German energy sector remains exemplary in climate protection

08.01.2025

Source: E & M powernews

At the start of the year, the Agora Energiewende think tank published its annual analysis of German emissions trends in 2024. These fell, but not enough, it concluded.

Germany is meeting its climate protection targets in the energy sector, but the lack of progress in buildings and transport means it is still at risk of failing. This is how Simon Müller, Director Germany at Agora Energiewende, summarized the situation to journalists on 7 January.

Germany's greenhouse gas emissions fell by 18 million tons or three percent in 2024 compared to the previous year. A total of 656 million tons of CO2 equivalents were emitted. This represents a reduction of 48 percent compared to the reference year 1990.

According to the think tank, this was mainly due to new records in electricity generation from renewable sources and a historic low in coal-fired power generation. However, the necessary progress has not been made in the areas of buildings and transport. In order to achieve the target of a 65 percent reduction in emissions by 2030, around twice as many emissions would have to be avoided each year, Agora therefore warned.

EU targets missed

Due to a lack of reduction in buildings and transport, Germany missed the European climate protection targets agreed as part of the Effort Sharing Regulation (ESR) by an estimated 12 million tons of CO2.

Other reasons for the decline in emissions were mild weather conditions and weaker economic performance. Müller regretted: "Unlike in the electricity sector, there was no structural progress in the demand sectors of industry, buildings and transport." Investments in climate-neutral technologies such as heat pumps and electric cars were actually down on the previous year.

In industry, emissions rose slightly by three million tons of CO2 last year despite the economic stagnation, particularly due to increased consumption of fossil fuels in heavy industry. The slight reduction in emissions in the building sector of two million tons of CO2 was mainly due to reduced heating energy requirements as a result of mild weather. If the weather had remained the same compared to 2023, emissions would have actually increased.

In the transport sector, there was also only a slight reduction of 2 million tons of CO2 compared to the previous year - mainly due to lower truck traffic as a result of the economic weakness. At the same time, however, car traffic increased. Overall, with emissions of 144 million tons of CO2, the transport sector fell well short of the annual target defined in the Climate Protection Act by 19 million tons of CO2.

"By missing the target for buildings and transport, the German government will have to buy emission allowances from other EU member states in the foreseeable future, otherwise there is a risk of fines - a budget risk worth billions," warned Müller.

Recommendations to the new federal government

"In the next legislative period, it is important to transfer the transformation momentum from the electricity sector to the demand sectors," demanded Müller. Political measures that ensure social balance and enable households and companies to make the transition to climate neutrality are central to this. "The coming legislative period is crucial in order to make the necessary investments for the national and European climate targets," reminded the Agora Director.

In addition, the potential of increasing electricity generation from renewable sources must be better utilized. "More flexibility such as electricity storage, faster installation of smart meters and incentives for more flexible demand from large industrial consumers," Müller said, citing these as the key to achieving this. In 2024, the installed capacity of battery storage systems overtook that of pumped storage power plants for the first time.

Flexible consumption could reduce the need for flexible new power plants, but some need to be built and time is running out. In case of doubt, the Federal Network Agency would have to leave old power plants in reserve, which would delay the coal phase-out, the Agora experts fear. A reform of the grid fees is crucial because the current price structure, especially for industry, is a real brake on flexibility.

Author: Susanne Harmsen