Germany
Photo by Ansgar Scheffold on Unsplash
Reluctant superpower seeks green absolution
In May 2021, the German Constitutional Court made headlines around the world: the country’s flagship climate change law, passed to great fanfare only two years previously, was found to be insufficiently ambitious to protect the constitutional rights of future generations. Angela Merkel’s centre-right coalition government was sent scrambling back to the drawing board, promising tougher targets and more aggressive decarbonisation.
The constitutional fight over climate illustrates several factors currently shaping Germany’s path towards sustainability and social justice. Firstly, Germany’s prosperity is built upon vast industrial and manufacturing power, especially in traditionally carbon-intensive sectors like automotives, chemicals and engineering, and the country’s mining and coal industries retain considerable political influence. Ranged against this is the country’s history as an ecological pioneer: eco-taxes on fossil fuels were first introduced in 1999, and from the early 2000s the Energiewende introduced massive state support for clean energy and renewables, arguably kickstarting the global boom in solar manufacturing which has accelerated ever since.
Successive governments have attempted a balancing act between Germany’s industrial history and its ambitions for a greener future; the 2021 court ruling perhaps suggests that this balance is now shifting. The ability of the court to intervene directly in legislative matters is also indicative of the country’s relatively rule-bound political culture, which places a high value on judicial process and achieving consensus through procedure.
The German economy also reflects this consensus-based approach. As the world’s fourth largest economy and an exporting powerhouse, Germany’s economic model nevertheless remains somewhat idiosyncratic. A post-war pioneer of the social market economy, West Germany sought to combine free market capitalism with generous social welfare, which over time gave rise to several uniquely German economic features: strong unions combined with harmonious labour relations; the Mitbestimmungsgesetz (codetermination law), requiring companies to reserve half their board seats for workers; a world-leading system of vocational training and apprenticeships; and the unusually broad economic base of numerous small, specialised and sometimes family-owned companies, the Mittelstand.
Although some of the most generous elements of Germany’s social welfare model have been diluted in recent decades (most notably under the Hartz IV reforms of 2003), Germany remains proof for many that the Anglo-Saxon model of laissez-faire deregulation is not the only path to prosperity. However, the other defining feature of German economics – its massive, decades-long trade surplus as self-declared Exportweltmeister – is far more controversial. Germany exports far more than it imports, resulting in a ~$300 billion annual surplus; this, combined with Germany’s deeply conservative attitude towards debt (balanced budgets are written into the constitution) has depressed incomes at home and driven up unemployment and debt abroad. Yet the appetite for addressing this imbalance amongst the German political class remains almost non-existent.
The 2021 German Federal elections have set Germany on a new political path after the 16-year chancellorship of Angela Merkel, but with a Social Democrat / Greens / Liberal coalition in power the precise direction of travel has yet to emerge. But it is unlikely that the Supreme Court’s recent ruling on the German path towards a green economy will be its last; and our assessments show any German green economy 'miracle' is in need of new energy.
Photo by Ansgar Scheffold on Unsplash
Policy Scores
Last updated 18 Dec 2025
Governance
National Green Economy Planning
Germany’s cross-economy framework is the Deutsche Nachhaltigkeitsstrategie (DNS) (2002; updated 2021; update process 2025), which integrates SDGs with indicators and reporting, and is complemented by climate-specific legislation (Klimaschutzgesetz) and programmes (e.g., Klimaschutzprogramm 2023). Together they steer the green transition across sectors with monitoring, though the DNS is a strategy rather than a single binding “green economy act.”
Germany’s cross-economy framework is the Deutsche Nachhaltigkeitsstrategie (DNS) (2002; updated 2021; update process 2025), which integrates SDGs with indicators and reporting, and is complemented by climate-specific legislation (Klimaschutzgesetz) and programmes (e.g., Klimaschutzprogramm 2023). Together they steer the green transition across sectors with monitoring, though the DNS is a strategy rather than a single binding “green economy act.”
