Renewables reduce electricity prices and emissions - no progress in buildings and transport

07.01.2025

Source: Agora Energiewende

German greenhouse gas emissions fell significantly in 2024 thanks to a record level of renewables and low coal-fired power generation.

Germany exceeded its climate target, but fell short of the EU targets due to a lack of progress in the areas of buildings and transport. Investment incentives for climate-neutral technologies and secure electricity prices are necessary in order to transfer the positive development in the electricity sector to other sectors.

In 2024, greenhouse gas emissions fell by 18 million tons to 656 million tons of CO₂, which represents a historic low. This is primarily due to the decline in coal-fired power generation and the growth in renewable energies. Nevertheless, the European climate targets were missed as there was hardly any progress in the areas of industry, buildings and transport.

In the energy sector, higher electricity generation from renewables (+12 TWh) and increased imports contributed to the reduction in emissions. The price of electricity fell by 18%, which benefits consumers. Another factor was the greater volatility of electricity prices due to higher generation from renewables.

Emissions in the demand sectors of industry, buildings and transport remained virtually unchanged. Investments in climate-neutral technologies such as heat pumps and electric cars declined. The climate target was missed in the transport sector in particular, as car traffic increased and the number of new electric cars fell short of expectations.

For a successful transformation, it is important to create investment security and incentives for climate-neutral technologies. An effective policy mix and a solid financing basis are crucial to keeping Germany on track.

Further information can be found at: The energy transition in Germany: State of play 2024