Key Messages on German Climate and Energy Policy

The German government knows that a progressive climate policy is vital for a healthy economy. It leads to economic growth, employment, industrial innovation and greenhouse gas emission reductions. To achieve a low carbon growth path, Germany has set itself a set of ambitious climate and energy goals, which exceed those of the E.U.:

• A 40% reduction in GHG emissions by 2020 compared to 1990 levels 
• Renewable energy will provide 18 percent of final energy consumption (35 percent renewable energy in electricity generation by 2020). 
• Energy efficiency will be doubled by 2020 compared to 1990 levels (this equals a 3 percent increase p.a.).
• Cogeneration (combined heat and power or CHP) will generate 25 percent of electricity by 2020.
• Renewable energies will provide for a 14 percent share in heat supply by 2020.

Germany has already met its 21 percent Kyoto emissions reductions target and in 2009, it emitted 28 percent less than in 1990.

How is Germany achieving these goals?

1. Electricity: Germany’s Feed-In Tariff System (EEG)

Germany’s feed-in tariff system encourages innovation and the development of production facilities and provides a basis for strong export capacities in the sector. Its main elements are:

• Grid operators must give priority to renewable energy
• A price guarantee exists for a period of 20 years and is regularly adapted according to the market situation, technological development (degression) and energy source
• EEG-costs are passed on to the consumer (currently about 2 Cent/kWh for private households; the average family (with energy use of 3.500 kWh/year) pays about 6 EUR (US$ 8) per month

The EU Commission has concluded that feed-in systems lead to more efficiency and lower prices compared to quota or bonus approaches due to long-term calculations.

Enlarge image The Federal Environment Agency headquarters in Dessau is an example of energy-efficient architecture. (© picture alliance / Arco Images G) 2. Heating and Cooling

The German market incentive program spent 500 million EUR on retrofitting existing buildings with heating from renewable energy in 2009, triggering an additional 2.6 billion EUR in private investments.

All buildings must now use renewable energies (biomass, solar- and geothermal energy), and financial rewards exist for feeding electricity from new combined heat and power (CHP) plants into the grid.

3. Energy Efficiency

All new and renovated buildings have achieved a 30 percent cut in energy use in 2009 since energy efficiency measures were first applied, and will achieve a further energy reduction of 30 percent by 2012.

As of 2010, new buildings may only consume 3 litres of heating oil per square metre and year, and home owners may apply for grants (worth a total of 1.4 billion EUR p.a.) and low priced credits. A further 600 million EUR p.a. mis available for educational institutions for supporting energy efficiency in old buildings.

Economic, social and energy security benefits of investing in low-carbon development 

Enlarge image A worker inspects a rotor blade at a wind turbine manufacturing facility in Germany. (© picture-alliance/ ZB) As of 2010, approximately 120 million tons of greenhouse gas emissions were avoided, and 370,000 jobs had been created in Germany’s renewable energy industry. Looking ahead, by 2020 the implementation of the climate package will have created 500,000 new jobs, and by 2030 this is set to increase to 800,000.

Germany’s share in environmental technology is 16% of the total world market.

Annual avoided fossil energy imports will be worth approximately 22 billion euros by 2020.

Finally, estimates suggest that by 2030, Germany’s national GDP is likely to increase by around 20 billion euros annually and that its national debt would be 180 billion euros lower than without these measures.

Germany’s energy future

In July 2011, a new 40-year Energy Concept for Germany was presented by Chancellor Angela Merkel in Berlin. She hailed it as "a revolution in the field of energy supply" that would create the most efficient and environmentally sound energy system worldwide in Germany.

This energy plan makes Germany the first country not only to state the goal of keeping global warming within a limited range and reducing emissions, but also to outline concrete steps for getting there.

The focus will remain on increasing the use of renewable energies further - the average share of renewable energies in the electricity generation has alredy reached 20.3 percent in the first half of 2011.

Increasing the energy efficiency of buildings will also play a vital role, as buildings are responsible for 40 percent of our entire energy consumption and 30 percent of our greenhouse gas emissions.

To reduce carbon emissions in the transport sector and develop electro-mobility, Germany’s goal is to put one million electric cars on the streets by 2020 as well as increasing the share of biofuels. With this energy plan, Germany’s energy supply will become the most efficient and the most environmentally sound worldwide, whilst remaining affordable for both households and businesses.