GERMANY Law and Practice Contributed by: Friedrich Gebert, Hannah Düwel, Bernhard Gröhe and Clara Schmidt, ARQIS Partnerschaftsgesellschaft mbB
With the European Green Deal, the EU aims for Europe to become the first climate-neutral continent by 2050 and to boost its economic growth at the same time. At the heart of the Green Deal lies the EU Climate Law (Regulation (EU) 2021/1119), which sets a binding target to become climate-neutral by 2050. The interim target for 2030 is to reduce emissions by at least 55% compared to 1990. A central part for reaching the interim goal is the “Fit for 55” package. This set of legislation is intended to ensure that all sectors of the EU economy are capable of meeting the emission reduction targets. A central element of the “Fit for 55” package is a com - prehensive reform of the European Union Emissions Trading System (“EU ETS”), which was previously limited primarily to energy-intensive industrial plants and intra-European aviation. The reform extends the scope of the existing EU ETS (now often referred to as ETS 1) to international maritime transport. In addition, the previous free allocation of emission allowances for aviation will be gradually abolished, with partial integration into the international CORSIA system (Carbon Offsetting and Reduction Scheme for International Aviation) being planned. In addition, a separate emissions trading system (ETS 2) is being introduced for the building and road transport sectors as well as other sectors from 2028 onward. Alongside the reform of emissions trading, the Effort Sharing Regulation (ESR) is being revised in the non- ETS sector. This regulation obliges member states to reduce emissions in sectors that are not covered by the EU ETS – in particular, transport, buildings, agri - culture and smaller industrial plants. The revision as part of “Fit for 55” provides for a significant tightening of national reduction targets by 2030. For Germany, this means an increase in the binding reduction target to 50% compared to 2005. The ESR contains a binding system for annual reporting, target tracking and sanctions if targets are not met, which is meant to ensure legally robust implementation of the climate targets at member state level.
In order to avoid rising prices of products and ser - vices within the EU due to wider application of the ETS and ESR, the EU introduced the Carbon Border Adjustment Mechanism (CBAM). It is a tool to put a price on the carbon emitted during the production of carbon-intensive goods that are entering the EU, and to encourage cleaner industrial production in non-EU countries. The goal of CBAM is to ensure the carbon price of imports is equivalent to the carbon price of domestic production, and that the EU’s climate objec - tives are not undermined. The CBAM is designed to be compatible with WTO rules. A transitional phase started in 2023, while the whole CBAM entered into force on 1 January 2026. With the Omnibus Package of February 2025, the EU changed some of the CBAM rules to simplify processes, especially for small and Germany is also part of the Pentalateral Energy Forum. The Pentalateral Energy Forum is a regional partner - ship between Belgium, the Netherlands, Luxembourg, Germany, France, Austria and Switzerland. It supports the process of regional integration for a reliable and sustainable European energy market at a political level. One of the topics related to climate protection is the decarbonisation of the energy market within the group’s interconnected electricity grid by 2035. medium-sized businesses. Other Regional Regimes Germany has also committed itself to nature conser - vation in international treaties with its neighbours: The Alpine Convention (AC), formally the Convention on the Protection of the Alps, is a treaty under inter - national law on the comprehensive protection and sustainable development of the Alps. The Helsinki Commission (HELCOM) is an interna - tional organisation established by the Convention for the Protection of the Marine Environment of the Baltic Sea of 1974 (updated in 1992), based in Hel - sinki, Finland, with the Commission itself being the supreme decision-making body. Denmark, Germany, Estonia, the European Union, Finland, Latvia, Lithu - ania, Poland, Sweden and Russia work together in HELCOM to protect the Baltic Sea.
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