# Federal Climate Change Action Act

The Federal Climate Change Action Act (German language: Bundes-Klimaschutzgesetz, KSG) is a German federal law intended to ensure the fulfilment of national climate mitigation goals and compliance with European targets. The Climate Action Act enshrined the climate action and sectoral targets set out in the German Climate Action Plan 2050 in law for the first time: Greenhouse gas emissions are to be reduced by at least 65% below the 1990 baseline by 2030 and by at least 88% by 2040. Net greenhouse gas neutrality is to be achieved by 2045. In addition, the law sets annual reduction targets for the period up to 2040. For various economic sectors, maximum annual emissions are specified until 2030. In the event of an exceedance of the permissible annual emission volume for a sector, the responsible Federal Ministry must submit an immediate action programme within three months.
The basis is the commitment under the Paris Agreement under the United Nations Framework Convention on Climate Change, according to which the increase in the global average temperature must be limited to well below 2°C and, if possible, to 1.5°C compared to pre-industrial levels in order to minimise the impacts of global climate change. The law established the Council of Experts on Climate Change.

## History
### Draft of the law

The adoption of the law was agreed between the CDU, CSU and SPD in the coalition agreement of the 19th legislative period of the Bundestag. On 18 February 2019, Federal Environment Minister Svenja Schulze (SPD) presented a draft bill for the Federal Climate Action Act. In the first version of the law, greenhouse gas emissions were to be reduced by 55% below the 1990 reference level by 2030. A key component of the Federal Climate Action Act is the allocation of departmental responsibility (Section 4, Paragraph 4 of the draft Federal Climate Action Act). For the energy, industry, transport, buildings, agriculture, waste management, and other sectors, an annually decreasing annual emissions limit is set (Section 4, Paragraph 1 of the draft Federal Climate Action Act), and compliance with this limit is the responsibility of the federal ministry assigned to the sector. If the annual emissions limit is exceeded, the responsible ministry must purchase additional emission allowances from its own budget (Sections 6 and 7 of the draft Federal Climate Action Act). The CDU rejected this binding definition of departmental goals in March. The annual targets in the first version of the law began in 2020 with a baseline of 35% below the 1990 reference figure of 1251 Mt, although the previous target was a 40% reduction in 2020; for the years 2020 to 2023, the law would therefore have allowed for higher emissions.
After the Federal Chancellery had not forwarded the law due to rejection by the Union-led ministries, Federal Environment Minister Schulze initiated the interministerial coordination on 27 May. The Federal Chancellery then objected in a letter to “the initiation of interdepartmental coordination, the dispatch to states and associations, and the publication on the Internet“.

### Legislative process

Based on the decisions of the Climate Cabinet, the Federal Climate Action Act was passed by the Federal Cabinet on October 9, 2019, and introduced into the Bundestag. On 15 November 2019, the Bundestag approved the bill amid heavy criticism from the opposition. At the same time, a permanent reduction in the VAT rate for long-distance rail transport from 19 to 7 percent was decided, starting at the beginning of 2020, to encourage rail travel. However, an increase in the commuter allowance and a temporary mobility bonus for low-income commuters were also approved. The Federal Council approved the Climate Action Act at its meeting on 29 November, on the law implementing the 2030 Climate Action Programme in tax law (e.g. long-distance train tickets, commuters) but called upon the Conciliation Committee; The Federal Council had already demanded a fair, appropriate and proportionate distribution of the additional revenue for the federal government and the lower tax revenue for the states and municipalities at the first reading. The Conciliation Committee met on 9 December.
The following key changes were decided upon in the Conciliation Committee:
* The tax incentive for energy consultants has been increased to 50%.
* The commuter allowance will be increased to 0.38 euros between 2024 and 2026 instead of the planned 0.35 euros.
* The planned special regulations for wind turbines in the Property Tax Act will not be implemented.
* Der Finanzausgleich zwischen Bund und Ländern wird neu geregelt.
With these amendments, the law was passed by the Bundestag on 19 December 2019 and by the Bundesrat on 20 December 2019. It was published in the Federal Law Gazette on 30 December 2019. and thus came into force on January 1, 2020. However, the changes to the commuter allowance and the mobility premium only came into force on January 1, 2021.