Inclusive Corporate Governance
Germany has long-standing, mandatory worker participation in corporate governance under the Codetermination Act (Mitbestimmungsgesetz, 1976), which requires parity representation of employees on supervisory boards of companies with >2,000 employees and one-third employee seats in firms with 500–2,000 employees. Gender-balance rules apply to listed and co-determined companies via the Act on Equal Participation of Women and Men in Leadership Positions (FüPoG, 2015) and FüPoG II (2021), which include a 30% minimum for supervisory boards and introduce requirements for female representation on management boards of certain companies. At EU level, Directive (EU) 2022/2381 on gender balance in listed company boards entered into force with a transposition deadline of 28 December 2024; Germany’s existing regime already set extensive obligations, and federal guidance confirms alignment with the Directive’s 40%/33% targets. ESG disclosure and governance remain primarily driven by the German Corporate Governance Code (comply or explain) and EU rules (e.g., CSRD), rather than a national, binding ESG/SDG corporate strategy; there is no statutory requirement for board-level employee representation beyond codetermination nor for SDG-aligned board incentives.
Germany has long-standing, mandatory worker participation in corporate governance under the Codetermination Act (Mitbestimmungsgesetz, 1976), which requires parity representation of employees on supervisory boards of companies with >2,000 employees and one-third employee seats in firms with 500–2,000 employees. Gender-balance rules apply to listed and co-determined companies via the Act on Equal Participation of Women and Men in Leadership Positions (FüPoG, 2015) and FüPoG II (2021), which include a 30% minimum for supervisory boards and introduce requirements for female representation on management boards of certain companies. At EU level, Directive (EU) 2022/2381 on gender balance in listed company boards entered into force with a transposition deadline of 28 December 2024; Germany’s existing regime already set extensive obligations, and federal guidance confirms alignment with the Directive’s 40%/33% targets. ESG disclosure and governance remain primarily driven by the German Corporate Governance Code (comply or explain) and EU rules (e.g., CSRD), rather than a national, binding ESG/SDG corporate strategy; there is no statutory requirement for board-level employee representation beyond codetermination nor for SDG-aligned board incentives.
Participatory Policymaking
Germany requires Regulatory Impact Assessment with sustainability checks via the Gemeinsame Geschäftsordnung der Bundesministerien (GGO); Environmental Impact Assessment (UVPG) and Strategic Environmental Assessment apply to projects/plans. These instruments are well-established but are strongest for legislative drafts and permitting, with uneven coverage of ex-ante effects on specific marginalised groups across all policies.
Germany requires Regulatory Impact Assessment with sustainability checks via the Gemeinsame Geschäftsordnung der Bundesministerien (GGO); Environmental Impact Assessment (UVPG) and Strategic Environmental Assessment apply to projects/plans. These instruments are well-established but are strongest for legislative drafts and permitting, with uneven coverage of ex-ante effects on specific marginalised groups across all policies.
Beyond GDP
Germany maintains mature environmental-economic accounts (air emissions, environmental taxes, material flows) compiled by Destatis under Regulation (EU) 691/2011; these are updated and transmitted to Eurostat as satellite accounts to the national accounts. Complementary beyond-GDP initiatives include TEEB-DE work on ecosystem services and the National Welfare Index (NWI) developed in Germany’s policy debate. In 2024, the Kommission Zukunft Statistik (set up by Destatis) recommended a common indicator framework on welfare level and distribution. However, there is no evidence of a federal, comprehensive “national comprehensive wealth” framework covering human, social, natural, and produced/financial capital that is embedded into the core planning/budget cycle; existing efforts remain modular (SEEA modules, dashboards, studies) rather than an integrated wealth framework.
Germany maintains mature environmental-economic accounts (air emissions, environmental taxes, material flows) compiled by Destatis under Regulation (EU) 691/2011; these are updated and transmitted to Eurostat as satellite accounts to the national accounts. Complementary beyond-GDP initiatives include TEEB-DE work on ecosystem services and the National Welfare Index (NWI) developed in Germany’s policy debate. In 2024, the Kommission Zukunft Statistik (set up by Destatis) recommended a common indicator framework on welfare level and distribution. However, there is no evidence of a federal, comprehensive “national comprehensive wealth” framework covering human, social, natural, and produced/financial capital that is embedded into the core planning/budget cycle; existing efforts remain modular (SEEA modules, dashboards, studies) rather than an integrated wealth framework.
