EUROPEAN COMMISSION Brussels, 8.9.2022 SWD(2022) 265 final COMMISSION STAFF WORKING DOCUMENT Environmental Implementation Review 2022















Country Report - GERMANY































Accompanying the document Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions Environmental Implementation Review 2022: Turning the tide through environmental compliance {COM(2022) 438 final} - {SWD(2022) 252 final} - {SWD(2022) 253 final} - {SWD(2022) 254 final} - {SWD(2022) 255 final} - {SWD(2022) 256 final} - {SWD(2022) 257 final} - {SWD(2022) 258 final} - {SWD(2022) 259 final} - {SWD(2022) 260 final} - {SWD(2022) 261 final} - {SWD(2022) 262 final} - {SWD(2022) 263 final} - {SWD(2022) 264 final} - {SWD(2022) 266 final} - {SWD(2022) 267 final} - {SWD(2022) 268 final} - {SWD(2022) 269 final} - {SWD(2022) 270 final} - {SWD(2022) 271 final} - {SWD(2022) 272 final} - {SWD(2022) 273 final} - {SWD(2022) 274 final} - {SWD(2022) 275 final} - {SWD(2022) 276 final} - {SWD(2022) 277 final} - {SWD(2022) 278 final}



This report has been written by the staff of the Directorate-General for Environment, European Commission.

Comments are welcome, please send them to: ENV-EIR@ec.europa.eu More information on the European Union is available http://europa.eu . Photographs: For reproduction or use of these photos, permission must be sought directly from the copyright holder. ©European Union, 2022 Reproduction is authorised provided the source is acknowledged. Table of contents Executive summary Part I: Thematic areas 1. Circular economy and waste management Measures towards a circular economy Waste management 2. Biodiversity and natural capital Nature protection and restoration Marine ecosystems Ecosystem assessment and accounting

3. Zero pollution Clean air Industrial emissions Major industrial accidents prevention - SEVESO Noise Water quality and management Chemicals 4. Climate action Key national climate policies and strategies Effort sharing target Key sectoral developments Use of revenues from the auctioning of EU ETS allowances Part II: Enabling Framework: Implementation Tools 5. Financing Environmental investment needs in the European Union EU environmental funding 2014-2020 EU environmental funding 2021-2027 National environmental protection expenditure Green budget tools Overall financing compared to the needs

6. Environmental governance Information, public participation and access to justice Effectiveness of environmental administrations Reforms through the Commission’s Technical Support Instrument (TSI) TAIEX EIR peer-to-peer



Executive summary In previous Environmental Implementation Reviews (EIRs), the main challenges identified for Germany for the implementation of EU environmental policy and law were: ·reducing pressures on nature and water, in particular ground water from intensive agriculture, including the use nutrients; ·improving air quality, especially in densely populated areas. On nature, the picture is mixed: while the share of habitats and species in good condition has slightly improved, the share of species in bad status has also grown, and the situation of hay meadows is of serious concern, and needs improvement. Germany’s Natura 2000 network is now nearly complete, but in the Commission’s view the quality of the set objectives and measures is insufficient for all Special Areas of Conservation (SACs). The situation for forested areas protected under the Nature Directives remains worrying as 31 % have a bad conservation status, and most peatland habitats have a bad or inadequate status. Restoring these ecosystems, which will also boost natural carbon sinks, needs to be accelerated. There has been further progress on ecosystem assessment and accounting. According to the latest report on the implementation of the Nitrates Directive, groundwater quality has not improved, and water pollution caused by nitrates remains a serious concern. There are continuing acute problems with excess plant and algae growth due to high concentrations of nutrients (euthrophication) in the Baltic and North Seas. Germany still has to fully implement the ruling of the EU Court of Justice over the Nitrates Directive. In Germany only 8.1 % of all surface water bodies reach good ecological status. For many water bodies the environmental objectives will not be met by 2021 and may not even be met by 2027. On air quality there has been some progress since the 2019 EIR, with new measures to bring air quality zones into compliance. While there were no exceedances for PM10, five air quality zones still reported exceedances for NO2 under the Ambiant Air Quality Directive in 2020. Additional measures are therefore needed to bring all zones into compliance with the Directive. The current submission of air pollutant emission projections under the National Emissions Ceiling Directive do not demonstrate reaching the emission reduction commitments for ammonia for 2020-2029 and from 2030 onwards and for PM2.5 from 2030 onwards. According to the latest inventory data submitted by Germany, which are still to be reviewed by the Commission, Germany is in compliance with the emission reduction commitments for all pollutants in 2020. On waste management, Germany remains at the top of the recycling league, and its circular material use rate is around EU average, but lags behind EU leaders. However, it is at the lower end of the table on municipal waste generation, with 632 kg of waste per person in 2020. Packaging waste in particular has increased. In view of the post-2020 recycling targets, efforts need to be pursued to strengthen waste prevention, reuse and remanufacturing. Making better use of the potential of circularity in industry will help reduce resource dependency, in particular fossil fuel-based raw materials. Germany’s recovery and resiliaece plan contains no measures having biodiversity as their objective, but green infrastructure and the circular economy are priorities in cohesion funding for the new programming period. Given the overall small allocation of EU funds compared to GDP, the main source of funds to deal with investment needs must come from national and private sources.

Germany’s overall environmental financing for investments came to 0.63 % of GDP in 2014-2020, relying heavily on national financing sources. The overall environmental investment needs in 2021-2027 are estimated to be at least 0.82 % of Germany’s GDP per year, suggesting a potential environmental financing gap of 0.19 % of GDP, which needs to be addressed for environmental implementation.



Part I: Thematic areas 1. Circular economy and waste management Measures towards a circular economy The new circular economy action plan adopted in March 2020 is one of the main building blocks of the European Green Deal. The EU’s transition to a circular economy will reduce pressure on natural resources and will create sustainable growth and jobs. It is also a prerequisite to achieve the EU’s 2050 climate neutrality target and to halt biodiversity loss. The action plan announces initiatives along the entire life cycle of products, aiming to reduce the EU's consumption footprint and to double the EU's circular material use rate by 2030. It targets how products are designed, promotes circular economy processes, encourages sustainable consumption, and aims to ensure that waste is prevented and the resources used are kept in the EU economy for as long as possible. The circular material use rate is a good indicator of an economy’s circularity, as it includes all the materials that are fed back into our economy. Large differences in the circularity rate exist between countries. To help achieve the EU circular economy action plan’s goal of doubling the EU’s circular material use rate by 2030, ambitious measures targeting the whole product life cycle are needed at Member State level. Such measures range from sustainable product design that make it possible to able to increase the durability, reparability, upgradability and recyclability of products, to other measures like : (i) ‘remanufacturing’; (ii) increasing circularity in production processes; (iii) recycling; (iv) boosting eco-innovation; (v) and increasing the uptake of green public procurement.remanufacturing, increasing the circularity in production processes, recycling, as well as boosting eco-innovation and increasing the uptake of green public procurement. Germany’s circular (secondary) use of materials rose from 11.4 % in 2017 to 13.4 % in 2020, compared to the EU average of 12.8 %. This shows a steady increase in recent years. But Germany has quite a way to go to chatch up with EU leaders - Netherlands (30.9 %), Belgium (23 %), and France 22.2 %). Figure 1: Circular material use rate ( %) 2010-2020 Resource productivity expresses how efficiently the economy uses material resources to produce wealth. Improving resource productivity can help to minimise negative impacts on the environment and reduce dependency on volatile raw material markets. As shown in Figure 2, with EUR 2.76 generated per kg of material consumed in 2020, resource productivity in Germany is well above the EU average of EUR 2.09 per kg. This positive performance is further supported by a continuous increase in Germany’s resource productivity over the last decade. Figure 2: Resource productivity, 2010-2020 Circular economy strategies The Commission encourages Member States to adopt and implement national/regional circular economy strategies covering the whole life cycle of products, as they are one of the most effective ways to progress towards a more circular economy. Since the launch of the online European Circular Economy Stakeholder Platform in 2017, national, regional or local authorities have used the platform to share their strategies and roadmaps.

Germany currently does not have an overall circular economy strategy. The new government programme mentions that a comprehensive national circular economy strategy will be drawn up. So far several strategies and initiatives address many aspects of the circular economy. The resource efficiency programme PROGRESS, the waste prevention programme, the German hightech-strategy, the digtial policy agenda for the environment and the national programme on sustainable consumption all deal with different circularity aspects. PROGRESS, the resource efficiency programmewas updated for the third time in June 2020 and now incorporates decarbonisation and digitalisation. These new elements stress the importance of resource efficiency for achieving Germany’s climate targets, and address the potential and risks of digital transformation in the field of resource efficiency, as well as mobility in terms of resource efficiency. Germany has a sectorial strategy for plastics. In 2018 it launched a five-point plan to lower the amount of plastic waste.The aim is to eliminate the use of unnecessary packaging, replace existing packaging with environmentally friendly alternatives, increase the recycling rate, encourage better separation of plastics from organic waste, and contribute to international efforts to reduce the amount of plastic waste in marine waters. Eco-innovation A successful transition to a circular economy requires social and technological innovation. this is because the full potential of the circular economy can only be reached when it is implemented across all value chains. Eco-Innovation is an important enabling factor for the circular economy. New appraoches to product design and new business models can help to produce systemic circularity innovations, creating new business opportunities. Germany is an eco-innovation leader ranking sixth in the 2021 Eco-Innovation Scoreboard . In two out of five components, Germany performs above the EU average, namely the eco-innovation inputs and outputs., and below average on eco-innovation activities, socio-economic outcomes and resource efficiency outcomes. Figure 3: Eco-innovation performance, 2010-2019

Green public procurement (GPP) Public procurement accounts for a large proportion of European consumption, with public authorities’ purchasing power representing 14 % of EU GDP. Public procurement can help drive the demand for sustainable products that meet repairability and recyclability standards. To date reporting to monitor the uptake of green public procurement is voluntary. Given that the federal authorities aim to be climate neutral by 2030, a stricter and more comprehensive regulation of green public procurement called AVV Klima entered into force on 1 January 2022. The new elements include life cycle costing, a list banning certain single-use plastics, encouraging alternatives to buying (benefit rather than ownership), and giving priority to recycled products. The German government used the occasion of transposing the 2018 waste package into national waste law to make the green public procurement of recycled products mandatory. EU Ecolabel and the eco management and audit scheme (EMAS) The number of EU Ecolabel products and EMAS-licensed organisations in a given country provides some indication of the extent to which the private sector and national stakeholders are actively engaged in the transition to a circular economy. It also shows how committed public authorities are to supporting instruments designed to promote the circular economy. As of September 2021, Germany had 7 780 products out of 83 590 and 358 licenses out of 2 057 registered in the EU ecolabel scheme. Germany ranks first on registered licences and fourth on products in Europe. Moreover, 1 115 organisations from Germany are currently registered in EMAS, 122 fewer than in 2019. There have been 3 339 registrations for an EU Ecolabel and 37 new licence registrations since 2019. Germany received a priority action in 2019 to strengthen its policy framework in order to to speed up the transition towards the circular economy by all economic sectors. As a circular economy strategy has been announced in the new government programme, but as work has not started yet, the priority action is repeated. 2022 priority action ·Strengthen the policy framework to speed up the transition towards the circular economy by all economic sectors, including priority sectors like plastics, textiles and construction.

