Agreement on environmental policy big test for Berlin’s new government in the making

1. What happened ?

Federal elections were held in Germany on 26 September 2021 to elect the members of the 20th Bundestag, the German parliament. The Social Democrats (SPD; 25,7 % of total votes) won most seats and will very likely to form a new ruling coalition with Greens and Free Democratic (FDP) – first time in German history out of three parties.

To align their views on goals and measures regarding environmental sustainability is and will stay one of the most contested issues among the so-called “traffic light coalition” (Red = SPD, Yellow = FDP and Green(s))

2.  What‘s the background?

One of the biggest divergences concerns the definition of sustainable energy and related technologies.

While the SPD and FDP both opt for „blue hydrogen“ and „ turquoise hydrogen“ – hydrogen still produced with fossil fuels but also with carbon capture and storage as so-called “bridge technologies”, the Greens aim for a fully renewable energy hydrogen production. The Greens rigorously reject to recognize anything related to both nuclear energy and gas as sustainable energy technologies. The party which has emerged out of the peace/environmental movement in the 1970s and 1980s, is under significant pressure to secure some of its core goals via a vis their supporters

3. What does this mean for you?

Until end of 2021, the EU Commission is to decide on what role and contributions natural gas and nuclear energy could make to climate change mitigation as part of the EU Taxonomy (classification of sustainable economic activities) adopted in July 2021. How Europe’s biggest economy positions itself, will be highly significant. Regarding nuclear power, Spain, Denmark, Austria, and Luxemburg have joined Germany in conveying concerns to the EU Commission, objection regarding the inclusion of technologies/ activities involving natural gas is considerably less widespread.

4. How ESG Next can help you on that

ESG Next will closely monitor and analyze the second/complementary to be adopted act to the Taxonomy of the EU Commission which is expected to be published at the beginning 2022.