## Decision of the Federal Constitutional Court in 2021

By decision of March 24, 2021, the Federal Constitutional Court parts of the original version of the KSG incompatible with fundamental rights insofar as there is no provision for the updating of the national reduction targets for periods from 2031 onwards. The legislature was obligated to regulate the updating of the reduction targets for these periods by December 31, 2022, at the latest. However, some parts of the KSG in conjunction with Annex 2 remained applicable.
The reason given was that the law irreversibly postpones high emission reduction burdens to periods after 2030. This would be at the expense of the younger generation. Limiting global warming would then only be feasible with increasingly urgent and short-term measures. This would potentially affect virtually all constitutional civil liberties, because currently almost all areas of human life are still linked to the emission of greenhouse gases and are therefore threatened by drastic restrictions after 2030. The relative weight of the climate mitigation requirement in the balancing of interests continues to increase as climate change progresses. According to Article 20a of the Basic Law of the Federal Republic of Germany, the natural foundations of life must be handled carefully; they must be left to posterity in a condition "that subsequent generations can continue to preserve them not only at the price of radical abstinence themselves." It should not happen that one generation is granted the right "to consume large portions of the CO2 budget under a comparatively mild reduction burden, if this would simultaneously impose a radical reduction burden on subsequent generations and expose their lives to comprehensive losses of freedom." The legislature should therefore have taken precautions to mitigate these high burdens. The court ordered the legislature to further regulate the reduction targets for greenhouse gas emissions for the period after 2030 by the end of 2022. However, the legislature was not obliged to change the reduction targets for 2030, and complaints against this were rejected.

## First amendment

Within a few weeks of the Federal Constitutional Court's decision becoming known, the Federal Environment Ministry drafted a draft for the First Act Amending the Federal Climate Action Act, which, among other things, was intended to implement the Federal Constitutional Court's requirements. The interest groups consulted were given only a few hours to comment. On May 12, 2021, the Federal Cabinet approved the draft law and initiated the legislative process. The draft law also tightens the existing targets for the period up to 2030, especially for the industrial and energy sectors. The deadline for achieving climate neutrality is brought forward from 2050 to 2045. Compared to 1990, greenhouse gas emissions are to be reduced by 65 percent by 2030, instead of 55 percent. The emissions target of 35 percent below the 1990 level for 2020 in the first version of the law was retained, although estimates by Agora Energiewende from the beginning of 2021 assumed a reduction of 42.3 percent in 2020. The "excessive" reduction of 7.3 percent achieved in 2020 can, according to the draft law, be emitted in additional amounts of 0.7 percent in each of the 10 subsequent years. Strictly speaking, the target value for 2030 is therefore only a 64.3 percent reduction compared to 1990, which corresponds to a reduction of approximately 38 percent compared to 2020. The first version of the law provided for a linear reduction from 2020 to 2030 within the emissions trajectory starting from the increased value, corresponding to an increasing percentage decrease. In contrast, the first amendment initially provides for less rapidly declining absolute values ​​of the reduction in the emissions trajectory than in the second half of the 1990s. The total, nominal target value for 2023 corresponds approximately to the actual value for 2020; taking into account the catch-up amount from 2020, the 2020 value is not expected to be undercut until 2024. Annual emissions targets are now also set for the period from 2031 to 2040, but without a sectoral breakdown. Greenhouse gas emissions are expected to fall by 77 percent by 2035 and by 88 percent by 2040.
Annual emissions in million tonnes of CO2-Permitted annual emissions for the years 2020 to 2030 (according to Annex 2 of KSG) :
| | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | 2027 | 2028 | 2029 | 2030 |
| Annual emissions in million tonnes of CO2 equivalent |||||||||||
| Energy | 280 | | 257 | | | | | | | | 108 |
| Industry | 186 | 182 | 177 | 172 | 165 | 157 | 149 | 140 | 132 | 125 | 118 |
| Buildings | 118 | 113 | 108 | 102 | 97 | 92 | 87 | 82 | 77 | 72 | 67 |
| Traffic | 150 | 145 | 139 | 134 | 128 | 123 | 117 | 112 | 105 | 96 | 85 |
| Agriculture | 70 | 68 | 67 | 66 | 65 | 63 | 62 | 61 | 59 | 57 | 56 |
| Waste management and other | 9 | 9 | 8 | 8 | 7 | 7 | 6 | 6 | 5 | 5 | 4 |
The governing coalition had not agreed on concrete measures for achieving the targets until the cabinet decision. Environmental organizations and climate experts criticized this, stating, among other things, that the goal of reducing greenhouse gases by 65 percent by 2030 was insufficient. Reduction targets of 70 percent and 85 percent were demanded. Coal-fired power generation must be phased out much sooner than planned. Since the European Union increased its 2030 emissions reduction target from 40 percent to 55 percent at the end of 2020 (European Green Deal), a tightening of the targets for individual member states had become necessary anyway, more so for countries with previously above-average emissions, such as Germany, than for others. With regard to the social impacts of the CO2 price and a socially acceptable design as a steering instrument, the consensus among the Union and SPD at the time of the decision in the Federal Cabinet was broad. There was agreement that the EEG surcharge should in future be financed from the revenues from CO2 pricing and that the additional revenue should be returned to the economy and consumers; Alliance 90/The Greens wanted a CO2 price with a real steering effect and a climate premium, which experts considered sensible as an "eco-bonus" for every citizen even in the event of an increase in the CO2 price.
In addition to this Climate Action Act, the coalition planned an immediate program for the implementation of the climate targets in the coming weeks of spring 2021. The Bundestag passed the amendment on 24 June 2021 with 352 votes to 290 and 10 abstentions.
The amendment was announced on 30 August 2021 and came into force the following day.