Waste management Turning waste into a resource is supported by: (i) fully implementing EU waste legislation, which includes the waste hierarchy, the need to ensure separate collection of waste, the landfill diversion targets, etc.; (ii) reducing waste generation and waste generation per capita in absolute terms; (iii) limiting energy recovery to non-recyclable materials and phasing out landfilling of recyclable or recoverable waste. This section focuses on the management of municipal waste for which EU law sets mandatory recycling targets. Preventing products and materials from becoming waste for as long as possible is the most efficient way to improve resource efficiency and to reduce the environmental impact of waste. In 2020 – as the first EU Member State – Germany introduced a new general “duty of care” in its Kreislaufwirtschaftsgesetz (Circular Economy Act), obliging producers and distributors to prevent goods from becoming waste by introducing certain measures, for example selling goods at a reduced rate or donating goods. Waste prevention and re-use are the most preferred options and top the waste hierarchy. The amount of municipal waste generated is a good indicator of the effectiveness of waste prevention measures. As Figure 4 shows, German municipal waste generation per capita has seen a slight decrease since 2016, but in 2020 the amount jumped back to 632 kg, which to a certain extent may be COVID-related. Germany has the fourth highest per capita rate, well above the EU average of 505 kg. Total waste generation has remained steady overall since 2014, although there was an increase for some waste fractions such as packaging. Given that GDP continued to grow, the trend indicates that Germany seems to be on track to relatively decouple its waste generation from its economic growth. Gven the overall high level of municipal waste, waste prevention measures taken so far have not been impactful enough, or not shown their impact yet. Figure 4: Municipal waste by treatment in Germany, 2010-2020 Germany is one of the best performing countries in the EU in terms of waste treatment. It has the highest recycling rate across the EU. In 2019, Germany recycled 66.7 % of its municipal waste (see Figure 5) which is well above the EU 2020 recycling target of 50 % of municipal waste. Post-2020 recycling targets are ambitious particularly in terms of incineration, which has remained at the same rate since 2015. Figure 5: Recycling rate of municipal waste, 2010-2020 The Commission's 2018 early warning report'12 did not list Germany as one of the countries at risk of missing the EU 2020 target of recycling 50 % of municipal waste. The Commission is finalising its analysis of the progress made on the recommendations set out in the 2018 early warning reports and an analysis of progress towards achieving the 2025 waste recycling targets. This report will be presented at the end of 2022 and will make recommendations as appropriate. Implementation of the 2018 waste legislative package Germany notified the transposition of the 2018 waste package to the Commission. A conformity assessment is now ongoing. Waste management plans and waste prevention programmes are instrumental for a sound implementation of the EU waste legislation. They set out key provisions and investments to ensure compliance with existing and new legal requirements (e.g. waste prevention, separate collection for a number of specific waste streams, recycling and landfill targets). Directive (EU) 2018/851 makes substantial amendments to the provisions of Directive 2008/98/EC which specified the content of waste management plans and waste prevention programmes. Adjustments to these plans and programmes are therefore necessary to bring them into line with Directive (EU) 2018/851. Revised plans and programmes were due on 5 July 2020.

Germany has notified an updated Waste Prevention Programme, however the notification of the large majority of revised waste management plans is still pending. In Germany waste management plans are under the responsibility of the Länder (federal states), no national plan exists. . Germany has introduced a number of new measures to improve waste prevention, and reuse.efforts need to be continued to shift recyclable and reuseable waste away from incineration. A priority action for waste management plans is added. 2022 priority actions ·Shift reuseable and recyclable waste away from incineration. ·Ensure that regional waste management plans in line with the revised Waste Framework Directive are in place. 2. Biodiversity and natural capital The 2030 EU biodiversity strategy adopted in May 2020 aims to put the EU’s biodiversity on a path to recovery and sets out new targets and governance mechanisms to achieve healthy and resilient ecosystems. In particular, the strategy sets out ambitious targets to: (i) protect a minimum of 30 % of the EU’s land area and 30 % of its sea area and integrate ecological corridors, as part of a true trans-European nature network; (ii) strictly protect at least a third of the EU’s protected areas, including all remaining EU primary and old-growth forests; (iii) effectively manage all protected areas, defining clear conservation objectives and measures, and monitoring them appropriately. The strategy also sets out an EU nature restoration plan – a series of concrete commitments and actions to restore degraded ecosystems across the EU by 2030, and manage them sustainably, addressing the key drivers of biodiversity loss. In 2015, the 2020 nature conservation action programme was adopted to give fresh impetus to implementation of the 2007 national strategy on biological diversity and address the persistent negative trend in biodiversity due to failure to implement key policy changes. A new biodiversity strategy is being prepared to take into account the EU 2030 biodiversity atrategy and to implement the results of the Convention on Biological Diversity . Nature protection and restoration The EU’s Habitats and Birds Directives are key legislative tools to deliver on the targets in the EU’s biodiversity strategy for 2030, and are the cornerstone of European legislation aimed at conserving the EU’s wildlife. Natura 2000, the largest co-ordinated network of protected areas in the world, is the key instrument to achieve the objectives in the Birds and Habitats Directives' . These objectives are (i) to ensure the long-term protection, conservation and survival of Europe’s most valuable and threatened species and habitats; and (ii) to maintain or restore the favourable conservation status of these species and habitats. Key milestones towards meeting the objectives of the Birds and Habitats Directives are: (i) the setting up of a coherent Natura 2000 network; (ii) the designation of sites of Community importance (SCIs) as SACs ; and (iii) the setting of conservation objectives and measures for the Natura 2000 sites.

Figure 6: Marine & terrestrial protected area coverage, 2021





Setting up a coherent network of Natura 2000 sites Germany hosts 93 habitat types and 195 species covered by the Habitats Directive. The country also hosts populations of nearly 120 bird taxa listed in Annex I to the Birds Directive. Nature protection in Germany falls within the competence of the 16 Länder and the federal authorities are responsible for the exclusive economic zone. By 2021, 15.5 % of the national land territory of Germany was covered by Natura 2000 (EU coverage 18.5 %), with special protection areas (SPAs) classified under the Birds Directive covering 11.3 % (EU coverage 12.8 %) and sites of community importance (SCIs) under the Habitats Directive covering 9.4 % (EU coverage 14.2 %) of Germany’s territory . The latest assessment of the SCI part of the Natura 2000 network shows that there is only one insufficiency in designation for the species Lycaena helle in the Alpine biogeographical region (Bavaria). Germany is expected to complete its Natura 2000 network by the end of 2022. Considering both Natura 2000 and other nationally designated protected areas, Germany legally protects 37.2 % of its terrestrial areas (EU 27 coverage 26.4 %) and 45.9 % of its marine areas (EU 27 coverage 10.7 %). Germany strictly protects 7.2 % of the EU’s protected areas (SCI and SPA). Figure 7: Natura 2000 terrestrial protected area coverage, 2021 Designating SACs and setting conservation objectives and measures The Commission considers that the quality of the set objectives and measures is insufficient for all 4 544 SACs in Germany. The main legal dispute with Germany is about how specific and detailed conservation objectives have to be set for each site designated under the Habitats Directive. In the Commission’s view, conservation objectives specify which conditions species and habitat types shall achieve in a site so that the site can contribute to the overall goal of favourable conservation status of these species and habitat types. They are the basis for the conservation measures to be established and the benchmark for the appropriate assessments in the context of project approvals in Natura 2000 sites. The Commission believes that these conservation objectives have to be specified also in quantitative terms for each relevant protected feature in the sites. The case is currently before the EU Court of Justice; in February 2022 the Commission lodged the Court application. In addition 33 (SPA under the Birds Directive are still not legally protected under national law (from which 32 are located in Lower Saxony) and 283 SPAs do not have conservation measures (state of play August 2021). Progress in maintaining or restoring favourable conservation status of species and habitats To measure the performance of Member States, Article 17 of the Habitats Directive and Article 12 of the Birds Directive require reporting on the progress made towards maintaining or restoring the favourable conservation status of species and habitats.

