Germany has continued to improve its environmental performance over the past decade. It has ambitious climate targets with the aim to reach climate neutrality by 2045 and achieve negative emissions after 2050. Nevertheless, Germany will need to further accelerate climate action, particularly in the buildings and transport sectors, and address the triple crisis of energy, climate and biodiversity in an integrated and holistic manner. As part of its energy crisis response, Germany has taken a series of measures, which are historic in size and scope. They are set to massively accelerate its green energy transition in the coming years. It is also scaling up its engagement on climate change adaptation across all government levels and has initiated an ambitious programme to foster investments in nature-based solutions. This is the fourth OECD Environmental Performance Review of Germany. It provides 28 recommendations to help Germany further improve its environmental performance.

1. GERMANY’S CLIMATE ACTION
By Jo Tyndall, OECD Environment Director, Berlin, 8 May 2023
Connecting the dots between climate mitigation,
adaptation and nature-based solutions

2. 2
Two OECD climate-focused reports
oe.cd/3LD oe.cd/epr-germany
Special chapter:
“Reaching net
zero while
safeguarding
competitiveness
and social
cohesion”
In-depth chapter:
“Climate change
adaptation and
nature-based
solutions”

3. 3
Germany has strongly reduced emissions since 1990
GHG emissions
1990 = 100
Source: Our World in Data based on the Global Carbon Project; OECD (2022), Green Growth Indicators, OECD Environment Statistics (database).

4. 4
But Germany is still a large emitter of greenhouse gases
CO2 emissions intensity
CO2 fuel combustion emissions (tCO2eq) per capita, 2021
Source: IEA Greenhouse gas emissions from energy database.

5. Germany has set ambitious emission reduction targets
5
Source: OECD calculations based on OECD Environment Statistics and Umweltbundesamt.
Greenhouse gas emissions
(excluding land use, land use change and forestry), tonnes of CO2 equivalent, in million
0
200
400
600
800
1000
1200
1400
0
200
400
600
800
1000
1200
1400
1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040 2045
2045 target: Net
zero
Low emissions due to
the pandemic
Extrapolation based on the speed
of the reduction since 1990
2030 target

6. 6
High fossil fuel subsidies and tax expenditures
jeopardise climate goals
0
1
2
3
4
5
6
7
8
9
Tax exemption for kerosene
fuel in the aviation industry
Concession for diesel fuel Commuter allowance Lower electricity and gas
charges for public spaces
Favourable tax treatment for
privately used company
cars
Source: German Environment Agency.
Main environmental harmful subsidies and tax exemptions
Estimated annual cost, 2018, EUR billion

7. Environmentally related tax revenue has been shrinking
Note: Data on Germany’s pollution revenues not available after 2010.
Source: OECD (2022), Environmental policy instruments, OECD Environment Statistics (database

8. Adjustment costs for displaced workers can be high
8
Source: Barreto, Grundke and Krill (forthcoming).
Earnings relative to pre-displacement average

9. 9
Improving training and adult education is key
Public expenditure on training policies, 2019
(% of GDP)
Note: OECD average is a simple average of available OECD member countries.
Source: OECD Labour Force Statistics.

10. 10
Recycling carbon pricing receipts back to households would
particularly support poorer households
Real household income changes by expenditure decile,
compared to the benchmark scenario (in %)
Note: The results are based on simulations using a computable general equilibrium model. Carbon price-related
revenues are recycled, transferring the same amount to each household.
Source: (Bickmann et al., forthcoming[1]).

11. 11
Strengthening carbon pricing and policy coherence
• Accelerate the shift to a cap-and-trade system for non-ETS sectors and
align its cap with a unified emission reduction target for all sectors
regulated under the system
• Gradually phase out fossil fuel subsidies and tax expenditures, replacing
them with abatement subsidies or direct transfers to those households that
may need them
• Introduce indexation to annually adjust environmentally related tax revenue
• Better align taxes with the Polluter Pays Principle and internalise costs
related to pollution, overuse of natural resources and biodiversity loss
Key recommendations

12. ENERGIEWENDE
GREEN ENERGY TRANSITION

13. Germany’s energy transition is underway,
but needs to be accelerated

14. Total energy supply remains carbon intensive
despite increases in renewables
19%
32%
27%
6%
0.6%
5%
11%
0.1%
Germany
287.9 Mtoe
Fossil fuels:
77%
14%
35%
30%
10%
2%
3%
6% 0.8%
OECD
5 227.7 Mtoe
Fossil fuels:
78%
Coal Oil Natural gas Nuclear Hydro Solar/wind/other Biofuels/waste Geothermal
Note: Data refer to 2021. The breakdown of energy supply excludes heat and electricity trade, but percentages shown
reflect ratios calculated on total energy supply. Biofuel and waste include negligible quantities of non-renewable waste.
Source: IEA (2022), IEA World Energy Statistics and Balances (database).