### 2021

The buildings and transport sectors missed their annual targets in 2021. Around 148 million tonnes of CO₂ equivalents were emitted in transport, and around 115 million tonnes in the buildings sector. The Expert Council on Climate Issues assessed the programs submitted by the responsible ministries as inadequate and largely ineffective.
The Energy Act does not specify a reduction target for 2021 for the energy sector. The other three sectors have achieved their respective annual reduction targets.

### 2022

The emission reduction targets in the transport and building sectors were also not met in 2022. A study commissioned by Germanwatch published at the end of February 2023 therefore accuses the federal government of the Scholz cabinet of violating the Climate Action Act.
Following a lawsuit filed by Deutsche Umwelthilfe and BUND, the Berlin-Brandenburg Higher Administrative Court ruled in November 2023 that the relevant ministry must implement an immediate program for greater emission reductions, particularly in the areas of buildings and transport, in order to reliably achieve the climate targets for 2024 to 2030. The amendment to the climate mitigation program made by the federal government in October 2023 does not comply with the law, as it is a more medium- to long-term instrument. The federal government appealed the ruling.

### 2023

In 2023, greenhouse gas emissions were reduced by approximately 10 percent compared to the previous year.
On May 16, 2024, the Higher Administrative Court of Berlin-Brandenburg ruled on a lawsuit filed by German Environmental Aid in November 2022, according to its press release, that the 2023 Climate Action Program "does not fully comply with the legal requirements because it does not adhere to the binding climate mitigation targets and the specified reduction path for the individual sectors, with the exception of the agricultural sector. Furthermore, the Senate found that the 2023 Climate Action Program suffers from methodological deficiencies and is partly based on unrealistic assumptions." The appeal to the Federal Administrative Court was allowed.

## Second amendment
### Origin

In the coalition agreement of the Scholz cabinet, the coalition partners SPD, Greens and FPD agreed on a second amendment. In mid-June 2023, Federal Minister for Economic Affairs and Climate Action Robert Habeck presented a draft bill, which was approved by the Cabinet on 21 June was decided. A months-long dispute over the regulations followed. On April 15, 2024, the governing parties announced that they had reached an agreement. The Committee on Climate Action and Energy approved the draft law with some amendments on April 24. The governing coalition groups voted in favor, while the CDU/CSU, AfD, and the Left voted against. An urgent application by CDU MP Thomas Heilmann to the Federal Constitutional Court to stop the legislative process because his right as a member of parliament “to consultation and to equal participation as a member of parliament in the parliamentary decision-making process” had been violated was rejected by the court on 25 April as “inadmissible from the outset in the main”. On 17 May 2024, the Federal Council approved the new version, but called for some improvements in an accompanying resolution. On July 15, 2024, the Federal President signed the law into law. German Environmental Aid filed a constitutional complaint against the law. Other German environmental associations and individuals also announced that they would file a constitutional complaint.

### Changes

In the future, compliance with climate targets will no longer be monitored retrospectively and separately by sector, but rather forward-looking, multi-year, and cross-sectoral. If it becomes apparent in two consecutive years that the 2030 climate target will not be achieved, the members of the federal government will jointly decide in which sector and with which countermeasures. Future federal governments must present a program of measures to achieve the 2040 climate target at the beginning of their term (for the first time in 2026, i.e., after the next federal election, which is scheduled to take place in spring 2025).