According to the report submitted by Member States on the conservation status of habitats and species required under Article 17 of the Habitats Directive for 2013-2018, 29.7 % of habitats were assessed as being in good conservation status in 2019 compared to 28.1 % in the previous reporting period (2007-2012). As forprotected species, 25.6 % were assessed as being in good conservation status in 2018 compared to 24.6 % reported under the previous reporting period (2007-2012). However, less than 10 % of German protected grassland habitat types show a favourable conservation status. Regarding birds 61 % of the breeding species showed short-term increasing or stable population trends At the same time, the share of habitats in unfavourable conservation status decreased slightly from 69.8 % to 69.2 % while the share of assessments for species in unfavourable conservation status grew from 60.4 % to 63.3 %. The main pressures are agriculture and changes in land use (both, intensification and abandonment) together with nitrogen deposition from agriculture and traffic sources. Figure 8: Assessments on conservation status for habitats for 2007-2012 and 2013-2018 reporting periods On 2 December 2021 the Commission decided to refer Germany to the EU Court of Justice for failing to comply with its obligation to prevent the deterioration of two habitat types: low hay meadows and mountain hay meadows. In the Commission’s view this is due to largely unsustainable agricultural practices. These habitat types have significantly diminished in size or disappeared completely at various sites in recent years. The two habitat types play a vital role for pollinating insects, bees and butterflies, and are protected as part of the Natura 2000 network. Figure 9: Assessments on conservation status for species for 2007-2012 and 2013-2018 reporting periods Germany has one of the highest shares of red-listed species and habitat types for several classes. these still show a negative tendency. Germany is among the countries with a high percentage of peatlands. However, only 5 % of near-natural peatlands remain in Germany. The conservation status of habitats in the Continental and Atlantic zones is reported to be either unfavourable or bad. Peatlands contribute to 6.7 % of Germany’s greenhouse gas emissions overall, but a much higher share in the northern Länder, where peatlands are concentrated. The new government has announced a new action programme on natural climate protection. It aims to create synergies between nature and climate protection by restoring peatlands, forests, floodplains, grassland and marine and coastal ecosystems. Additional financing from the Energy and Climate Fund will be made available. In 2019, Germany received three priority actions. As the Natura 2000 network designation is nearly complete this part is dropped, as is the priority action on development and promotion of guidance; the remainder of the priority actions is retained. 2022 priority actions ·Put in place clearly defined conservation objectives and the necessary conservation measures for the sites, and provide adequate resources for their implementation in order to maintain/restore species and habitats of Community interest to a favourable conservation status across their natural range. ·Ensure that pressures from agriculture are adequately addressed and that the sector complies fully with nature protection. Bringing nature back to agricultural land and restoring soil ecosystems Agricultural land

The biodiversity strategy works alongside the new farm to fork strategy and the new common agricultural policy (CAP) to support and achieve the transition to fully sustainable agriculture. The biodiversity and farm to fork strategies have set four important targets for 2030: - a 50% reduction in the overall use of – and risk from – chemical pesticides; - a 50 % reduction in the use of more hazardous pesticides; - a 50 % reduction in losses of nutrients from fertilisers while ensuring there is no deterioration of soil fertility (which will result in a 20 % reduction in the use of fertilisers); - bring back at least 10 % of agricultural area under high-diversity landscape features and increase areas under organic farming to at least 25 %Germany, with an estimated 9.59 % of its area under organic farming, is marginally above the EU average of 9.07 %. (2020 data, Eurostat)., The increase in organic farming has been moderate over the last decade and will need to be accelerated in view of the new government’s more ambitious objective of 30 % organic farming by 2030. Figure 10: Share of total utilised agricultural area occupied by organic farming per Member State, 2020 On environmental performance, the situation of Germany’s agricultural sector varies depending on the part of the country. Some Länder, especially in the north-west and south-east, have high livestock density and land use intensification, which significantly affect ecosystems. Diffuse agriculture pollution is the most significant pressure on both surface and groundwater bodies with nitrate being the worst pollutant, causing failure to achieve good chemical status in groundwater. Germany has failed to reverse or halt the decline in protected habitats and species associated with agricultural land. In 2020, 14 % of agricultural land in Germany was under contract to contribute to biodiversity and landscapes. Soil ecosystems Soil is a finite and extremely fragile resource. It is increasingly degrading in the EU. The new EU soil strategy, adopted on 17 November 2021, stresses the importance of soil protection, of sustainable soil management and of restoring degraded soils to achieve the Green Deal objectives as well as land degradation neutrality by 2030. This entails: (i) preventing further soil degradation; (ii) making sustainable soil management the new normal; (iii) taking action for ecosystem restoration. The new government programme states that Germany will update its national soil protection law by strengthening the precautionary aspect and the contribution of soils for climate change adaption and climate protection as well as for preservation of soil biodiversity. One factor in the degradation of soil ecosystems is the area of soil that is sealed or artificialised . The net land taken (land ‘taken’ means land that is sealed or artificialised) per year in 2012-2018 can be seen as a measure of one significant pressure on nature and biodiversity – land use change. At the same time, land use change constitutes an environmental pressure on people living in urbanised areas.

Despite a reduction in the last decade (land take was over 1 000 km2/year in the EU-28 between 2000 and 2006), land take in the EU-28 still amounted to 539km2/year in 2012-2018 . The concept of ‘net land take’ combines land take with the return of land to non-artificial land categories (recultivation). While some land was recultivated in the EU-28 in 2000-2018, 11 times more land was taken than returned. Germany ranks above the EU average with a net land take of 119.9 m2/km2 (EU-27 average: 83.8 m2/km2). In its national sustainability strategy, (Deutsche Nachhaltigkeitsstrategie) Germany set itself the target of restricting daily landtake to under 30 ha by 2030. Daily land take for the period 2017-2020 was 54 ha. In 2018, Germany updated its reporting on land degradation according to the Performance Review and Implementation System (PRAIS3) reporting platform, with actions intended to remedy the degradation identified. Figure 11: Land take and re-cultivation in EU27 (m2/km2), 2012-2018 However, Germany has not yet committed to set targets for land degradation neutrality under the United Nations Convention to Combat Desertification. Forests and timber The EU forest strategy for 2030, adopted in July 2021, is part of the ‘Fit for 55’ package. The strategy promotes the many services that forests provide. Its key objective is to ensure healthy, diverse and resilient EU forests that contribute significantly to the strengthened biodiversity and climate ambitions. Forests are important carbon sinks and conserving them is vital if the EU is to achieve climate neutrality by 2050 27 % of EU forest area protected under the Habitats Directive, less than 15 % of assessments show a favourable conservation status. Bad conservation status increased from 27 % to 31 % in the EU compared to 2015. Forests cover 30.97 % of Germany but less than 40 % of assessments of EU-protected forest habitats show a good conservation status . German forests are affected by a combination of factors: exceptional heatwaves, droughts, bark beetle outbreaks and forest fires. Climate change and unsustainable forest management practices (monocultures) have led to high economic losses for foresters due to emergency wood-cutting. Figure 12: Conservation status of forests protected under the Habitats Directive in EU Member States, 2013-2018 (% assessments) The European Union Timber Regulation (EUTR) prohibits the placing on the EU market of illegally harvested timber. In accordance with the EUTR, EU Member States’ competent authorities must conduct regular checks on operators and traders, and apply penalties in case of non-compliance. With the amendment of Article 20 of the EUTR, reporting every 2 years has been changed to annual reporting, and covers the calendar year as of 2019. Between March 2017 and February 2019, Germany carried out 786 checks on domestic timber operators. It also carried out 500 checks on operators importing timber. It is estimated that Germany had 2 000 000 operators placing domestic and 27 000 operators placing imported timber types onto the internal market over the reporting period . The new Deforestation Regulation will repeal and replace EUTR, as it will essentially integrate and improve the existing system to control timber legality.

Invasive alien species (IAS) IAS are a key cause of biodiversity loss in the EU (alongside changes in land and sea use, overexploitation, climate change and pollution). Besides inflicting major damage on nature and the economy, many IAS also facilitate the outbreak and spread of infectious diseases, posing a threat to humans and wildlife. The implementation of the EU Invasive Alien Species Regulation and other relevant legislation must be stepped up. The biodiversity strategy for 2030 aims to manage recognised invasive alien species and decrease the number of ‘red list’ species they threaten by 50 %. The core of Regulation (EU) 1143/2014 IAS (the IAS Regulation) is the list of IAS of Union concern. The total number of IAS of Union concern is currently 66, of which: 30 are animal species; 36 are plant species; 41 are primarily terrestrial species; 23 are primarily freshwater species; 1 is a brackish-water species; and 1 is a marine species According to a 2021 report on the review of the application of the IAS Regulation, progress was being made towards certain objectives, such as creating a coherent framework for addressing IAS at EU level and increasing awareness of the problem of IAS. The report also identified some challenges and areas for improvement. However, given that implementation deadlines for the IAS Regulation were staggered from July 2016 to July 2019, it is still too early to draw conclusions on several aspects of implementation. A 2021 report on the baseline distribution shows that of the 66 species on the Union list, 39 have been observed in the environment in Germany. The spread can be checked in Figure 13. Figure 13: Number of invasive alien species of EU concern, based on available georeferenced information for Germany, 2021 2022 priority actions ·Put in place clearly defined conservation objectives and the necessary conservation measures for the sites, and provide adequate resources for their implementation in order to maintain/restore species and habitats of Community interest to a favourable conservation status across their natural range. ·Ensure that pressures from agriculture are adequately addressed and that the sector complies fully with nature protection. Marine ecosystems