Finance
Green Finance & Banking
The federal Sustainable Finance Strategy (2021) sets objectives to mobilise investment and integrate sustainability into financial-market policy. Supervisory expectations are articulated by BaFin’s Guidance Notice on dealing with sustainability risks (2019, EN version 2020), and climate/ESG risk is embedded in ongoing supervisory work. BaFin and the Deutsche Bundesbank conduct periodic stress tests for less-significant institutions (LSIs); the 2024 LSI stress test covered financial risk types, with survey evidence showing banks increasingly considering physical and transition ESG risks in risk inventories. Germany operates a Sustainable Finance Advisory Council to advise government; at the same time, Germany (through KfW and the Finance Ministry) issues and supports sovereign green securities and has expanded public programmes for decarbonisation finance, but there is no explicit prudential penalty regime (e.g., green supporting factors/brown penalising factors) mandated at national level and no mandatory environmental/social stress-testing regime beyond EU exercises.
The federal Sustainable Finance Strategy (2021) sets objectives to mobilise investment and integrate sustainability into financial-market policy. Supervisory expectations are articulated by BaFin’s Guidance Notice on dealing with sustainability risks (2019, EN version 2020), and climate/ESG risk is embedded in ongoing supervisory work. BaFin and the Deutsche Bundesbank conduct periodic stress tests for less-significant institutions (LSIs); the 2024 LSI stress test covered financial risk types, with survey evidence showing banks increasingly considering physical and transition ESG risks in risk inventories. Germany operates a Sustainable Finance Advisory Council to advise government; at the same time, Germany (through KfW and the Finance Ministry) issues and supports sovereign green securities and has expanded public programmes for decarbonisation finance, but there is no explicit prudential penalty regime (e.g., green supporting factors/brown penalising factors) mandated at national level and no mandatory environmental/social stress-testing regime beyond EU exercises.
Greening Fiscal & Monetary Policy
Germany continues to use fiscal policy tools to support environmental objectives, such as eco-taxes, EU ETS revenues flowing into the Climate and Transformation Fund (which finances energy-efficiency, renewables, and public building retrofits), and green sovereign bonds (since 2020, the federal government has issued Green Federal Securities raising €11.5 billion in the first year and building to over €73 billion as of late 2024. However, Germany laggs behind EU peers in environmental tax share (4.6% vs EU average 6.1%), and mandatory climate risk testing for budget planning remains absent.
Germany continues to use fiscal policy tools to support environmental objectives, such as eco-taxes, EU ETS revenues flowing into the Climate and Transformation Fund (which finances energy-efficiency, renewables, and public building retrofits), and green sovereign bonds (since 2020, the federal government has issued Green Federal Securities raising €11.5 billion in the first year and building to over €73 billion as of late 2024. However, Germany laggs behind EU peers in environmental tax share (4.6% vs EU average 6.1%), and mandatory climate risk testing for budget planning remains absent.
Green Trade Practices
Germany integrates sustainability into its trade framework largely through the EU’s overarching regulatory architecture, including the EU Taxonomy Regulation, the Corporate Sustainability Reporting Directive (CSRD), and the Carbon Border Adjustment Mechanism (CBAM). These instruments are incorporated into German law and influence how trade and investment are governed, particularly in relation to ESG compliance and climate risk disclosure. The Federal Ministry for Economic Affairs and Climate Action (BMWK) has also implemented environmental criteria in export credit guarantees and foreign trade promotion. However, while these frameworks are strong, Germany’s bilateral trade agreements do not yet systematically include binding sustainable development chapters, nor do they address carbon pricing interoperability, fossil fuel subsidy reform, or investor-state dispute settlement (ISDS) reform. Germany is supportive of multilateral initiatives like the Agreement on Climate Change, Trade and Sustainability (ACCTS) but is not currently a formal party.
