Analysis-Germany's climate activists on edge as parties shape coalition agenda

By Riham Alkousaa

BERLIN (Reuters) - Climate activists fear the worst when Germany's conservatives and Social Democrats begin to thrash out a joint climate policy for their future coalition government. 

A country once seen as a beacon of progressive climate policy is poised for a significant reset, with the conservatives - having in part blamed Germany's ambitious green goals for chronic economic weakness - keen to roll back targets and policies amid rising voter apathy on climate.

As Europe's largest emitter of CO2 but also Europe's biggest generator of renewable energy, Germany's future stance on climate issues will be even more critical after the United States' withdrawal from the Paris Agreement and with the European Union under pressure from some members to ease regulations and goals.

"If there was ever a time to panic about climate and politics, now would be it," Luisa Neubauer, a prominent German climate activist with Fridays for Future, told Reuters.

Since winning February's election, the CDU has affirmed its commitment to Germany's overarching 2045 target of being climate neutral but emphasizes a "pragmatic approach that supports the economy, industry, and public acceptance", according to Andreas Jung, the conservatives' climate policy spokesperson.

The party wants to abolish a future ban on the sale of new petrol and diesel cars, end restrictions on the use of cars, reverse a law phasing out fossil fuel heating, and reintroduce diesel subsidies in agriculture. 

How strongly the SPD will defend its green election pledges - to stick to national and EU targets, invest in green infrastructure and renewables, and focus on affordable climate protection - in coalition talks is key, climate activists say. 

Nina Scheer, an SPD climate spokeswoman, told Reuters it would be important to develop a common understanding with the conservatives on an accelerated and systematic transition to renewable energies. But that could be tricky. 

The SPD has been significantly weakened and came in third place in the election, with just 16.4% of the vote, its worst ever result.

"The SPD is not a traditional climate policy party like the Greens, so we shouldn’t expect them to push this issue as strongly," said Stefan Marschall, political scientist at the University of Duesseldorf.

Greenhouse gas emissions in Germany fell by 12.5% under the three-party "traffic light" coalition of the SPD, Greens, and Free Democrats, thanks to a renewable energy push and a drop in industrial production.

But emissions cuts in sectors such as transport and building - 38% of Germany's 2024 total emissions- have stalled.

Expanding net-zero policies to these sectors has faced growing resistance in Germany and Europe, amid a cost-of-living crisis that has shifted climate protection lower on German voters' priorities in the February election.

Only 12.8% of Germans saw climate protection as the most important issue in this election, down from 24.4% in 2021, a study by IW Koeln economic institute showed.

Environmental and expert groups say Germany is not expected to meet the 2045 target as things stand. 

The Green Party, heading for opposition, still wields some influence, after threatening to tie its support for a new conservative-SPD financial package to the inclusion of some climate investment commitments within that plan.    

EU CONSTRAINTS 

Germany cannot unilaterally reverse EU laws, but its influence is strong. The center-right European People's Party (EPP), the largest group at the European parliament and which includes Germany's conservatives, launched a campaign in December to weaken the bloc's climate rules.

At a recent EPP retreat in Berlin, conservative leader and Germany's likely next chancellor Friedrich Merz signed a declaration calling on the EU to abandon its renewable energy goals, a step backed by industry.

"If Germany is not standing by the Green Deal, the Green Deal is gone," said German Green MEP Michael Bloss, referring to the EU's target. 

The conservatives' climate policy relies heavily on CO2 pricing as a mechanism to cut emissions and fund investment.

"We are focusing on three pillars: gradual CO2 pricing with social compensation, reliable subsidies, and a strategy of enabling rather than excessive regulation," CDU's Jung said. 

The European emissions trading system (ETS), extending to the transport and buildings sectors from 2027, is expected to increase prices and make heating or powering vehicles with fossil fuels less appealing. But if prices rise too much that creates a crisis of affordability.

Germany must annually invest about 3% of its GDP in climate protection measures like power grid upgrades, industry electrification and public transport expansion, to meet its 2045 climate neutrality goal, says Berlin-based think tank Agora.

The conservatives and SPD this week agreed to create a 500 billion euro infrastructure fund and overhaul borrowing rules but dedicated climate investments are not included in the fund. The conservatives have also promised sweeping tax cuts that would deprive state coffers of almost 100 billion euros of annual revenue, according to the Ifo economic institute. 

"The biggest gap in the conservatives’ current program is the lack of a clear strategy to make climate transition fair or affordable for the poorer half of the population," said Christoph Bals, political director at research group Germanwatch.

The chance of sluggish climate action under a future conservative-led government is likely to spark more legal battles and direct action activism, which surged in Germany, despite the greener SPD-led government.

Roadblocks, airport protests, and demonstrations at oil installations captured national attention and triggered a government crackdown and there are already three climate-related constitutional complaints pending before Germany's top court.

"It's our job to keep this issue alive. The next few years will be challenging, not just for us but also for the CDU (conservatives)," Lena Donat, Greenpeace mobility expert, said. 

(Reporting by Riham Alkousaa; Editing by Alexandra Hudson)