German coalition commits to faster decarbonisation

Germany's incoming coalition government will step up climate protection efforts with far-reaching reforms to the funding and expansion of renewable energy, the coalition deal showed on Wednesday.

Among a raft of measures, the coalition said it would ensure a faster roll-out of carbon-free power generating capacity, bolder carbon emissions pricing to incentivise a quick exit from fossil fuels, and more support for hydrogen as an alternative energy source, the agreement showed.

The coalition, comprising Social Democrats (SPD), Greens and Liberal Democrats (FDP), said it would aim to be climate neutral, and be open to all technologies, except nuclear energy.

"The new government will make the expansion of renewable energies a central project," the document said of the trilateral cabinet, which will set up a new climate ministry to link its efforts and the interests of export-oriented manufacturers.

Next year, it will adopt a new climate protection programme.

The draft said Germany would ensure carbon emissions prices don't fall below 60 euros ($67.15) per tonne if the European Union cannot agree on a minimum price in its emissions trading scheme. Carbon trading should be widened to heat and transport, it added.

Based on forecasts for power consumption to rise, the government will ask the country's regulator and transmission grid firms to devise new plans for faster network expansion.

Germany will also aim for 10 gigawatts (GW) of electrolysis capacity by 2030 on which to base a new hydrogen economy that will include huge import activity too.

To help consumers with high energy bills, it will from 2023 pay a renewable support fee known as the EEG levy from the state budget rather than collect it from consumers.