Germany integrates sustainability into its trade framework largely through the EU’s overarching regulatory architecture, including the EU Taxonomy Regulation, the Corporate Sustainability Reporting Directive (CSRD), and the Carbon Border Adjustment Mechanism (CBAM). These instruments are incorporated into German law and influence how trade and investment are governed, particularly in relation to ESG compliance and climate risk disclosure. The Federal Ministry for Economic Affairs and Climate Action (BMWK) has also implemented environmental criteria in export credit guarantees and foreign trade promotion. However, while these frameworks are strong, Germany’s bilateral trade agreements do not yet systematically include binding sustainable development chapters, nor do they address carbon pricing interoperability, fossil fuel subsidy reform, or investor-state dispute settlement (ISDS) reform. Germany is supportive of multilateral initiatives like the Agreement on Climate Change, Trade and Sustainability (ACCTS) but is not currently a formal party.
Pricing Carbon
Germany participates in the EU ETS (now including maritime emissions from 2024) and operates a national carbon-pricing scheme for fuels in buildings and road transport under the Fuel Emissions Trading Act (BEHG). After a temporary pause in 2023, the federal government confirmed a return to the planned price path: €45/tCO₂ in 2024 and €55/tCO₂ in 2025, with auctions and a €55–65 corridor in 2026, moving to a market price thereafter; EU ETS 2 for buildings/road transport becomes fully operational in 2027. Germany also maintains legally binding climate targets under the Federal Climate Action Act (KSG). A major reform in July 2024 (BGBl. I 2024 Nr. 235) shifted compliance from annual sector targets to an overall multi-year budget approach, with corrective measures triggered by economy-wide goal deviations, keeping the 2030 (−65%), 2040 (−88%), and 2045 net-zero targets intact.
Germany participates in the EU ETS (now including maritime emissions from 2024) and operates a national carbon-pricing scheme for fuels in buildings and road transport under the Fuel Emissions Trading Act (BEHG). After a temporary pause in 2023, the federal government confirmed a return to the planned price path: €45/tCO₂ in 2024 and €55/tCO₂ in 2025, with auctions and a €55–65 corridor in 2026, moving to a market price thereafter; EU ETS 2 for buildings/road transport becomes fully operational in 2027. Germany also maintains legally binding climate targets under the Federal Climate Action Act (KSG). A major reform in July 2024 (BGBl. I 2024 Nr. 235) shifted compliance from annual sector targets to an overall multi-year budget approach, with corrective measures triggered by economy-wide goal deviations, keeping the 2030 (−65%), 2040 (−88%), and 2045 net-zero targets intact.
Sectors
Cross-Sectoral Planning
Germany’s sectoral green strategy is guided by robust institutions and legally mandated frameworks. The German Council for Sustainable Development (an independent group of experts) provides peer reviews of the Sustainable Development Strategy and advises on SDGs implementation. The Climate Action Plan 2050, updated in 2022, sets binding carbon reduction pathways for energy, buildings, transport, industry, agriculture, LULUCF, and waste, with a target of 65% emissions reduction by 2030 and full neutrality by 2045. The 2023 Immediate Climate Action Programme and 2030 GHG Roadmap focus on rapid decarbonisation in buildings and transport, supported by statutory emissions reviews and legally enforced sectoral building blocks. A redesigned national ETS now covers both stationary and mobile sources, enhancing coherence. While agricultural and industry decarbonisation still face implementation gaps, there is a structured coordination architecture across sectors.
Germany’s sectoral green strategy is guided by robust institutions and legally mandated frameworks. The German Council for Sustainable Development (an independent group of experts) provides peer reviews of the Sustainable Development Strategy and advises on SDGs implementation. The Climate Action Plan 2050, updated in 2022, sets binding carbon reduction pathways for energy, buildings, transport, industry, agriculture, LULUCF, and waste, with a target of 65% emissions reduction by 2030 and full neutrality by 2045. The 2023 Immediate Climate Action Programme and 2030 GHG Roadmap focus on rapid decarbonisation in buildings and transport, supported by statutory emissions reviews and legally enforced sectoral building blocks. A redesigned national ETS now covers both stationary and mobile sources, enhancing coherence. While agricultural and industry decarbonisation still face implementation gaps, there is a structured coordination architecture across sectors.
