A deep split within Germany’s conservative CDU/CSU over the nation’s 2045 net‑zero law is sending tremors through Europe’s climate policy landscape. As party leaders debate whether to uphold or delay Germany’s ambitious target, the outcome could reshape the EU’s Fit for 55 goals and disrupt corporate planning across the continent.
Internal Union split
The CDU/CSU is sharply divided over the 2045 target, with key actors voicing distinct positions. Party leader Friedrich Merz has argued that “Germany is only 2% of global CO2,” a stance critics counter by highlighting the country’s high per-capita emissions and international responsibility. CSU heavyweight Manfred Weber frames his opposition to the EU combustion engine phase-out as “pragmatism,” advocating for a slower transition. Meanwhile, Martin Huber of the CSU warns that strict targets risk “green economic ruin,” casting climate policy as a threat to Germany’s industrial base and competitiveness.
Pro‑target voices
Despite internal dissent, several conservatives defend the 2045 goal as essential for economic stability and investment confidence. Andreas Jung (CDU) supports the target, emphasizing the need for planning certainty to secure long-term capital expenditure decisions by businesses. The Klimaunion, a climate-focused group within CDU/CSU, pushes for a Paris-aligned 1.5°C pathway, opposes new gas plants, and promotes CO2-neutral options like pumped storage and biomass. Katherina Reiche, another influential figure, warns that the energy transition is “at a crossroads,” urging policymakers to prioritize delivery over dilution of targets.
Delivery bottlenecks
Structural challenges are undermining Germany’s climate delivery, leading to growing transition fatigue. Slow approval processes for wind projects, insufficient grid expansion, and stalled transport sector reforms are frequently cited as self-inflicted setbacks. The EU’s RED III directive and TEN-E grid priorities demand accelerated permitting and infrastructure build-out, putting pressure on German administrations to act faster. As a result, the policy debate is shifting from target-setting to execution, with calls for permitting reform, new grid investment frameworks, and robust compliance strategies for the transport sector.
Market implications
Policy volatility in Germany carries significant consequences for companies, investors, and supply chains. Regulatory uncertainty—especially around renewables, storage, and EV supply chains—creates “regulatory whiplash,” with capital expenditures highly sensitive to shifts in car CO2 rules and power market design. Planning certainty, such as a firm 2045 target, helps lower the weighted average cost of capital (WACC), anchoring investment pipelines and long-term power purchase agreements (PPAs). Key industries, including steel and chemicals under the ETS and automakers facing the 2035 car standards, are exposed to changing carbon and compliance costs if targets are delayed.
Case examples
Conservative-aligned initiatives are reframing climate action around values, jobs, and security. Klimaunion’s stance against new gas plants and support for storage and biomass illustrates a focus on firm, CO2-neutral capacity within a conservative framework. The citizen group “heimatwurzeln” champions “bourgeois climate protection,” aiming to engage conservative communities with climate action. Experts advise communicating climate policy through the lens of job creation, technological leadership, and energy security rather than abstract change, broadening the appeal and support base.
Trends and politics
Broader political trends are shaping the internal debate and Germany’s alignment with the EU. Some CDU/CSU leaders, such as Saxony’s Michael Kretschmer, have floated postponing the neutrality target to 2050, reflecting ongoing tensions. Unlike in the U.S., Germany’s conservatives are not disputing the need for climate action; the discussion centers on the pace, cost, and instruments. The outcome of this debate will send important signals to EU partners about Germany’s reliability in delivering Fit for 55 and participating in cross-border energy planning.
Conclusion
As Germany’s conservatives debate the pace of climate action, the focus is shifting from whether to act to how quickly reforms can be delivered. Maintaining the 2045 target alongside robust delivery reforms can provide stability for corporate planning, while reframing climate policy around jobs and security offers a pragmatic, values-driven path. Watch for CDU/CSU platform language and progress on permitting and grid reforms as key signals for future alignment.
EU policy context
Germany’s 2045 climate neutrality target sits within the broader framework of the European Climate Law (Regulation (EU) 2021/1119), which commits the EU as a whole to climate neutrality by 2050. By aiming for 2045, Germany positions itself ahead of the EU minimum, setting an example for member states and raising the bar for ambition. The EU’s Fit for 55 package underpins delivery, including the Emissions Trading System (ETS and its extension ETS2), the Effort Sharing Regulation (ESR), the Renewable Energy Directive (RED III), and sector-specific CO2 standards—such as the 2035 zero-emission requirement for new cars and vans. Notably, CSU leaders have challenged the car rule, signalling internal resistance that may reverberate at the EU level. If Germany delays its timeline, this could complicate ESR target-sharing negotiations, disrupt cross-border power planning, and unsettle decarbonisation pathways for industries tied to the ETS and the Carbon Border Adjustment Mechanism (CBAM).