15. Energy policy reforms are expected to boost renewables
0%
10%
20%
30%
40%
50%
60%
70%
80%
2005 2010 2015 2020 2025 2030
Share of renewables and targets, 2005-30
Gross final consumption Electricity
Heating Transport
National targets
Note: Data refer to 2021. The breakdown of energy supply excludes heat and electricity trade, but percentages shown
reflect ratios calculated on total energy supply. Biofuel and waste include negligible quantities of non-renewable waste.
Source: IEA (2022), IEA World Energy Statistics and Balances (database).

16. There is scope to increase public spending on energy R&D
16
Public energy research, development, and demonstration (RD&D) budgets
Per thousand unit of GDP, 2021
Source: IEA, Energy RD&D Budget/Expenditure Statistics.

17. 17
Accelerating the green energy transition
Recommendations
• Gradually replace renewable energy subsidies with more targeted subsidies for green
R&D and the deployment of near-zero emission industrial technologies
• Introduce time-variable grid charges and accelerate the deployment of smart meters,
while strengthening data protection and cyber security
• Streamline the permitting process by setting a single contact point for procedures,
applying silence-is-consent rules where appropriate, improving capacity of
administrative and court staff
• Engage in early public consultations and promote citizen-driven energy action
• Monitor the environmental impact of a fast-tracked permitting process
for the expansion of renewable energy sources

18. VERKEHRSWENDE
TOWARDS
SUSTAINABLE
MOBILITY

19. Germany still has a way to go to reach its goal of 15 million EVs
Source: Statista (2022), (database). https://www.statista.com; Destatis (2023), Statistics of motor vehicles and trailers

20. 20
The deployment of charging points for electric vehicles
needs to accelerate
Number of charging points
Per thousand cars, 2021
Source: German Association of the Automotive Industry.

21. Car dependency is a key challenge
Source: Destatis (2023), Statistics of motor vehicles and trailers. German Federal Statistical Office.

22. 22
Investment in rail infrastructure needs to increase
Investment in rail infrastructure
Source: The International Transport Forum (ITF) database.

23. 23
Promoting sustainable mobility
Key recommendations
• Develop an integrated national mobility strategy, including intermediary targets
at subnational levels (e.g. annual progress report)
• Shift focus from subsidising electric cars towards expanding the number of charging points
and public transport; provide targeted public support for low-density areas
• Revise the road traffic regulations with a view to removing obstacles to sustainable mobility;
empower local authorities to play a leading role in promoting sustainable mobility
• Shift public investment priorities towards sustainable transport modes (e.g. ensure
adequate financing and accelerate implementation of the National Cycling Plan 3.0)
• Consider a vertical separation between Deutsche Bahn’s infrastructure management
and operations

24. KLIMAFREUNDLICHES
WOHNEN
CLIMATE-FRIENDLY
BUILDINGS

25. 25
The housing stock is relatively old
Share of residential building by construction year, %
Source: European Commission, EU Building Stock Observatory database.

26. 26
Decarbonising the building sector
Key recommendations
• Increase minimum efficiency standards and apply energy performance
certification to all existing buildings
• Phase out non-targeted building subsidies and replace them by
subsidies targeting vulnerable and credit constrained households
• Monitor the impacts of the 2022 CO2 Cost Sharing Act

27. NACHHALTIGE
LANDWIRTSCHAFT
SUSTAINABLE FARMING

28. 28
Nitrogen surpluses remain a major problem in some areas
-10
0
10
20
30
40
50
60
70
0
50
100
150
200
250
Nutrient balances
Nitrogen Phosphorus (right axis)
kg/hectare
Note: The gross nutrient balances (N and P) are calculated as the difference between the total quantity of nutrient inputs entering an
agricultural system (mainly fertilisers, livestock manure), and the quantity of nutrient outputs leaving the system (uptake of nutrients by
crops and grassland); the dashed line represents the zero value of the right axis (phosphorous).
Source: OECD (2023), Agri-Environmental indicators: Nutrients, Environment Statistics (database).

29. 29
Germany’s share of organic farming is increasing
but needs to triple to reach the 2030 target
0%
5%
10%
15%
20%
25%
30%
35%
Austria
Estonia
Sweden
Portugal
Finland
Italy
Czech
Republic
Latvia
Switzerland
Slovak
Republic
Spain
Denmark
Slovenia
Greece
Germany
Australia
Lithuania
France
Belgium
Hungary
Luxembourg
Norway
Netherlands
Poland
Canada
United
Kingdom
Korea
Ireland
Israel
Chile
Türkiye
New
Zealand
Costa
Rica
United
States
Japan
Mexico
Colombia
Iceland
Organic crop area, % of total agricultural land area, 2020 or latest available year
2030 national target
Source: OECD (2023), Agri-Environmental indicators (database).