Circular Economy
Germany adopted its National Circular Economy Strategy (NCES) in December 2024. The strategy sets clear medium- and long-term targets to increase circular material use rate (CMUR), reduce primary raw material consumption, and promote extended product life cycles. The NCES is built around the principles of industrial symbiosis, innovation in eco-design, reuse, and remanufacturing. It also integrates critical raw materials (CRMs) and includes a “Circularity Made in Germany” seal for certified circular enterprises. Implementation is coordinated through a multi-stakeholder governance structure, with measurable indicators and a federal investment programme focused on circular infrastructure, regional innovation hubs, and public procurement reform. The Federal Environment Ministry (BMUV) has also launched a national public consultation process to monitor rollout and stakeholder engagement.
Germany adopted its National Circular Economy Strategy (NCES) in December 2024. The strategy sets clear medium- and long-term targets to increase circular material use rate (CMUR), reduce primary raw material consumption, and promote extended product life cycles. The NCES is built around the principles of industrial symbiosis, innovation in eco-design, reuse, and remanufacturing. It also integrates critical raw materials (CRMs) and includes a “Circularity Made in Germany” seal for certified circular enterprises. Implementation is coordinated through a multi-stakeholder governance structure, with measurable indicators and a federal investment programme focused on circular infrastructure, regional innovation hubs, and public procurement reform. The Federal Environment Ministry (BMUV) has also launched a national public consultation process to monitor rollout and stakeholder engagement.
Green Transport & Mobility
Germany's transport decarbonisation strategy is driven by the National Electromobility Strategy, the Climate Action Programme 2030, and the long-term German Climate Law. The government has set a target of 15 million electric vehicles (EVs) on the road by 2030, supported by a national plan to install 1 million public charging stations. In April 2025, the federal government launched the "Power to the Road" initiative, which includes over €8 billion in investments to deploy fast-charging corridors for heavy-duty vehicles along highways. Germany also subsidises electric trucks, offers tax incentives for low-emission vehicles, and maintains a bonus system for EV buyers. Urban areas continue to expand low-emission zones and invest in modal integration, especially in cities like Berlin, Hamburg, and Munich.
While freight electrification and rural access are expanding, the transport sector remains one of the most challenging areas for emission reduction. The German Council of Economic Experts and the Federal Environment Agency have noted that climate targets in the sector are at risk of being missed, indicating the need for additional regulatory tightening.
Germany's transport decarbonisation strategy is driven by the National Electromobility Strategy, the Climate Action Programme 2030, and the long-term German Climate Law. The government has set a target of 15 million electric vehicles (EVs) on the road by 2030, supported by a national plan to install 1 million public charging stations. In April 2025, the federal government launched the "Power to the Road" initiative, which includes over €8 billion in investments to deploy fast-charging corridors for heavy-duty vehicles along highways. Germany also subsidises electric trucks, offers tax incentives for low-emission vehicles, and maintains a bonus system for EV buyers. Urban areas continue to expand low-emission zones and invest in modal integration, especially in cities like Berlin, Hamburg, and Munich.
While freight electrification and rural access are expanding, the transport sector remains one of the most challenging areas for emission reduction. The German Council of Economic Experts and the Federal Environment Agency have noted that climate targets in the sector are at risk of being missed, indicating the need for additional regulatory tightening.
Clean Energy
Germany continues to lead with ambitious targets and solid policy frameworks. As of 2024, renewables supplied a record-high 62.7% of public electricity generation (55% of total gross consumption), surpassing targets set under the Renewable Energy Sources Act. Nuclear is now fully phased out., but coal remains part of the mix until its legislated phase-out by 2038 (with possible acceleration), LNG is filling in intermittency gaps, and sectoral coverage (notably transport and heating) remains inconsistent. Legislated under the 2022 EEG, the country targets 40–45% renewable electricity by 2025, 80% by 2035, and aims for near‑full grid decarbonisation post‑2038 coal phase‑out. The Energy Efficiency Act commits to cutting primary energy consumption by ~39% by 2030, while the Hydrogen Strategy (updated 2023) promotes clean-fuel integration.
