Passed in 2019, Germany’s first climate law decreed that by 2030 carbon emissions must be cut by 55% (from 1990 levels) and laid out annual quotas for different sources of emissions. It also stated that Germany, like the rest of the EU, would decarbonise by 2050. The judges ruled, however, that this left too much to do after 2030, leaving future generations with an impossible task.
Angela Merkel’s coalition therefore increased the reduction target to 65%, and brought forward the net carbon-neutral date to 2045. Alongside accelerating the phase-out of coal and reducing emissions from heating, transport in particular will play a major part in this.
Stef Cornelis, Germany director at T&E, said: “It is hard to overstate the significance of this decision. It binds German governments to stricter targets and now it’s less about where we are going, and more how we’re going to get there. Transport has the most to catch up. It is therefore vital that Germany speeds up the transition to electric mobility for road vehicles, and clean fuels for other sectors like aviation and shipping.”
Germany’s transport sector alone will now have to find 10 million tonnes of emissions savings on top of the previous target. According to research commissioned by the environmental ministry, even with the -55% target, transport was on course to reach less than half of the necessary reduction by 2030.
A recent study by T&E offered a timely solution. Analysis commissioned by the group shows that if all new company cars were electric by 2030, it would reduce Germany’s car emissions by one-third, saving 27 million tonnes of CO2 – a sizeable chunk of the total emission savings needed for transport.
Cornelis added: “As company cars make up the majority of new cars in Germany, they offer an opportunity to accelerate the electric market. More electric company cars means millions more affordable electrics for all drivers, as they filter into the second-hand car market. If the government is looking for an easy way to meet new, stricter climate targets, making all new company cars electric by 2030 would be the perfect place to start.”
To get there, Germany should revise its taxation system and stop subsidising polluting cars, says T&E. Taxes on big, luxury company cars in Germany are very low compared to other European countries. Registrations of high emitting company cars in France, for example, are taxed more than €9,000 compared to just €1,500 in Germany. Average CO2 emissions for petrol and diesel company cars are 17% higher in Germany than in France as a result. Germany is also the only major European market where the uptake of electric cars is lower among company cars than private ones.
But Germany will still have to find emissions savings from elsewhere. It should support the EU to tighten its car and van CO2 standards in July, says T&E, to ensure the production of zero-emission vehicles continues throughout the decade. It will also need to support the development of clean fuels like e-kerosene for aviation, and hydrogen and ammonia for shipping by pushing for ambitious ReFuel EU Aviation and FuelEU Maritime mandates.
Germany’s emission levels are currently 40% lower than they were in 1990, meaning it will require a reduction of a further 25% over the next nine years.