The EU’s biodiversity strategy for 2030 aims to: (i) substantially reduce the negative impacts on sensitive species and habitats in marine ecosystems; (ii) achieve good environmental status; and (iii) eliminate or reduce the by-catch of species to a level that allows species recovery and conservation . The Marine Strategy Framework Directive (MSFD) requires Member States to achieve good environmental status (GES) for their marine waters. To that end, Member States must draw up marine strategies for their marine waters, and cooperate with Member States sharing the same marine region or subregion. These marine strategies comprise different steps to be developed and implemented over six-year cycles.The MSFD also requires Member States by 15 October 2018 to draw up a set of GES characteristics for each descriptor (Article 9), and to provide an initial assessment of their marine waters (Article 8). The Commission then assesses whether this constitutes an appropriate framework to meet the requirements of the Directive.The Commission assessed Germany’s 2018 determinations of GES for each of the MSFD’s 11 descriptors and determined their level of adequacy in relation to the Commission’s Decision . A good or very good score indicates that the national determinations of GES are well aligned with requirements of the Commission GES Decision, providing qualitative and quantitative national environmental objectives to be achieved for their marine waters. Figure 14: Level of adequacy of GES determination by Germany (ANS and BAL regions) with criteria set under the Commission GES Decision – Article 9 (2018 reporting exercise) Germany has two marine sub-regions: ·ANS-NE Atlantic: Greater North Sea. In this marine sub-region, 6 out of 11 determinations of GES were assessed as good or very good. The national determination of GES by Germany is coherent for 6 of the 11 descriptors. ·BAL-Baltic Sea. In this marine subregion, 5 out of 11 determinations of GES were assessed as good or very good. The national determination of GES by Germany is coherent for 5 of the 11 descriptors. The MSFD also requires that Member States make an assessment of the current environmental status of their marine waters in relation to the determination of GES. A good or very good score indicates Member States has good capabilities to assess their marine environment in accordance with the requirements set out in the Commission GES Decision. Figure 15: Level of adequacy of national assessment of Germany’s marine environment (ANS and BAL regions) with criteria set under the Commission GES Decision – Article 8 (2018 reporting exercise) ·In the marine sub-region ANS-NE Atlantic: Greater North Sea, 5 descriptors out of 11 were scored as good or very good. Germany’s assessment of its marine environment is coherent with requirements set under the Commission GES Decision for 5 of the 11 descriptors. ·In the marine subregion BAL-Baltic Sea, 4 descriptors out of 11 were scored as good or very good. Germany’s assessment of its marine environment is coherent with requirements set under the Commission GES Decision for 4 of the 11 descriptors. Germany is missing data for one descriptor, D9 Contaminants in seafood. As highlighted in the Commission’s report on the implementation of the MSFD, while regional cooperation has improved since the adoption of the MSFD, more cooperation is needed to attain full regional coherence of the marine strategies, as required by the Directive. Furthermore, in March 2022, the Commission published a Communication with recommendations for Member States. According to the Commission’s assessment Member States need to step up their efforts to determine the good environmental status and the use of the criteria and methodological standards according to the Commission GES Decision. The above considerations form the basis for the 2022 priority actions. 2022 priority actions ·Ensure regional cooperation with Member States sharing the same marine (sub)region to address predominant pressures. ·Implement the recommendations made by the Commission in the staff working document accompanying the Communication on recommendations for each Member State and region on the 2018 updated reports for Articles 8, 9 and 10 of the MSFD.

Ecosystem assessment and accounting The EU biodiversity strategy for 2030 calls on Member States to better integrate biodiversity considerations into public and business decision making at all levels and to develop natural capital accounting. The EU needs a better performing biodiversity-observation network and more consistent reporting on the condition of ecosystems. There has been further progress in implementing the mapping and assessment of ecosystems and their services initiative (MAES) in Germany with a good level of implementation (see Figure 16). This assessment is based on 27 implementation questions and is updated every 6 months. Figure 16:ESMERALDA MAES Barometer, January 2016 - March 2021 Progress on ecosystem accounting implementation is assessed at national scale based on 13 questions (see Figure 17). Figure 17: Ecosystem accounting Barometer, September 2021

Some ecosystem accounts are already incorporated into the statistical system related to the National Sustainable Development Strategy of Germany. Now, the priorities for Germany are to take the first steps in implementing the accounting framework, focussing on biodiversity conservation targets in urban and rural areas. Following this, the knowledge gathered in the process will feed into a reporting system to inform policy on the full range of ecological and economic effects of policy decisions. The ecosystem extent account for Germany is available on a regional and national scale. Ecosystem services accounts in biophysical and economic terms have been developed for the following: natural soil fertility of cropland and grassland, amenity value of public urban green spaces, appreciation of species and habitats services, timber and carbon sequestration of woodlands. Biophysical ecosystem services accounts are done for soil erosion mitigation, pollination service potential and recreation services. Accounts of climate gas mitigation and economic accounts of recreation services are on-going. 2022 priority action ·Further capacity building for the National Statistical Agency would be beneficial. The time is right to inform policy makers, the public, business and the finance sector of the potential and advantages of natural capital accounting. Sufficient funding needs to be ensured and co-operation, both national and international and better knowledge sharing is encouraged. 3. Zero pollution Clean air EU clean-air policies and legislation need to significantly improve air quality in the EU, moving the EU closer to the quality recommended by the WHO and curbing emissions of key air pollutants.

Air pollution and its impacts on ecosystems and biodiversity should be further reduced with the long-term aim of not exceeding critical loads and levels. This requires strengthening efforts to reach full compliance with EU clean air legislation and defining strategic targets and actions for 2030 and beyond. The 2030 zero pollution action plan targets are to reduce the health impacts of air pollution by 55 % and to reduce the EU ecosystems threatened by air pollution by 25 %. The EU has developed a comprehensive suite of air quality legislation, which sets health-based air quality standard and emission reduction commitments by Member State for a number of air pollutants. Air quality in Germany continues to give cause for serious concern. The latest available annual estimates (for 2019) by the European Environment Agency point to about 53 800 premature deaths (or 560 800 years of life lost (YLL)) attributable to fine particulate matter concentrations , 3 350 (36 200 YLL) to ozone concentrations and 6 000 (62 500 YLL) to nitrogen dioxide concentrations . Figure 18: Emission trends of main pollutants / GDP in Germany, 2005-2019 The emissions of key air pollutants have decreased significantly in Germany over the last years, while GDP growth continued (see graph). According to the latest projections required under Article 10(2) of the National Emission Reduction Commitments Directive , Germany projects to reach emission reduction commitments for most air pollutants covered by the Directive for 2020-2029 except NH3. The current submission of air pollutant emission projections does not demonstrate reaching the emission reduction commitments for 2020-2029 and for 2030 onwards for NOX and the emission reduction commitment for PM2.5 from 2030 onwards. According to the latest inventory data submitted by Germany, which is still to be reviewed by the Commission, , Germany is in compliance with the emission reduction commitments for all pollutants in 2020. Germany submitted its national air pollution control programme (NAPCP) on 22 May 2019. Figure 19: PM2.5 and NOx emissions by sector in Germany, 2019 For the year 2020, exceedances above the limit values established by the Ambient Air Quality Directive were registered for nitrogen dioxide (NO2) in five air quality zones. Furthermore, for several air quality zones the target values on ozone concentration have not been met. Persistent breaches of air quality requirements, which have severe negative effects on health and environment, are being followed up by the Commission through infringement procedures (mainly over PM10 and NO2 exceedances) covering all Member States concerned, including Germany for exceedances of PM10 and NO2 limit values in several air quality zones. The EU Court of Justice has delivered a judgment on exceedances of NO2 limit values (C-635/18; COM vs Germany) confirming non-compliance with Directive 2008/50/EC. The aim is that appropriate measures are put in place to bring all air quality zones into compliance. In the 2019 EIR, Germany received five priority actions; related to taking specific actions under the NAPCP and the National Emissions Ceiling Directive. As the current submission of air pollutant emission projections does not demonstrate reaching the emission reduction commitments for all pollutants, the priority action with on the NAPCP is retained. The other priority actions addressed reductions in nitrogen oxides and particulate matter, where Germany has made further progress. No exceedances for PM10 were reported in 2020.There were still exceedances for NO2 in five air quality zones in 2020. 2022 priority actions

·As part of the NAPCP, take action towards reducing emissions from the main sources mentioned above. ·Ensure full compliance with EU air quality standards and maintain downward emissions trends for air pollutants to reduce adverse air pollution impacts on health and the economy with a view to reaching WHO guideline values in the future. Industrial emissions The main objectives of EU policy on industrial emissions are to: (i) protect air, water and soil; (ii) prevent and manage waste; (iii) improve energy and resource efficiency; (iv) clean up contaminated sites. To achieve this, the EU takes an integrated approach to the prevention and control of routine and accidental industrial emissions. The cornerstone of the policy is the Industrial Emissions Directive (IED). As announced in the European Green Deal, the Commission carried out an impact assessment for the revision of the IED in 2021 with a view to tabling a proposal in early 2022 .. The revision seeks to enhance the Directive’s contribution to the zero pollution objective, as well as its consistency with climate, energy and circular economy policies. The overview of industrial activities regulated by the IED set out below is based on data reported to the EU Registry (2018). In Germany, around 12 670 industrial installations are required to have a permit based on the IED. This represents an increase of almost 3 000 installations since 2015, largely due to an increase in the number of installations in the waste management sector but also in the rearing of poultry or pigs. The distribution of installations is shown in Figure 20 below. The industrial sectors in Germany with most IED installations in 2018 were the waste management sector (32 %), intensive rearing of poultry and pigs (23 %), the production of chemicals (15 %), followed by power production (5 %), surface treatment of metals (5 %) and food and drink production (5 %). Figure 20: Number of IED industrial installations per sector in Germany, 2018 The industrial sectors identified as contributing the largest burden to the environment for emissions to air were the use of solvents e.g. for surface treatment for non-methane volatile organic compounds (NMVOCs), intensive rearing of poultry or pigs for ammonia (NH3); the power sector for mercury (Hg), sulfur oxides (SOx), arsenic (As) and nitrogen oxides (NOx); the energy sector (such as refining) for nickel (Ni), As, SOx, Cd and Hg; the production of metals for Cd, As, chromium (Cr), Pb, dioxins, Hg and Zn; the production of chemicals for NMVOCs, SOx, NOx and NH3; the waste management sector for dioxins and PM2.5. The breakdown is shown in the following graph. Figure 21: Emissions to air from IED sectors and rest of national total air emissions in Germany, 2018

