Negotiations on the shape Germany’s next government will take are underway in Berlin, where the working groups from the CDU/CSU and SPD met for the first time on the evening of 24 March 2025 to start compiling their coalition agreement. Notably, the results of Working Group 4 (Transport and Infrastructure, Construction and Housing) and Working Group 15 (Climate and Energy) reveal several clues about the future government’s policy – alongside one or two points of contention.
A. Transport and infrastructure
- Accelerated planning and approvals: The parties propose fundamental changes to planning, construction, environmental, procurement and (administrative) procedural law. Formalised procedures are to be made more flexible, the number of stages involved reduced, and assessments currently conducted in duplicate removed. Restrictions are to be imposed on representative actions, and public consultations in planning procedures limited to a single opportunity. The parties plan to remove the requirement to perform costly Planfeststellungsverfahren planning approval procedures for some projects – particularly the construction of replacement infrastructure – and instead rely on the Plangenehmigungsverfahren procedure with its significantly simpler requirements as the standard procedure. Uniform procedural law is to apply to all infrastructure projects. Further, the paper announces a Nature Area Requirements Act (Naturflächenbedarfsgesetz) that will facilitate the designation of compensatory measures and provide for biotope connectivity between them.
- Public transport: The parties want affordable, available and environmentally friendly mobility in urban and rural areas alike. Transport infrastructure is to be transitioned to a ring-fenced financing model that draws on funds from the general budget, user fees and private capital. Measures are to be taken to promote walking and cycling. To strengthen public transport, the parties plan to establish a new legal framework for its financing and initiate a modernisation plan with regionalisation funds to be primarily used to order local and regional passenger rail services. The Deutschlandticket is to be continued beyond 2025, with user fees to see incremental, socially equitable increases from 2027. And the public bus fleet is be retrofitted to run climate neutrally.
- Road transport: The parties intend to allocate financial resources from the special fund to tackle the backlog of road infrastructure repairs, focussing in particular on bridges and tunnels. Driver training is to be reformed to make driving licences more affordable, while maintaining current standards. To address the shortage of drivers, the parties also plan to update professional driver qualifications and improve infrastructure conditions. The licensing process for heavy haulage and abnormal loads is to be accelerated. Efforts to expand nationwide charging infrastructure are to be intensified, and Germany is to become the leading market for autonomous driving, developing and co-financing model regions with the federal states. The introduction of a speed limit of 130 km/h on German motorways is still being debated.
- Rail transport: Investment in the German rail network is to be significantly increased and freight transport increasingly shifted from road to rail – an endeavour for which an “infraplan” is to be developed as a statutory control element and funded through a “rail infrastructure fund”. The focus here will be on the digitalisation and electrification of the railway infrastructure. Deutschlandtakt – Germany’s integrated rail timetable – is to be gradually expanded through improvement of railway infrastructure. In the medium term, the parties plan to enhance rail transport quality through comprehensive rail reform, which will include the further separation of DB InfraGO from the DB Group through legal, personnel, and organisational measures.
- Waterway and air transport: Waterways, locks and sea and inland ports are to be modernised and expanded. The parties also plan to reverse the 2024 increase in air traffic tax, reducing aviation-specific taxes, fees and charges. European airlines are not to face greater disadvantages from the Sustainable Aviation Fuel (SAF) quota than non-European carriers. Additionally, half of the revenue from the ETS 1 for aviation will be allocated to promote SAF market adoption.
B. Climate and energy
- Climate protection: The parties stress their commitment to the goal of climate neutrality in Germany by 2045 and to the Paris Agreement on climate change. The plan is to bring together climate protection, economic competitiveness and social equity and to focus on innovation. Germany is to remain an industrialised country. There is still disagreement as to whether carbon reductions in partner countries can count towards the achievement of these goals.
- Emissions trading: The European Green Deal and the Clean Industrial Act must be further developed, the working group says. Emissions trading will continue to be promoted as a key component and efforts will be made to persuade more countries to support carbon pricing, with an emphasis to be placed on competitiveness and social acceptance. The CDU/CSU wants negative emissions and Article 6 credits within the meaning of the Paris Agreement on climate change to be taken into account in the ETS 1. The paper also supports introducing the ETS 2, whereby assistance will be provided for households and economic sectors under particular strain.
- Energy transition: Solar energy, wind energy, bioenergy, geothermal energy and hydropower, among others, will be relied on to ensure the success of the energy transition. The parties would also like to strengthen technologies such as heat recovery and airborne wind energy. By the summer recess of 2025, a monitoring system will show electricity demand as well as the current status of renewable energy expansion and related aspects and will serve as a basis for further action.