30. 30
Promoting sustainable farming
Key recommendations
• Monitor the impact of fertiliser legislation and take further measures to
reduce nitrogen surpluses and ammonia
• Provide positive incentives to accelerate organic farming
• Pursue efforts to improve measuring of farm-level emissions and consider
exploring the introduction of an agricultural emissions pricing mechanism

31. KLIMAANPASSUNG &
NATÜRLICHER KLIMASCHUTZ
CLIMATE ADAPTATION AND
NATURE-BASED SOLUTIONS

32. Threatened species as percentage of known species, 2015 or latest available data
0%
10%
20%
30%
40%
50%
60%
Mammal Bird Plant
Germany has a high share of threatened species
Note: The threatened category refers to critically endangered, endangered and vulnerable species, that is those plants and animals that are in
danger of extinction or likely soon to be (for further information, see the IUCN Red List Categories and Criteria: Version 3.1, Second edition).
Iceland, Luxembourg and Portugal: partial data; Norway: 2021 data.
Source: OECD (2023), "Biodiversity: Threatened species", OECD Environmental Indicators (database).

33. LULUCF emissions, million tonnes CO2-eq and net carbon removal targets
-100
-80
-60
-40
-20
0
20
40
60
80
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
2020
2021
2023
2025
2027
2029
2031
2033
2035
2037
2039
2045
LULUCF. Historical data and WEM scenario
Forest land Cropland Grassland
Wetlands Settlements Harvested wood products
Other LULUCF Net targets Net LULUCF
projections
Million tonnes CO2 equivalent
The land use, land-use change and forestry sector
holds considerable untapped potential for carbon removal
Note: Projections are based on data submitted by Germany to the EEA and United Nations Framework Convention on Climate Change. Calculations are based on “with
existing measures”, which includes existing measures undertaken in the land use, land-use change and forestry sector.
Source: EEA (2022), National emissions reported to the UNFCCC and to the EU Greenhouse Gas Monitoring Mechanism (database), European Environment Agency.

34. 0%
5%
10%
15%
20%
25%
Total land area Cropland area Built-up area
Percentage of surface area in 2020 exposed to river flooding with a 100-year return period
Germany is significantly exposed to the impacts of climate change
Source: OECD (2023), "Air and climate: River flooding", OECD Environment Statistics (database)”

35. 0.00%
0.05%
0.10%
0.15%
0.20%
0.25%
0.30%
0.35%
Drought Extreme temperature Flood Storm Wildfire
Damages from climate-related hazards per unit of GDP in OECD countries, 2005-21
Extreme weather events cause significant loss and damage
Note: Ireland, Luxembourg, Norway and Slovakia did not record any or only minimally climate-related hazards. The 2015 constant USD GDP
has been converted to 2021 constant USD GDP using a cumulative price increase of 14.33% (average inflation rate of 2.26% per year). The
EM-DAT database does not consider indirect damages, which is why total recorded damages differ between sources.
Source: Centre for Research on the Epidemiology of Disasters, 2022.

36. Expected flooded area in case of 100-year return-period flood
The areas most vulnerable to climate risks need to be
identified to ensure that no one is left behind
Note: In an interactive online map, users can zoom in to view individual street names
Source: Klimaatlas, 2023.

37. Insurance covers less than half of economic loss related to extreme weather
and climate events in Germany (1980-2020)
500
1 000
1 500
2 000
2 500
EUR/capita, 1980-2020
Insured loss Uninsured loss
Adaptation funding needs are set to grow substantially
Source: EEA (2022), Economic losses and fatalities from weather- and climate-related events in Europe.

38. Germany has made strong international commitments
for climate action
0
0.5
1
1.5
2
2.5
Biodiversity, average 2017-21
Principal Significant
US Dollar, Billion, 2020 prices
0
2
4
6
8
Environment, average 2017-21
Principal Significant
US Dollar, Billion, 2020 prices
Top ten providers of ODA on environment and biodiversity, in USD, in 2020
Note: Top 10 donors by Rio Marker. Bilateral allocable Overseas Development Aid (ODA), to developing countries, all sectors. In their reporting, donors are requested to
indicate for each activity whether or not it targets environment and the Rio Conventions (biodiversity, climate change mitigation, climate change adaptation and
desertification). A scoring system of three values is used, in which aid activities are "marked" as targeting environment as the "principal objective" or a "significant
objective", or as not targeting the objective.
Source: OECD (2023), "Creditor Reporting System: Aid activities targeting Global Environmental Objectives", OECD International Development Statistics (database).

39. 39
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