In 2017, 9 IED installations of Germany were among the top 30 European pollutant release and transfer register (E-PRTR) facilities with the highest absolute damage costs from emissions, including 7 power stations – all burning lignite, one producing iron and steel and one producing chemicals. This should be improved by implementing the emission levels associated with best available techniques (BAT) for large combustion plants . This will – on average and depending on the situation of individual plants – reduce sulfur dioxide emissions by 25 % to 81 %, nitrogen oxide by 8 % to 56 %, dust by 31 % to 78 % and mercury by 19 % to 71 % at EU level. The environmental burdens for industrial emissions to water mainly result from the production of chemicals, production of pulp and paper and the waste management sector for nitrogen, phosphorous and total organic carbon, as well as from the production of ferrous metals and waste incineration for polycyclic aromatic hydrocarbons and from production of chemicals, waste management sector and extractive industry in case of heavy metals. The breakdown, based on E-PRTR data, is presented in the Figure 22 below. Figure 22: Relative releases to water from industry in Germany, 2018 The EU approach to enforcement under the IED creates strong rights for the public to have access to relevant information and to participate in the permitting process for potentially polluting installations. This empowers the public and NGOs to ensure that permits are appropriately granted and that the conditions of these permits are complied with. As part of environmental inspection, competent authorities undertake site visits at IED installations to take samples and to gather necessary information. According to Article 23(4) of the IED, site visits must be carried out between once a year and once every 3 years, depending on the environmental risks posed by the installations.In 2018 Germany carried out 4 883 site visits, mostly to waste sector installations (32 %), the production of chemicals (18 %), followed by the intensive rearing of poultry or pigs (13 %) and the surface treatment of metals (6 %). Figure 23: Number of inspections in IED installations in Germany in 2018 The development of BAT reference documents (BREFs) and BAT conclusions ensures good collaboration with stakeholders and enables better implementation of the IED. Since the last EIR report, BAT Conclusions have been adopted for (i) waste incineration; (ii) the food, drink and milk industries; and (iii) surface treatment using organic solvents including preservation of wood and wood products with chemicals. The Commission relies on the efforts of national competent authorities to implement the legally binding BAT conclusions and associated BAT emission levels in environmental permits, resulting in considerable and continuous reduction of pollution. In 2019, Germany received priority actions to review permits to comply with newly adopted BAT conclusions and to strengthen control and enforcement to ensure compliance with BAT conclusions. These actions have been followed up by the Commission through the reporting by Germany to the EU Registry. It is currently verifying the reported data about permits granted for each installation falling under the IED with Germany. Germany also received a priority action to address water and air pollution from intensive rearing of poultry or pigs. The Commission follows up the latter aspect via the implementation of the BAT conclusions for intensive rearing of poultry or pigs, which were to be reflected in permits by February 2021. As mentioned above, emissions from the energy sector need to be addressed by implementing the BAT conclusions on large combustion plants by August 2021. In 2022, Germany’s reporting to the E-PRTR still shows delays and should be improved. Germany is subject to an infringement. The Commission considers that certain provisions of the IED have not been transposed correctly. Among those, public participation is limited in certain ways, and provisions to enable competent authorities to set in specific cases less stringent emission limit values have not been transposed correctly. 2022 priority actions ·Continue addressing the pollution from large combustion plants, in particular lignite-firing plants. ·Improve the reporting to the E-PRTR.

Major industrial accidents prevention - SEVESO The main objectives of EU policy on the prevention of major industrial accidents are to: (i) control major accident hazards involving dangerous substances, especially chemicals; (ii) limit the consequences of such accidents for human health and the environment; (iii) continuously improve prevention, preparedness and response to major accidents. The cornerstone of the policy is the Directive 2012/18/EU (the Seveso-III Directive). The below overview of industrial plants regulated by Seveso-III Directive, (‘Seveso establishments’), is based on data reported to the eSPIRS database (2018) and the Germany report on the implementation of the Seveso-III Directive for 2015-2018 . In Germany, among the 3 655 Seveso establishments, 2 502 are categorised as lower-tier establishments (LTEs) and 1 153 as upper-tier establishments (UTEs) – based on the quantity of hazardous substances likely to be present. The upper-tier establishements are subject to more stringent requirements. Figure 24 shows the trend in the number of Seveso establishments. Figure 24: Number of Seveso establishments in Germany, 2011, 2014 and 2018 According to Germany, an external emergency plan (EEP) is required for 1 081 upper-tier establishements. In 2018, 1 146 such establishements had an EEP, 930 of which had been tested over the last 3 years. The summary is shown in Figure 25. Drawing up and testing EEPs is essential to enable the proper preparation and effective implementation of actions to protect the environment and the population in the event of a major industrial accident. Figure 25: Situation as regards EEP in Germany, 2018

Information to the public referred to in Annex V of the Seveso-III Directive – especially about how the public concerned will be warned in case of a major accident; the appropriate behaviour in the event of a major accident; and the date of the last site visit – are permanently available for 77 % of the Seveso establishments in Germany. Figure 26 presents the share of upper-tier establishments for which information on safety measures and requisite behaviours were actively made available to the public in recent years. This is an important provision of the Seveso-III Directive as the public’s knowledge of this information may reduce the consequences of a major industrial accident. Germany is subject to an infringement procedure related to the transposition of the Seveso-III Directive. Germany has not correctly transposed the Directive in relation to notification requirements, major accident prevention policy, information to the public, public consultation,s participation rights in decision-making and time limits regarding safety reports and emergency plans. Figure 26: Share of UTE for which information on safety measures and requisite behaviours were actively made available to the public in Germany, 2011, 2014 and 2018 2022 priority action ·Strengthen control and enforcement to ensure compliance with Seveso-III Directive provisions, especially on information to the public and EEPs. Noise The Environmental Noise Directive provides for a common approach to avoid, prevent and reduce the harmful effects of exposure to environmental noise although it does not set noise limits as such. The main instruments it uses in this respect are strategic noise mapping and planning. A relevant 2030 zero pollution action plan target is a reduction by 30% of the share of people chronically disturbed by transport noise compared to 2017. Excessive noise from aircraft, railways and roads is one of the main causes of environmental health‐related issues in the EU. It can cause ischeemic heart disease, stroke, interrupted sleep, cognitive impairment and stress. In Germany, based on a limited set of data, environmental noise is estimated to cause at least around 1600 premature deaths and 5100 cases of ischaemic heart disease every year. Moreover, some 840 000 people suffer from disturbed sleep. In Germany, overall noise exposure decreased by 8 % between 2012 and 2017, based on reported data. On the basis of the latest full set of information that has been analysed (noise maps and action plans for Germany, June 2021), Germany still lacks action plans for a number of urban areas, and inn particular major roads. These shortcomings are subject of an infringement proceeding. In the 2019 EIR, Germany received a priority action to complete noise action plans, but there has been only limited progress since then. 2022 priority action ·Complete action plans on noise management.

Water quality and management EU legislation and policy requires that the impact of pressures on transitional, coastal and fresh waters (including surface and ground waters) be significantly reduced. Achieving, maintaining or enhancing a good status of water bodies as defined by the Water Framework Directive will ensure that EU citizens benefit from good quality and safe drinking and bathing water. It will further ensure that the nutrient cycle (nitrogen and phosphorus) is managed in a more sustainable and resource-efficient way. Water Framework Directive The Water Framework Directive (WFD) is the cornerstone of EU water policy in the 21st century. The WFD and other water-related legislation set the framework for sustainable and integrated water management, which aims at a high level of protection of water resources, prevention of further deterioration and restoration to good status. By March 2022, Member States had to report the third set of river basin management plans (RBMPs) under the WFD. Germany recently reported its third RBMPs. The Commission will assess the reported status and progress, checking what measures have been taken in reponse to findings identified when the second RBMPs were assessed. In December 2021, the Commission published the 6th Implementation Report, which assesses implementation of the WFD and the Floods Directive. This report includes an interim assessment of progress on: (i) implementation of the programmes of measures; and (ii) the new priority substances. It follows from the assessment report for Germany that the environmental objectives for many water bodies will not be met by 2021 and may not even be met by 2027. A larger part of the measures was scheduled for the second half of the 2015-2021 planning cycle. The second set of RBMP reports and data reveal that in Germany only 8.1 % of all surface water bodies had good ecological status (with 2.8 % unknown), and all surface water bodies (100 %) failed to achieve good chemical status. For groundwaters, 36 % failed to achieve good chemical status but only 4.3 % are in poor quantitative status. Figure 27 illustrates the proportion of surface water bodies in Germany and other European countries that failed to achieve good ecological status. Figure 27: Proportion of surface water bodies (rivers, lakes, transitional and coastal waters) in less than good ecological status per River Basin District Figure 28 shows the proportion of surfacewater bodies in Germany and other European countries failing to achieve good chemical status. For Germany this is 100 %, if one includes water bodies failing due to substances behaving as ubiquitous PBTs (persistent, bio-accumulative, toxic chemicals). Without uPBTs, 9 % of surface water bodies fail to achieve good chemical status. Figure 28: Proportion of surface water bodies not achieving good chemical status Under the IED framework Germany showed a significant decrease over the last decade (26.6 %) in industrial releases of heavy metals like Cd, Hg, Ni, Pb and in total organic carbon(19.1 %) to water . The total amount of water abstracted every year (corresponding to the 2019 baseline) in Germany from surface and groundwater sources is 27 075.75 hm3 (EEA, 2022). The percentage for water abstraction per sector is 0.96 % for agriculture, 19.42 % for public water supply, 49.92 % for electricity cooling, 11.93 % for manufacturing, 12.42 % for manufacturing cooling and 5,35 % for mining and quarrying, as illustrated in the following figure. Germany uses water registers to control water abstractions, as well as a permitting system, with permits regularly reviewed. Small abstractions are exempted according to German law, but not all are registered. So, there is no record of the extent of exemptions in practice since they are established by law. Only a few Länder require notification of the uses that are exempt from the obligation to have a permit. Overall, the potential for abstraction is established and quantities of water resources are known.