Germany continues to lead with ambitious targets and solid policy frameworks. As of 2024, renewables supplied a record-high 62.7% of public electricity generation (55% of total gross consumption), surpassing targets set under the Renewable Energy Sources Act. Nuclear is now fully phased out., but coal remains part of the mix until its legislated phase-out by 2038 (with possible acceleration), LNG is filling in intermittency gaps, and sectoral coverage (notably transport and heating) remains inconsistent. Legislated under the 2022 EEG, the country targets 40–45% renewable electricity by 2025, 80% by 2035, and aims for near‑full grid decarbonisation post‑2038 coal phase‑out. The Energy Efficiency Act commits to cutting primary energy consumption by ~39% by 2030, while the Hydrogen Strategy (updated 2023) promotes clean-fuel integration.
Just Transition
Green Job Creation
Germany has a substantial green employment sector—around 7.5% of all jobs in environmental protection, and 372,500 energy-transition jobs in 2024 (up from 173,000 in 2019). However, green job development has primarily been a by-product of climate and energy policy, rather than a central objective with explicit targets or transition mechanisms. Green job creation remains indirect, driven by Energiewende incentives rather than by tailored policies or formal employment targets. Germany lacks structured workforce transition frameworks or specific inclusivity mechanisms.
Germany has a substantial green employment sector—around 7.5% of all jobs in environmental protection, and 372,500 energy-transition jobs in 2024 (up from 173,000 in 2019). However, green job development has primarily been a by-product of climate and energy policy, rather than a central objective with explicit targets or transition mechanisms. Green job creation remains indirect, driven by Energiewende incentives rather than by tailored policies or formal employment targets. Germany lacks structured workforce transition frameworks or specific inclusivity mechanisms.
Just Transition Frameworks
Germany implements just-transition elements mainly through its coal phase-out and regional restructuring architecture: the Coal Phase-out Act (Kohleausstiegsgesetz) and the Strukturstärkungsgesetz Kohleregionen, which provides up to €40 billion in federal support to coal regions through 2038 (including adjustment support and regional investment programmes). These are complemented by Territorial Just Transition plans under the EU Just Transition Fund and measures in Germany’s Recovery and Resilience Plan (RRP) (climate share 49.5%) that include skills, innovation and decarbonisation investments. Governance features include social dialogue (Coal Commission) and dedicated instruments (e.g., Anpassungsgeld for affected workers). There is not a single, cross-economy national “just transition” framework covering all sectors, but sectoral and regional frameworks are operational and financed.
Germany implements just-transition elements mainly through its coal phase-out and regional restructuring architecture: the Coal Phase-out Act (Kohleausstiegsgesetz) and the Strukturstärkungsgesetz Kohleregionen, which provides up to €40 billion in federal support to coal regions through 2038 (including adjustment support and regional investment programmes). These are complemented by Territorial Just Transition plans under the EU Just Transition Fund and measures in Germany’s Recovery and Resilience Plan (RRP) (climate share 49.5%) that include skills, innovation and decarbonisation investments. Governance features include social dialogue (Coal Commission) and dedicated instruments (e.g., Anpassungsgeld for affected workers). There is not a single, cross-economy national “just transition” framework covering all sectors, but sectoral and regional frameworks are operational and financed.
Greening MSMEs & Social Enterprise
Germany does not have a separate legal form for social enterprises; organisations use existing forms (e.g., gGmbH, eG, GmbH). In 2023 the federal government adopted the National Strategy for Social Innovations and for Public-Benefit-Oriented Enterprises, setting 11 workstreams and ~70 measures to improve conditions for such organisations. Targeted supports for MSME decarbonisation include the Federal Funding for Energy and Resource Efficiency in Business (EEW) (grants/loans, revised 15 Feb 2024, with process upgrades in Sept 2025), and KfW products for energy and environmental investments in SMEs. These instruments provide finance, advisory and training routes for efficiency and transition projects; legal recognition of social enterprise remains functional (strategy-level) rather than a dedicated corporate form.
Germany does not have a separate legal form for social enterprises; organisations use existing forms (e.g., gGmbH, eG, GmbH). In 2023 the federal government adopted the National Strategy for Social Innovations and for Public-Benefit-Oriented Enterprises, setting 11 workstreams and ~70 measures to improve conditions for such organisations. Targeted supports for MSME decarbonisation include the Federal Funding for Energy and Resource Efficiency in Business (EEW) (grants/loans, revised 15 Feb 2024, with process upgrades in Sept 2025), and KfW products for energy and environmental investments in SMEs. These instruments provide finance, advisory and training routes for efficiency and transition projects; legal recognition of social enterprise remains functional (strategy-level) rather than a dedicated corporate form.
