, parts of the SPD and the Greens no longer appear to support the use of CCS in gas-fired power plants, which the strategy envisages. The FDP had insisted on this in the coalition government. Minister Robert Habeck had accommodated the Liberals with this step.
The coalition’s carbon management strategy does not include CCS for coal-fired power plants. This demand would be a major point of contention in a black-green coalition. The Greens would very probably not go along with it, as its use in coal-fired power plants would contradict the coal phase-out. Widespread use of CCS would also be controversial in a CDU/CSU-SPD coalition. In its program, the SPD advocates “CO2 avoidance before capture”.
CCS is not considered a mature technology by experts. Only 50 plants are in operation worldwide. For gas and coal-fired power plants, there are only five plants, as the industry-oriented Global CCS Institute writes in its status report from November 2024. Many CCS projects are less effective than planned: A CCS plant at a coal-fired power plant in Houston has only captured seven percent of the power plant’s CO2 emissions, whereas 90 percent was planned. According to the operators, a coal CCS plant in Canada has captured around 50 percent – 90 percent was planned.
As it will take several years to build the CCS infrastructure, no emission reductions are to be expected in the short term. If companies withhold investments in other decarbonization technologies for CCS, such reductions could even be delayed.
The larger the CO2 transport infrastructure and storage sites become as demand increases, the higher the costs and the risk of leaks. The carbon management strategy of the traffic light coalition envisages a privately operated pipeline network. There is no official information on the length, but a study by the German Cement Works Association finds that 4,800 kilometers are necessary.
Transportation and storage in the seabed is associated with high costs. Industry associations such as the BDI are therefore also proposing storage on land, as it would be around 50 percent cheaper. However, this is highly controversial among environmentalists and local residents, which would likely lead to conflicts and protests. The storage of CO2 in Germany and the export of CO2 is currently still prohibited. Minister Robert Habeck wanted to enable offshore storage in Germany. For transportation abroad, Germany would have to ratify an amendment to the London Protocol. Norway recently completed the “Northern Lights” project in order to be able to import and store CO2 from European industry.
The German government does not publish precise data on the location of potential German CO2 storage sites. By the end of last year, Germany, like all EU states, had to report data on potential storage sites in accordance with the Net-Zero Industry Act (NZIA). The German government let this deadline pass, as the Federal Ministry of Economic Affairs confirmed at the request of Table.Briefings, because “under current law, such storage sites cannot be approved at present”, a spokeswoman said.
The climate benefit of CCS at coal-fired power plants would be questionable and possibly associated with high investment costs. The CEO of Leag, Torsten Kramer, therefore rejects the technology for coal-fired power plants: “The debate is over for pure lignite-based power generation. The volumes of CO2 we emit […] could only be transported via an exclusive pipeline network. These are costs and investments that can no longer be controlled.”
Other stakeholders see things differently: last week, the coal importers’ association called for carbon capture to be made possible for hard coal-fired power plants too: It is not reasonable to allow CCS/CCU for the operation of gas-fired power plants but not for coal-fired power plants. The association also includes large energy companies such as EnBW, Uniper, Steag and Trianel, the chemical park operator Currenta and Deutsche Bahn.
The FDP wants to include negative emissions in emissions trading and “free certificates” for companies that “remove greenhouse gases from the atmosphere through reforestation or technical methods”. However, the cost of one ton of captured CCS is higher than the price of CO2 certificates.
So far, there is no business model for CCS. Experts say that long-term subsidies would be needed to build the transportation infrastructure and storage facilities. In a study, Greenpeace estimates costs of €39 to €81 billion by 2045. In addition, the risks of CO2 leaks during transportation and storage should be covered by the state. The UK, for example, plans to provide almost 22 billion pounds over the next 25 years to build the infrastructure and two CO2 storage facilities in the North Sea.
The use of CCS in coal-fired power plants is unrealistic. Expensive retrofitting for coal-fired power plants that will only remain on the grid for a few more years anyway is not economically viable and would neither lower electricity prices nor significantly reduce the power plants’ CO2 emissions. It is unclear whether other industrial sectors besides those that are difficult to decarbonize (cement and lime, waste incineration, parts of the chemical industry, aviation industry) would also rely on CCS. In the steel and chemical industries, innovations could make CCS unnecessary. Plans for CCS on land would probably lead to major protests. Contribution: Manuel Berkel
Further parts of the fact check series: “Shifting the 2045 climate target to 2050“.
MEPs from the EPP have complained to Commission President Ursula von der Leyen about a concession to the Greens in the mission letter for the new Energy Commissioner Dan Jørgensen. At his parliamentary hearing, Jørgensen had shown himself to be open to a renewables target for 2040.
After the college was confirmed by the MPs, von der Leyen amended several mission letters and also set the target for renewables. This was seen as a concession to the Greens in order to secure von der Leyen’s re-election.
“This amendment thus undermines the validity of the confirmation given to Mr. Jørgensen. It is imperative to restore his mission letter in the version available at the time of his hearing,” write 14 industrial politicians from the EPP led by French MEP François-Xavier Bellamy. The signatories also include CDU MEPs Andrea Wechsler and Hildegard Bentele.
France and other nuclear states in the Council had also called for a rejection of a new renewables target for 2040. The parliamentarians also argue with the principle of technology neutrality and the right of member states to freely determine their energy mix – including decarbonization. “They must be able to achieve this goal by relying on low-carbon energy sources other than renewables,” the letter states.