Figure 29: Water abstraction per sector in Germany In Germany, the water exploitation index plus (WEI+) is 5.46 %, which is far below the 20 % generally considered to be an indication of water scarcity. The bar below presents the WEI+ index in Germany and other EU countries. Germany is ranked 11th (from high to low score) in the EU. Figure 30: Water exploitation index plus (WEI+) inEU, 2017 Floods Directive As mentioned above, the Commission published the 6th Implementation Report on the Directive in December 2021. It includes a review and update of the preliminary flood risk assessments during the second cycle (2016-2021). The assessment report showed that Germany should develop a methodology for defining potential adverse consequences of future floods. However, it is worth mentioning as good practice that plausibility checks on the results of the risk assessment on future floods were carried out by specialists and local staff of the water management authorities, with the involvement of local authorities and, if necessary, other relevant local experts. Another good practice is the LAWA joint assessment tool, which aims to reduce flood risk by evaluating the objectives and catalogues of measures from the 1st cycle plan. The tool is used to evaluate the achievement of objectives and measures adopted under the 1st cycle plan. It enables authorities to collect and report the status of flood measures for all Länder. Germany recently adopted the second generation of flood risk management plans under the Floods Directive. The Commission will assess progress and publish a new report, as it did in 2019. Drinking Water Directive On the Drinking Water Directive no new assessment of the quality of drinking water is available since the 2019 EIR. The quality of drinking water in Germany has not been indicated as an area of concern. The recast Directive entered into force on 12 January 2021, and Member States have until 12 January 2023 to transpose it into their national legal system. Germany will have to comply with these reviewed quality standards. Bathing Water Directive On the Bathing Water Directive, Figure 31 shows that in 2020, out of the 2 304 reported bathing waters from Germany, 89.9 % were of excellent quality and 4.9 % of good quality . Detailed information on Germann bathing waters is available from a national portal and via an interactive map viewer from the European Environment Agency . Figure 31: Bathing water quality in Europe in the 2020 season



Figure 32: Germany, Bathing water quality 2017-2020 Nitrates Directive According to the last report on the implementation of the Nitrates Directive, referring to the period 2015-2018, groundwater quality has not improved, and water pollution by nitrates remains a serious concern. There are continuing acute problems with groundwater and eutrophication in the Baltic and North Seas. 27 % of monitoring stations exceeded the level of 50 mg nitrate per litre and a large number of stations show a strong increase. A very high number (54 %) of the surface waters are found to be eutrophic. Of the Member States, Germany has the second-highest number of monitoring stations with average nitrate levels exceeding 50 mg/l. One source of pressure is its livestock density, which remained more or less stable compared to 2012-2015. There is a strong correlation between regional animal density and hot spots where water pollution has been identified. Germany was referred to the EU Court of Justice for failing to take tougher measures to combat water pollution caused by nitrates. In June 2018, the Court confirmed that the measures in the action programmes in force at the time of the referral were insufficient to meet the aims of the Directive. It held that Germany had failed to fulfil its obligations ( insufficient rules to limit the application of fertilisers, additional measures for contaminated areas (red zones), closure periods, and fertilisation on steeply sloping ground. Giventhe insufficient implementation of the Court ruling, the Commission sent a Letter of Formal Notice under Article 260 of the Treaty on the Functioning of the European Union in July 2019 urging Germany to fully comply with the judgment. The last update of national fertiliser legislation dates from 1 May 2020. Germany needs to correctly identify the polluted areas where reinforced measures to reduce nutrient pollution should apply. Urban Waste Water Treatment Germany fully complies with the Directive on Urban Waste Water Treatment (UWWTD). Figure 33: Proportion of urban waste water that meets all requirements of the UWWTD (collection, biological treatment, biological treatment with nitrogen and/or phosphorus removal) in compliant urban areas of the UWWTD (‘compliance rate’), 2018 In 2019 Germany received a priority action on the Nitrates Directive which is retained, as no progress has been made. With regard to the Water Framework Directive and Floods Directive, part of the priority actions are considered fulfilled, based on the findings of the 6th Implementation Report. 2022 priority actions ·Take steps to improve time and frequency of monitoring. ·Continue efforts to counteract nutrient pollution from agriculture. ·Ensure rapid compliance with the Nitrates Directive by revising the rules on the identification of polluted areas and by taking appropriate measures to address serious groundwater pollution, especially in intensive farming areas. Chemicals The EU seeks to ensure that chemicals are produced and used in a way that minimises any significant adverse effects on human health and the environment. In October 2020, the Commission published its chemicals strategy for sustainability - “Towards a Toxic-Free Environment which lead to some systemic changes in EU chemicals legislation. The strategy is part of the EU’s zero-pollution-ambition – a key commitment of the European Green Deal.

The EU chemical legislation provides baseline protection for human health and the environment. It also ensures stability and predictability for businesses operating within the single market. Since 2007, the Commission has gathered information on the enforcement of the Regulation on the Registration, Evaluation, Authorisation and Restriction of Chemicals (‘the REACH Regulation’) and the Regulation on Classification, Labelling and Packaging (‘CLP Regulation’). In December 2020, the Commission assessed the Member States’ reports on the implementation and enforcement of these Regulations , in line with Article 117(1) of the REACH Regulation and Article 46(2) of the CLP Regulation. According to the latest available data, national enforcement structures have not changed much in recent years. However, it is apparent from this report that there are still many disparities in the implementation of the REACH and CLP Regulations, and notably in the area of law enforcement. Recorded compliance levels in Member States seem to be quite stable over time, but with a slight worsening trend, which is likely due to: (i) enforcement authorities being more effective in detecting non-compliant products/companies; and (ii) more non-compliant products being put on the EU market.According to the latest available data, national enforcement structures have not changed much. However, it is apparent from this report that there are still many disparities in the REACH-CLP implementation and notably in the area of the law enforcement among the Member States. The recorded compliance levels seem to be quite stable over time, but with a slight worsening trend likely due to enforcement authorities being more effective in detecting noncompliant products/companies and more non-compliant products being put on the EU market. In August 2021, the Commission published an assessment of the enforcement of the two main EU Regulations on chemicals using a set of indicators on different aspects of enforcement. Responsibility for checking compliance with both REACH and CLP Regulations in Germany lies with the Länder authorities : Each of the 16 Länder has its own hierarchy of authorities and the respective responsibilities vary between the federal states. Germany has drawn up and fully implemented enforcement strategies for both REACH and CLP . Their content consists of: ·Enforcement strategy at federal state level with own enforcement priorities and projects ·Risk-based approach to enforcement and reactive enforcement ·Joint strategy across Länder for market surveillance Projects are usually evaluated after completion. Experience gained from this is shared with other federal states. In some federal states where the enforcement focus is on imports, close cooperation with the customs authorities takes place. As a rule, all infringements of REACH are classed as ‘serious’ or ‘very serious’ environmental administrative offences. If the infringement is sufficiently serious, the competent authority may decide to impose further penalties in addition to a fine. That authority may also, where necessary, order the provisional seizure of assets and documents. In Germany, resources are considered proportionate to REACH and CLP enforcement . There were 8 195 REACH controls carried out in the reporting period (2019) and 24 961 CLP controls. The number of non-compliant cases for both REACH and CLP controls is above the average . Figure 34: Percentage of non-compliance cases out of the total number of REACH and CLP controls during 2019 per Member State and compared to the EU average 2022 priority actions ·Upgrade the administrative capacities on implementation and enforcement towards zero tolerance of non-compliances.

4. Climate action In line with the Paris Agreement and as part of the European Green Deal, the European Climate Law sets the EU target of reaching climate neutrality by 2050 and reducing greenhouse gas (GHG) emissions by 55% by 2030 compared to 1990. The law also limits the contribution that carbon removals can make towards emission reductions in 2030 to ensure a sufficient mitigation effort. The EU and its Member States submitted updated Nationally Determined Contribution (NDC) to the UNFCCC in December 2020. The EU is working across all sectors and policies to cut GHG emissions and make the transition to a climate-neutral and sustainable economy, as well as addressing the unavoidable consequences of climate change. EU climate legislation incentivises emissions reductions from power generation, industry, transport, the maritime sector and fluorinated gases (F-gases) used in products. For road transport, EU legislation requires the GHG intensity of vehicle fuels to be cut by 6% by 2020 compared to 2010 and sets binding GHG emission standards for different vehicle categories . Under the F-gas Regulation, the EU’s F-gas emissions will be cut by two thirds by 2030 compared with 2014 levels. From 2021, emissions and removals of GHGs from LULUCF have been included in the EU emission-reduction efforts. The EU adaptation policy is an integral part of the European Green Deal. From 2021, Member States are required to report on their national adaptation policies , as the EU Climate Law recognises adaptation as a key component of the long-term global response to climate change. Member States will be required to adopt national strategies, and the EU will regularly assess progress as part of its overall governance on climate action. The updated EU adaptation strategy, published in February 2021, sets out how the EU can adapt to the unavoidable impacts of climate change and become climate resilient by 2050. Key national climate policies and strategies Germany submitted its integrated national energy and climate plan (NECP) for 2021-2030. The work builds on long-term energy and climate plans, including the long-term strategy to reduce greenhouse gas emissions (2019). Achieving Germany’s domestic and European climate ambitions will require sustained efforts. In July 2021, Germany amended its climate law, thereby committing to climate neutrality by 2045 and to greenhouse gas emission reductions by 2030 of -65 % compared to 1990 levels. Germany is strongly stepping up public investment, to which its RRP also contributes. The latest policies and measures set out in Germany’s 2030 climate action programme and climate law help close the gap to its new binding 2030 target. In its RRP, Germany allocates 42 % of the plan to climate objectives and outlines crucial reforms and investments to further the transition to a more sustainable, climate-neutral and climate-resilient economy. The reforms are expected to support Germany’s decarbonisation and energy objectives and are a step towards achieving climate neutrality. However the RRP’s size of €25.6 billion makes up for 0.74% of Germany’s GDP and will therefore have a rather supporting function in Germany's ambitious climate policy. Measures in the area of climate action and the energy transition include significant efforts for the development of a well-functioning hydrogen economy, measures to promote climate-friendly mobility, and sizeable investment in energy-efficient building renovation ( see Chapter 5). The climate adaptation measures of the federal government are guided by the German adaptation strategy (DAS). It serves as the federal government’s strategic framework to guide its adaptation-related policies and activities. The aim is to decrease the vulnerability of German society, economy and environment and to strengthen adaptive capacities. The strategy provides a policy framework and facilitates a cross-sectoral approach. In Germany, climate change adaptation is an ongoing long-term task and is addressed within an institutional and methodological framework agreed at political level. Scientific research and financial support programmes, advisory services and processes for participation and consultation have been set up, along with a continuous reporting system. The country’s emissions have decreased sharply since 1990. Between 1990 and 2020 its greenhouse gas emissions decreased by 41 %. Although its economy has a similar emission intensity to the EU, emissions per capita are above the EU average. Figure 35: Total greenhouse gas emissions (incl. international aviation) in Germany, 1990-2020 Effort sharing target For emissions not covered by the EU’s emmissions trading scheme (ETS), Member States have binding national targets under the Effort Sharing legislation. Under EU legislation, Germany’s target is to reduce greenhouse gas emissions in the non-ETS sectors (buildings, road and domestic maritime transport, agriculture, waste and small industries) by 14 % by 2020 and reduce emissions by 38 % by 2030 compared to 2005 levels. The country’s Effort Sharing emissions in 2019 were above its 2020 target. In its National Energy and Climate Plan, Germany intends to achieve reductions close to its current Effort Sharing target for 2030 of -38 %. Figure 36: Emissions and targets under the Effort Sharing Decision/ Effort Sharing Regulation in Germany, 2020 and 2030 as percentage change from 2005