Inclusive Social Protection
Germany maintains established welfare structures through Hartz IV system (last reformed in 2024). This model retains its work-conditioned benefits but no explicit green or environmental conditions.While it’s experimenting with innovative programs like basic income pilots (Mein Grundeinkommen basic income pilot 2023–2026), these remain small-scale, some like the basic income pilot are privately funded, and in general terms lack integration with green transition goals.
Germany maintains established welfare structures through Hartz IV system (last reformed in 2024). This model retains its work-conditioned benefits but no explicit green or environmental conditions.While it’s experimenting with innovative programs like basic income pilots (Mein Grundeinkommen basic income pilot 2023–2026), these remain small-scale, some like the basic income pilot are privately funded, and in general terms lack integration with green transition goals.
Nature
Ocean & Land Conservation
Germany adopted the National Biodiversity Strategy 2030 (NBS 2030), approved by the Federal Cabinet on 18 Dec 2024, with 21 action areas and 64 targets, aligning with the Kunming–Montreal Global Biodiversity Framework and SDGs 14/15. Implementation leverages long-standing instruments such as the Bundesprogramm Biologische Vielfalt and the Aktionsprogramm Natürlicher Klimaschutz (ANK); in marine areas, Germany continues mandatory reporting and status assessments under the EU Marine Strategy Framework Directive, with 2024 updates for the North and Baltic Seas. These instruments link conservation with climate and regional planning, with dedicated funding lines in federal budgets/financial plans.
Germany adopted the National Biodiversity Strategy 2030 (NBS 2030), approved by the Federal Cabinet on 18 Dec 2024, with 21 action areas and 64 targets, aligning with the Kunming–Montreal Global Biodiversity Framework and SDGs 14/15. Implementation leverages long-standing instruments such as the Bundesprogramm Biologische Vielfalt and the Aktionsprogramm Natürlicher Klimaschutz (ANK); in marine areas, Germany continues mandatory reporting and status assessments under the EU Marine Strategy Framework Directive, with 2024 updates for the North and Baltic Seas. These instruments link conservation with climate and regional planning, with dedicated funding lines in federal budgets/financial plans.
Natural Capital Accounting
Germany publishes environmental-economic accounts (UGR) on a regular basis (Destatis), including air emissions, environmental taxes, material flows, environmental protection expenditure, and related indicators. Germany is also developing ecosystem accounts (Ökosystemgesamtrechnung) aligned with SEEA-EA, with releases since 2024 on land cover/condition and selected ecosystem services. Biodiversity governance is framed by the National Biodiversity Strategy 2030 (NBS 2030, adopted 18 Dec 2024; first action plan to 2027), providing an institutional context and advisory channels (e.g., BfN/SRU) but no dedicated, independent “natural-capital committee” with a formal mandate over budgets and infrastructure appraisal.
Germany publishes environmental-economic accounts (UGR) on a regular basis (Destatis), including air emissions, environmental taxes, material flows, environmental protection expenditure, and related indicators. Germany is also developing ecosystem accounts (Ökosystemgesamtrechnung) aligned with SEEA-EA, with releases since 2024 on land cover/condition and selected ecosystem services. Biodiversity governance is framed by the National Biodiversity Strategy 2030 (NBS 2030, adopted 18 Dec 2024; first action plan to 2027), providing an institutional context and advisory channels (e.g., BfN/SRU) but no dedicated, independent “natural-capital committee” with a formal mandate over budgets and infrastructure appraisal.
Sustainable Agriculture & Food Systems
Germany’s food systems transformation is guided by the "Good Food for Germany" Strategy, adopted in January 2024 by the Federal Ministry of Food and Agriculture (BMEL). This cross-sectoral strategy focuses on promoting healthy, sustainable diets, reducing food waste, improving food literacy, and strengthening regional supply chains. It also incorporates elements of climate resilience and biodiversity protection into food policy. Complementing this is the Organic Strategy 2030, which sets the ambitious target of converting 30% of agricultural land to organic production by 2030, backed by federal and EU Common Agricultural Policy (CAP) funds.