Wechsler is focusing in particular on the capture and storage of carbon dioxide. “We will have to deal with CCS because CCS must play a significant role in decarbonization in Europe,” Wechsler told Table.Briefings. For energy generation, the Union has so far spoken out in favor of CCS for gas-fired power plants and for the production of blue hydrogen.
However, the openness of the technology is kindling desires. On Friday, the coal importers’ association called for carbon capture to be made possible for hard coal-fired power plants too: It was not reasonable to allow CCS/CCU for the operation of gas-fired power plants but not for coal-fired power plants. The association includes energy companies such as EnBW, Uniper, Steag and Trianel, the chemical park operator Currenta and Deutsche Bahn.
The expansion of renewables in the EU slowed down last year. Although solar energy still recorded an increase of 65.5 gigawatts (GW), the growth rate fell sharply according to SolarPower Europe. WindEurope reported a decline in installation figures on Friday.
While 16.2 GW were added in the EU in 2023, this figure fell to just 13 GW last year. In order for the EU to achieve its energy targets, it would actually have to reach 30 GW per year, according to the association. In Germany, on the other hand, approvals for wind turbines have recently increased significantly – partly due to shortened planning procedures.
However, WindEurope is sobered by the fact that the approval situation across the EU has actually worsened by 2024. Many member states have not yet transposed the new simplifications under the Renewable Energy Directive into national law.
In addition, more than 500 GW of wind projects in the EU are currently waiting for grid connection commitments. One prominent example is the completed offshore wind farm Borkum Riffgrund 3, which Tennet will not be able to connect to the grid until 2026.
Electrification is not keeping pace with the expansion of renewables, which is why negative exchange prices are occurring more frequently. The economic viability of many renewable energy projects is therefore in question, Axpo CEO Christoph Brand told Bloomberg. The electrification plan announced by the EU Commission cannot come quickly enough, WindEurope confirmed on Friday.
The Copernicus Global Climate Highlights Report 2024, which was also published on Friday, shows that last year was the warmest year since records began. And it will be the first year in which the annual global average temperature is 1.5 degrees Celsius above pre-industrial levels.
Last year was also the warmest on record for all continental regions, including Europe, with the exception of Antarctica and Australasia. The European continent has warmed twice as fast as the global average since the 1980s, making it the fastest warming continent on Earth.
One of the key sectors in achieving the climate targets is the construction sector. It is still one of the biggest sources of CO2 emissions. For the fourth year in a row, Germany has missed its sector targets on the road to climate neutrality. That is the first piece of bad news.
The second is that the construction sector is also doing badly economically, and this also has consequences for the climate targets. Because if we build and renovate too little, the transformation of the sector will fail.
There are many reasons for the poor situation. Among the most important are high prices and interest rates, complicated building regulations, barely comprehensible subsidy programs and, last but not least, the uncertainty caused by political debates.
Over the past ten years, construction prices for residential buildings have risen by 65 percent. Nowhere else in Europe are ancillary building costs higher. As if that weren’t enough, building in Germany is also too complicated: The sector is drowning in a flood of regulations and standards. In addition to the almost 3,900 building standards, there are 16 state building regulations and an unmanageable number of municipal regulations. The Fraunhofer Institute for Building Physics estimates that building regulations have quadrupled since 1990.
Companies and private individuals who are not deterred by this still need to get an overview of the overly complex funding landscape with more than 3,000 different funding programs. Added to this are the increased interest costs as a result of the energy price crisis and the uncertainty caused by the debate on the Building Energy Act (GEG). As a result, most construction or renovation projects are currently being shelved.
In the past three years, droughts and floods in Germany have destroyed around €90 billion in property values. This corresponds to the cost of fully renovating around 300,000 houses. More and more banks and insurers are finding that climate risk analysis tools show weaknesses in the comparison between database results and real climate events – in other words, the risks of climate change are underestimated.
Experts have long agreed that if we want to boost the construction industry, increase the number of building renovations and bring the climate targets back within reach, the sector must receive planning certainty from politicians again for investment decisions. The KlimaWirtschaft Foundation shows how this can be achieved in a new position paper prepared in cooperation with the Fraunhofer Institute for Building Physics IBP.
The EU Energy Performance of Buildings Directive (EPBD) was adopted in 2024. The EPBD forms the Europe-wide framework for the transformation of the sector and contains a wealth of regulations that must be transposed into German law by May 2026. This requires a reform of the GEG.
A serious election promise to the construction industry would be to present a coherent timetable for the implementation of the directive in the first 100 days of the new federal government and thus provide private building owners and companies with the planning security they urgently need. On the other hand, the widely demanded reversal of the Heating Act would be a fatal signal for the industry in the medium term.
The next German government should also simplify the financial support for the climate-neutral transformation of the building sector and make it easier to plan. In recent years, individual funding programs have repeatedly been discontinued overnight, while others have hardly been called up. This is why a manageable number of effective funding programs are needed that last for at least 36 months. This also ensures sufficient planning security for companies, private building owners, energy consultants, and architects. And it prevents the funding that has been budgeted for from no longer being available at the start of construction.
Many companies are already anticipating the construction turnaround in Germany. They are investing in digitalization, AI, new manufacturing and assembly processes, and innovative, recyclable construction products. With these building products, building materials, construction methods, and processes, we could establish a global pioneering role for German building material producers and construction companies.
It is time to show progressive companies a clear perspective and provide them with targeted support instead of continuing to unsettle the industry with tough political debates about the boiler room.
Kolja Zajicek is Senior Policy Advisor at the Climate Economy Foundation. His work focuses on the transformation of the economy, climate legislation, and the building sector.
