Agora Calculation: Traffic Still Misses Climate Targets - Solar Boom Drives Energy Transition

In 2023, according to preliminary calculations by the Berlin think tank Agora Energiewende on the energy year's balance sheet for 2023, Germany's greenhouse gas emissions amounted to 673 million tons of CO₂. This represents a 46 percent reduction compared to the baseline year 1990, falling to the lowest level since the 1950s. Additionally, CO₂ emissions were approximately 49 million tons below the annual target derived from the Climate Protection Act, which set the goal at 722 million tons of CO₂. Two key developments were primarily responsible for the 73 million-ton reduction in CO₂ compared to 2022: First, coal-fired electricity generation dropped to its lowest level since the 1960s, saving 44 million tons of CO₂ on its own. Reasons for this decrease included a significant drop in electricity demand, increased electricity imports from neighboring countries (with around half sourced from renewable energies), a corresponding decrease in electricity exports, and a slight increase in renewable electricity production. Second, emissions from industry significantly declined.

Crisis and Economic Downturn-Related Declines

The primary reason for this was the crisis and economic downturn-related reduction in production among energy-intensive companies. While the overall economic performance shrank by 0.3 percent according to preliminary figures, energy-intensive production fell by 11 percent in 2023. According to Agora's calculations, only about 15 percent of the CO₂ reduction represents long-term savings, primarily resulting from the expansion of renewable energies, efficiency improvements, and the switch to lower-CO₂ or climate-friendly fuels and alternatives. About half of the emissions reductions are attributed to short-term effects, such as crisis-related production declines and lower electricity consumption. The think tank thus points out that the majority of emissions savings in 2023 are neither industrially nor climate-politically sustainable – emissions could increase again due to economic conditions or parts of industrial production might relocate abroad in the long term.

Target Misses in Transportation and Buildings

The CO₂ emissions from buildings and transportation remained virtually unchanged in 2023 – causing these sectors to miss their climate goals for the fourth and third consecutive years, respectively. With the lack of emissions reductions in these two areas, Germany is likely to miss its European-agreed climate targets from the so-called Effort Sharing Regulation as early as 2024. The federal government must compensate for such a target miss by purchasing emissions allowances from other EU member states – otherwise, fines loom, warns the think tank.

"2023 was a year of two speeds in climate protection in Germany: The energy sector recorded a climate policy success with the historic high in renewable energies, bringing us closer to the 2030 target," says Simon Müller, Director of Agora Energiewende Germany. "In contrast, we do not see sustainable development in industrial emissions reduction. The crisis-induced production slump weakens Germany's industrial base. If emissions are merely shifted abroad as a result, nothing is gained for the climate. The buildings and transportation sectors are also lagging in structural climate protection."

To permanently replace CO₂-intensive electricity generation in the energy mix, the positive momentum in the expansion of renewables must be further strengthened in the coming year. The industry needs adequate framework conditions to invest in Germany – such as in climate-neutral steel production and the transition from gas to electricity for process heat. In the buildings sector, the implementation of the adopted measures must be consistently advanced in 2024. And in transportation, fundamental political decisions are needed for the breakthrough of climate-friendly mobility.