Public procurement guidelines have been updated to support climate-friendly meals in schools and hospitals, and Germany participates actively in the EU’s Farm to Fork Strategy. However Germany has not yet adopted a unified food systems law that integrates fiscal reform (e.g. subsidy phase-outs) or creates legally binding 2030 food sustainability indicators across ministries.
Germany’s food systems transformation is guided by the "Good Food for Germany" Strategy, adopted in January 2024 by the Federal Ministry of Food and Agriculture (BMEL). This cross-sectoral strategy focuses on promoting healthy, sustainable diets, reducing food waste, improving food literacy, and strengthening regional supply chains. It also incorporates elements of climate resilience and biodiversity protection into food policy. Complementing this is the Organic Strategy 2030, which sets the ambitious target of converting 30% of agricultural land to organic production by 2030, backed by federal and EU Common Agricultural Policy (CAP) funds.
Public procurement guidelines have been updated to support climate-friendly meals in schools and hospitals, and Germany participates actively in the EU’s Farm to Fork Strategy. However Germany has not yet adopted a unified food systems law that integrates fiscal reform (e.g. subsidy phase-outs) or creates legally binding 2030 food sustainability indicators across ministries.
Nature Finance
Germany uses multiple nature-positive finance instruments. The national emissions trading (BEHG) sets a rising CO₂ price for heating/transport fuels (fixed prices in 2021–2025 with a price corridor in 2026), and revenues flow into the Climate and Transformation Fund (KTF), which finances nature/climate programmes among other decarbonisation measures. Germany issues Green Federal Securities with annual Allocation/Impact Reports; the latest allocation report for 2024 issuances was published in Feb 2025. The Constitutional Court’s judgment (15 Nov 2023) curtailed a large reallocation into the KTF, leading to revised 2025 plans (~€36.6 bn programme outlays, per government communications). While these instruments represent significant, ongoing public finance for climate/nature (e.g., ANK), environmentally harmful subsidies remain under discussion in federal reporting and are not yet comprehensively reformed.
Germany uses multiple nature-positive finance instruments. The national emissions trading (BEHG) sets a rising CO₂ price for heating/transport fuels (fixed prices in 2021–2025 with a price corridor in 2026), and revenues flow into the Climate and Transformation Fund (KTF), which finances nature/climate programmes among other decarbonisation measures. Germany issues Green Federal Securities with annual Allocation/Impact Reports; the latest allocation report for 2024 issuances was published in Feb 2025. The Constitutional Court’s judgment (15 Nov 2023) curtailed a large reallocation into the KTF, leading to revised 2025 plans (~€36.6 bn programme outlays, per government communications). While these instruments represent significant, ongoing public finance for climate/nature (e.g., ANK), environmentally harmful subsidies remain under discussion in federal reporting and are not yet comprehensively reformed.
Green Recovery
Green Recovery Measures
Germany integrated green investment into recovery via the 2020 stimulus package (with a €50 bn “Zukunftspaket” focusing on energy transition, hydrogen, e-mobility and building efficiency) and a Recovery and Resilience Plan in which 49.5% of expenditures support climate objectives. Follow-on structural financing for the transition is channelled through the Climate and Transformation Fund (KTF); after the Constitutional Court ruling on the 2021 supplementary budget, the government adjusted financing plans and continued to programme sizeable outlays for 2025. Overall, green measures are significant, multi-year and linked to long-term decarbonisation (e.g., hydrogen strategy, renewables, building renovation), though post-ruling adjustments affected pacing and programme composition.
Germany integrated green investment into recovery via the 2020 stimulus package (with a €50 bn “Zukunftspaket” focusing on energy transition, hydrogen, e-mobility and building efficiency) and a Recovery and Resilience Plan in which 49.5% of expenditures support climate objectives. Follow-on structural financing for the transition is channelled through the Climate and Transformation Fund (KTF); after the Constitutional Court ruling on the 2021 supplementary budget, the government adjusted financing plans and continued to programme sizeable outlays for 2025. Overall, green measures are significant, multi-year and linked to long-term decarbonisation (e.g., hydrogen strategy, renewables, building renovation), though post-ruling adjustments affected pacing and programme composition.