Figure 37: Emissions, annual emission allocations (AEAs) and accumulated surplus/ deficit of AEAs under the Effort Sharing Decision in Germany, 2013-2020 Key sectoral developments In road transport, the GHG intensity of vehicle fuels in Germany decreased by 3.7 % between 2010 and 2019. The country needs to act swiftly to meet the current EU-wide reduction target of 6 % by 2020. There are several types of action that Member States can take in this regard, for example: (i) further expanding the use of electricity in road transport; (ii) supporting the use of biofuels, and advanced biofuels in particular; (iii) incentivising the development and deployment of renewable fuels of non-biological origin; and (iv) reducing upstream emissions before refining processes. In 2019, road transport in Germany accounted for 19 % of total GHG emissions. Emissions have increased by 3 % compared to 2005. Energy intensity of passenger transport has improved, but remains above the EU average. Against this background, the NECP makes reference to the promotion of innovative mobility technologies (including batteries, hydrogen/fuel cell or gas powered vehicles, plug-in hybrids, and advanced biofuels). Figure 38: Greenhouse gas emissions by sector in Germany –historical emissions 1990-2020, projections 2021-2030 On buildings, Germany submitted its long-term renovation strategy in July 2020. While these policies and measures are important, they are expected to reduce primary energy consumption by only 25 % until 2030. Germany also developed an ambitious ‘Renovate’ component in its RRP, which can help accelerate building renovation. It also includes a measure on climate-friendly wooden construction. Emissions from agriculture have remained fairly stable since 2005. In the land use, land use change and forestry (LULUCF) sector, Germany projects a dramatic decrease of net removals, resulting in significant net emissions by 2030. Reported quantities under the Kyoto Protocol for the LULUCF sector in Germany show net removals of, on average, -27.3 Mt CO2-eq for 2013-2019. In this regard, Germany contributes 7.9 % to the EU-27’s annual average sink of -344.9 Mt CO2-eq. Accounting for the same period reveals net credits of, on average, -47.9 Mt CO2-eq, which represents 41.7 % of the EU-27 accounted sink of -115.0 Mt CO2-eq. Reported net removals and accounted net credits show no trends and little variation. Figure 39: Reported and accounted emissions and removals from LULUCF in Germany Use of revenues from the auctioning of EU ETS allowances Total revenues from the auctioning of emission allowances under the EU ETS between 2012 and 2021 were over EUR 18.5 billion. In Germany, 100 % of revenues are spent on energy and climate projects. All revenues go to a fund for climate and energy projects, which is additionally co-funded from the national budget. 2022 priority actions ·Deploy faster grid expansion swifter planning and approval procedures for onshore wind energy, and addressing investment bottlenecks related to offshore wind to substantially increase electricity consumption from renewable energy sources.

·Continue to use energy R&D to support the energy transition. This includes allocating adequate funding to key priority areas and to monitoring the effectiveness of its RD&D policy. ·Higher and faster investments in sustainable transport infrastructure to make progress on emission reductions. Incentivise investments in climate-friendly production processes throughout the industry sector.

Part II: Enabling Framework: Implementation Tools 5. Financing Environmental investment needs in the European Union Financing environmental measures is essential for their success. Although most financing comes from national sources, various EU funds contribute significantly, helping to close the financing gaps between countries. Post-2020, environmental measures will also be supported by the EU’s COVID-19 Recovery Fund (via the Recovery and Resilience Facility) and the ‘do no significant harm’ principle, which runs across the EU budget. The renewed commitments made at COP26 (Glasgow, October-November 2021) and the Biodiversity Convention(April-May 2022) will also be reflected in the EU budget. Overall environmental investment gaps (EU27) The EU green transition investment needs cover a range of interlinked areas. The additional investment needs over baselines (i.e. the gap between what is needed and what is forecast to be invested if no additional action is taken) for climate, energy and transport were estimated at EUR 390 billion per annum (EU-27), with a further EUR 130 billion to deliver the EU's core environmental objectives. Climate adaptation costs can also be significant, reaching a total of EUR 35-62 billion (narrower scope) or EUR 158-518 billion (wider scope) per year. Those investment needs do reflect the implementation objectives to 2020 and to 2030 (except for climate adaptation which costs are expected to stay for a longer time horizon). A preliminary update of the EU’s core environmental investment gap is provided in Table 1.. Almost 40 % of the environmental investment gap relate to dealing with pollution, accounting for nearly two-thirds of the total if combined with water management. The investment gap in circular economy and waste is estimated to be between EUR 13-28 billion a year, depending on levels of circularity implemented. The annual biodiversity financing gap is estimated at around EUR 20 billion. Table 1: Estimated breakdown of the EU27’s environmental investment gaps, by environmental objective, 2021-2030 (per annum) Environmental objective Estimated investment gap (EU-27, p.a.) EUR billion % Pollution prevention & control 42.8 39 Water management & industries 26.6 24 % Circular economy & waste 13.0 12 % Biodiversity & ecosystems 21.5 20 % R & D & I and other 6.2 6 % Total 110.1 100 % Environmental investment needs in Germany There is a perceptible shift of investment priorities in Germany towards the support to climate, energy and transport policies as it can be appreciated in the recovery and resilience plan (RRP) where 42 % of the Recovery and Resilience Fund will be spent on investments in a wide set of economic sectors such as energy renovation of housing, e-mobility, hydrogen and decarbonisation of industry. In the new coalition agreement and recent budget proposals, financing objectives for climate adaptation and nature protection have been significantly strengthened and increased. The following environmental investment needs have been identified by sector.

Pollution prevention & control The EU’s first clean air outlook under the clean air programme estimated that the total air pollution control costs for Germany to reach the NECD emission reduction requirements (ERRs) by 2030 amount to EUR 12 646 million per year, including EUR 8 227 million for capital investment (assuming the achievement the 2030 climate and energy targets). The second EU’s clean air outlook suggests that, if all relevant legislation adopted up to 2018 (including all air pollution and the 2030 climate and energy targets set in 2018) delivered its full benefits and if Member States also implemented the measures announced in their NAPCPs, the EU would largely achieve the reductions of air pollutant emissions that correspond to the obligations under the NEC Directive for 2030, except for 15 Member States for ammonia (NH3). Germany is one of the Member States at risk of non-compliance with the ammonia emission reduction commitment. Water management Significant investment needs exist to ensure compliance with the Water Framework Directive given that less than 10 % of surface waters have good ecological status. As regards the Floods Directive, regular river flooding results in significant direct damage costs. Climate change is expected to increase storm-related protection needs on the Baltic and North Sea shores. Germany has good compliance with the Urban Wastewater Treatment Directive and high performance of networks. An OECD study estimates additional cumulative investment needs over baselines of EUR 255 billion to 2030 to ensure continued compliance with the Drinking Water Directive and the Urban Waste Water Treatment Directive in the EU27, of which a cumulative EUR 40 billion relates to Germany (with EUR 22.7 billion on capital costs) – which indicates around EUR 4 billion relevant expenditure per annum (including EUR 2.3 billion on capital) on average, 95 % of that relating to wastewater. Moreover, the recent 6th Water Framework Directive and Floods Directive Implementation Report and the financial - economic study accompanying it, are also a relevant source of information in this domain. Waste & circular economy According to a Commission study the capital investments additionally over the baselines required to reach EU recycling targets for EU27 as a whole amount to EUR 15.8 billion for 2021-27. For Germany, those additional needs are estimated at EUR 1.68 billion (EUR 239 million per year on average).. This concerns municipal and packaging waste in the areas of collection, biowaste treatment, recycling reprocessors, waste sorting facilities and waste registry digitalisation, while does not include investment necessary for other key waste streams (plastics, textiles, furniture) or to unlock a higher uptake of circularity and waste prevention across the economy. Biodiversity & ecosystems The recently submitted priority action framework (PAF) for Germany shows that nature protection costs (including Natura 2000) in 2021-27 are EUR 1.5 bilion per annum, including EUR 377 million on one-off costs. This excludes additional costs to implement the Biodiversity Strategy to 2030, including on increased protection and restoration. EU environmental funding 2014-2020 The multiannual financial framework (MFF) for the years 2014-2020 allocated almost EUR 960 billion (in commitments, 2011 prices) for the EU. The commitment to green transition included a 20 % climate spending target and funding opportunities for the environment, in particular, under the European Structural and Investment (ESI) Funds . The 2014-2020 budget was subsequently topped up with over EUR 50 billion (current prices) from REACT-EU for cohesion policy action against coronavirus (COVID-19) . Germany received EUR 33.5 billion from the ESI Funds over 2014-2020 to invest in job creation and a sustainable and healthy European economy and environment. The planned direct environmental investment amounted to EUR 1.9 billion with further EUR 990.9 million identified as indirect environmental investment value, totalling EUR 2.9 billion. The figure below shows an overview of (planned) individual ESI Funds earmarked for Germany (EU amounts, without national amounts). Figure 40: ESI Funds allocated to Germany, including environmental investments 2014-2020 Table 2: Direct and indirect Environmental investments under the ESI Funds in Germany, 2014-2020

