“Support for the EU Green Deal”: PIK statement on the coalition agreement in Germany

“It is good to see that the new coalition is committed to German and European climate targets. Particularly important is their adoption of the second European Union emissions trading scheme (EU ETS2) for the buildings and transport sectors as a central policy instrument from 2027 onwards. Currently, there are voices in Warsaw, Prague and Bratislava, for example, calling for a postponement. It is important that the new German government support the EU Green Deal and works to ensure that ETS2 comes on time; it can make concessions to partner countries when it comes to the design.”

“The coalition agreement also explicitly emphasises the need for carbon leakage protection to maintain our industrial value added. The instrument for this is the flanking of EU-wide carbon pricing with climate tariffs, the so-called Carbon Border Adjustment Mechanism (CBAM), which will be financially implemented step by step from 2026. It is not only necessary for ensuring European industry is not disadvantaged by international competition, but also to strengthen international climate cooperation – this applies despite the US’s climate policy breakdown. The CBAM, as has already been demonstrated in the run-up to its implementation, also incentivises countries outside the EU to implement carbon pricing.”

“An important element of the EU Green Deal is the European interim climate target of reducing CO2 emissions by 90 percent by 2040 compared to 1990. It’s good that this is also being addressed in the coalition agreement. It is rightly understood as a net target – primarily through CO2 reduction, and to a limited extent through permanent and sustainable atmospheric carbon removal. Contrary to the coalition agreement, however, the EU interim target must be met entirely domestically. Climate protection efforts in non-European partner countries – namely the financing of carbon removal projects in the Global South on the basis of Article 6 of the Paris Agreement – are useful, but they need to be additional.”