Instrument Allocations for the environment (EUR million) Under Cohesion policy (ERDF) Direct environmental investments air quality biodiversity and nature land rehabilitation climate and risk management Indirect environmental investments renewable energy energy efficiency other energy sustainable transport sustainable tourism business development, R&I 2 137.0 1 179.0 34.2 212.1 202.0 730.7 958.0 35.9 444.3 43.5 272.6 47.5 114.3 Under EAFRD/rural development Direct environmental investments climate and risk management Indirect environmental investments renewable energy energy efficiency 649.4 617.1 617.1 32.4 4.9 27.5 Under EMFF Direct environmental investments environmental protection & resource efficiency Indirect environmental investments business development, R&I 116.5 115.9 115.9 0.6 0.6 Under ESI Funds total Direct environmental investments Indirect environmental investments 2 903.0 1 912.0 990.9 Funding for the environment from the ESI Funds has been also supplemented by other EU funding programmes available to all Member States, such as, the LIFE programme or the Horizon 2020 and relevant EIB loans, that add up to an estimated total of EUR 5.4 billion of EU environmental financing for Germany in 2014-2020. The LIFE programme is entirely dedicated to environmental and climate objectives. It finances demonstration and best practice actions for green solutions to be deployed. In the 2014-2020 period, Germany has received EU support for 37 LIFE projects (for nature and environment) with EUR 124.3 million from the LIFE programme (out of 1 028 EU27 LIFE projects with the total EU contribution of EUR 1.74 billion) . In 2014-2020, Horizon 2020 allocated about EUR 271.6 million for Germany for the environment, in particular, for circular economy, climate action and natural resources and ecosystems), accounting for 2.7 % of Germany’s total allocation . From the European Fund for Strategic Investments (EFSI), Germany received EUR 60.0 million for direct environmental investments out of its total allocation (EUR 5.4 billion) . Germany received EUR 2.1 billion for direct environmental investments (specifically, for water and sewerage) out of the total EIB loans for Germany (EUR 44.7 billion) . The country ranks number 4 in size in total EIB lending. In 2020, the EIB provided EUR 24.2 billion to fight climate change, 37 % of its total financing and EUR 1.8 billion (3 % of its financing) for the environment . EU environmental funding 2021-2027 The 2020 European Green Deal investment plan calls for EUR 1 trillion in green investments (public and private) to be made across the EU by 2030. The 2021-2027 MFF and the NextGenerationEU spending programme will mobilise EUR 2.018 trillion (in current prices) to support the recovery from COVID-19 and the EU’s long-term priorities, including environmental protection . Following the EU Green Deal’s pledge to ‘do-no-harm’ and the Interinstitutional Agreement on the 2021-2027 MFF , 30 % of the EU budget will support climate efforts and 7.5 % (as of 2024) and 10 % (as of 2026) biodiversity that requires increased programming of financial resources for biodiversity, specifically under the 2021-2027 Cohesion policy and the 2023-2027 CAP to reach those targets. Sustainable finance significantly increases transparency on environmental sustainability (a goal promoted by the EU taxonomy) , strengthens non-financial reporting requirements, facilitates green bond issuance (by the EU green bond standard ). Reinforced by the renewed sustainable finance strategy (2020) it will increase investment flows to climate and environment. In support of financing climate adaptation, the new strategy on adaptation to climate change can facilitate to close the insurance protection gap from non-insured climate-related events . The EIB will align 50 % of its lending with climate and environment by 2025 with an EUR 250 billion contribution to the Green Deal Investment Plan by 2027. The table below gives an overview of the EU funds earmarked specifically to Germany for the 2021-2027 period. These funds are also supplemented by other EU funding programmes available to all Member States. Table 3: Key EU funds allocated to Germany (current prices), 2021-2027 Instrument Country funding allocation (million EUR) Cohesion policy ERDF ESF+ ETC (ERDF) Total: 18 457.5 1 0912.6 6 527.1 1 017.8 Just Transition Fund 2 477.6 EAFRD/rural development under CAP Strategic Plans 2023-2027 5 461.8 European Maritime, Fisheries and Aquaculture Fund (EMFAF) 211.8 Recovery and Resilience Facility (RRF) 2021 – 2026 25 613.5 (grants) In Germany, the programming for the majority of EU funds (ERDF, EAFRD and EMFAF) is well under way. As regards the ERDF the main priorities under the ‘green objective’ are energy efficiency, climate adaptation including using ecosystem-based approaches, followed by biodiversity and Green Infrastructure, circular economy and urban mobility. The negotiations have been concluded under the RRF. As part of the EU’s Recovery Package, Germany requested EUR 25.6 billion of grants through the Recovery and Resilience Fund, of which 42.5 % will support climate objectives. This is above the 37 % climate expenditure target, the minimum level required under the RRF Regulation. Green investments will go to: ·making the transport sector greener by supporting electric cars, the renewal of the local public transport fleet and rail; ·decarbonising industry with a focus on renewable hydrogen; ·increasing the energy efficiency of residential buildings through renovation. Overall, the plan ensures that direct actions can be taken at local levels for the green transition, while protecting or restoring the environment, and in compliance with the do-no-significant-harm principle.

Figure 41: Climate expenditure in RRPs, 2021-2026 Under NextGenerationEU, the Commission will issue up to EUR 250 billion of EU green bonds (one third of the NGEU total) until 2026 that will comply with the general spirit of the DNSH principle, but will not be subject to the currently developed Delegated Acts related to the EU Taxonomy and will not fully align with the proposed EU green bond standard. In December 2020, the EIB Group adopted the Climate Bank Roadmap outlining the role of the institution in climate action and environmental sustainability for the next decade also setting to align 50 % of its lending activity with that by 2025. The EIB's contribution to the European Green Deal Investment Plan is expected to amount to around to EUR 250 billion throughout to 2027 in terms of investments in EU mandates (i.e. under EU instruments and through the EU budget). National environmental protection expenditure Total national environmental protection expenditure (including all relevant current and capital expenditure ) in the EU-27 was EUR 272.6 billion in 2020, representing 2 % of the common GDP being quite stable over time. While absolute expenditure is concentrated in a few countries, as a share of GDP, most countries spend between 1-2 %, with Germany being slightly above that (2.2 %). Of the above total, the EU-27's capital expenditure (Capex) on environmental protection (i.e. investment) amounted to EUR 56.3 billion in 2018, lowering to EUR 54.5 billion in 2020, representing around 0.4 % of GDP. Most Member States invested 0.2-0.5 % of their GDP in environmental protection, including Germany (0.4 %). During 2014-2020, this totalled to around EUR 376 billion of environmental investment in the EU27, and to EUR 84.3 billion for Germany. Figure 42: Direct and indirect environmental protection investments in the EU-27 (EUR million and % of GDP), 2018

By institutional sector, around 23 % of Germany’s environmental protection investments (capital expenditure) came from the general government, over a half (56 %) from specialist producers (of environmental protection services, e.g. waste and water companies) and 21 % from industry (business) that normally pursues environmental activities as ancillary to their main activities. At EU level, 37 % comes from governments, 33 % from specialist producers and 30 % from industry (business). Figure 43: EU-27 Member States' environmental protection investments (Capex) by institutional sectors (Total economy = 100%), 2018

Breakdown of investment by environmental topic is partially available, at the level of institutional sectors only (rather than at economy level), due to different reporting patterns. At Germany’s general government level, 40 % of environmental protection investments went to the protection of air, 36 % to wastewater and 13 % to environmental research and development. The country’s specialist producers (of environmental protection services) mostly focused on wastewater (72 %), waste management received 27 % of respective investments. The industrial and business sector focused on several areas: wastewater (37 %), air protection (33 %), waste management (14 %) and water and soil protection (11 %) to name the most significant and clearly classified areas. The total annual European green bond issuance in 2020 was USD 156 billion (EUR 137 billion ), growing from USD 117 billion (EUR 105 billion) in 2019, also including some non-EU European countries. By EU-27 Member States only, the 2020 annual green bond issuance was EUR 124 billion. 83 % of the green bonds issued by European countries served energy, buildings or mobility objectives between 2014-2020, 8 % supported water and waste, with further 6 % supporting land use – with links to ecosystem conservation & restoration, based on the Climate Bonds Taxonomy being broadly similar to the EU Taxonomy . In 2020, EU green bond issuance by Germany amounted to EUR 36 644 million. Figure 44: Annual EU green bond issuance in 2020 (EUR billion) Green budget tools Green taxation and tax reform

Germany’s revenue from environmentally-related taxes are among the lowest (rank 24) in the EU compared to GDP, with 1.71 % in 2020 (EU-average: 2.24%). 83 % of the total constituted energy tax, and transport taxes 17%. Taxes on pollution and resources are very low (0.01% of the total). Germany applies economic instruments to encourage recycling, like ’pay-as-you-throw’ schemes. Figure 45: Environmental taxes in the EU-27, 2020 The European Green Deal underlines that well-designed tax reforms can boost economic growth and resilience, foster a fairer society and a just transition by sending the right price signals and incentives to economic actors. The European Green Deal creates the context for broad-based tax reforms, fossil fuel subsidies removal, shifting the tax burden from labour to pollution, also accounting for social considerations . The application of the ‘polluter pays principle’ (PPP) stipulating that polluters should bear the cost of measures to prevent, control and remedy pollution; is facilitated by the EU Commission’s TSI flagship on greening taxes. Environmentally-harmful subsidies Addressing and removing environmentally-harmful subsidies (EHS) is a further step towards wider fiscal reforms . Fossil fuel subsidies are costly for public budgets and adversely impact the achievement of the European Green Deal objectives (climate neutrality, air quality, zero pollution and lowering health impacts). In many cases they also go against incentives for i