- Energy prices: The parties want to lower electricity tax to the minimum rate required by European law and reduce both surcharges and grid fees. Electricity price compensation will be extended permanently and expanded to other sectors. The working group paper also provides for special relief for energy-intensive companies (industrial electricity price). The gas storage surcharge is to be abolished altogether. Particularly with regard to reducing energy costs for energy-intensive companies, these measures tie in with the European initiatives providing for measures such as increasing the efficiency of grid fees, reducing energy levies and taxes, and facilitating power purchase agreements via the European Steel and Metals Action Plan and the European Action Plan for Affordable Energy.
- Accelerated planning and approvals: Renewable energy expansion is to be accelerated by simplifying planning procedures. The CDU/CSU wants to waive nature conservation compensation in the case of energy transition projects and reduce representative action rights or abolish them at European level.
- Grids: The working group paper stipulates that critical energy infrastructure should be robust and safeguarded as effectively as possible, and makes reference to the implementation of the NIS 2 Directive in this connection. The parties still disagree on the expansion of HVDC transmission grids: The CDU/CSU prefers overhead lines, while the SPD prefers underground cables.
- Flexibilisation: The flexible use of renewable energies is to be improved. Among other things, the parties want to recognise energy storage systems as being in the overriding public interest and also give them the status of privileged renewable energy generation plants.
- Financing: The working group paper envisages an investment fund for energy infrastructure, with public guarantees and private capital playing a role.
- Wind energy: While the SPD wants to stick to the two percent land-use target, the CDU/CSU wants to be able to replace the land-use target for wind energy with a green electricity target.
- Geothermal energy: The parties intend to amend the Geothermal Energy Act (Geothermie-Gesetz) to address the issue of exploration risk mitigation.
- Power plant strategy: The parties want to incentivise the construction of up to 20 GW of gas-fired power generation capacity by 2030 in a technology-neutral manner.
- CCS/CCU: A legislative package is to allow both carbon capture and storage (CCS) and carbon capture and utilisation (CCU). In this context, the parties consider the ratification of the London Protocol and the creation of bilateral agreements with neighbouring countries to be a top priority.
- Hydrogen: The working group paper envisages a hydrogen core network that connects industrial centres across Germany. The plan will include hydrogen storage facilities.
- Fossil-fuel phaseout and structural change: The parties intend to stick with the plan to phase out coal power by 2038. The timetable for taking coal-fired power plants off the grid or into reserve will depend on how quickly it is possible to increase the number of dispatchable gas-fired power stations.
- Nuclear energy: The CDU/CSU maintains that nuclear power can play a significant role in achieving climate goals and ensuring energy security and emphasises research into next-generation nuclear energy, small modular reactors and fusion power plants in the European context. It proposes that a review be conducted to establish whether it is still technically and financially feasible to resume operations at the nuclear power plants most recently shut down and that the further decommissioning of those plants be stopped immediately. In contrast, nuclear power does not feature at all in the SPD’s paper.
- Combined heat and power: The parties plan to adapt the Combined Heat and Power Act (Kraft-Wärme-Kopplungsgesetz) in 2025 to meet the challenges of climate-neutral heat supply, harness flexibilities and introduce a capacity mechanism.
- Energy efficiency: Energy efficiency is to be improved using tax incentives and market signals. The parties plan to amend and simplify the Energy Efficiency Act (Energieeffizienzgesetz) and the Energy Services Act (Energiedienstleistungsgesetz), without hindering electricity price flexibility. While the CDU would like to trim both laws back to EU requirements, the SPD wants to retain the stricter German regulations. The CDU is also in favour of a relative energy-savings target, while the SPD would prefer an absolute target.
- Heating: There is currently significant disagreement on the topic of heating. The CDU plans to abolish the Buildings Energy Act (Gebäudeenergiegesetz, “GEG”) and seeks a paradigm shift from a short-term energy performance approach for individual buildings to a long-term focus on emissions efficiency, while maintaining subsidies for the installation of heating systems. The national buildings efficiency classes in the GEG are to be harmonised with those of neighbouring countries, and any room for manoeuvre in implementing the Energy Performance of Buildings Directive utilised. However, the specific areas of flexibility are not specified. The CDU also supports extending the implementation deadline. In contrast, the SPD would like to see the GEG amended to make the current regulations more technology-neutral, flexible and simpler while ensuring reliable, unbureaucratic, efficient and socially tiered subsidies. The SPD also wants carbon reduction as the key parameter with which to steer improvements in overall building performance through heating system, building envelope, and surrounding works. The SPD is also calling for the new rules to come into effect nationwide on 1 July 2026 in municipalities with over 100,000 inhabitants, and on 1 July 2028 in other municipalities.Despite these differences, both parties agree that the GEG and municipal heat planning must be more closely aligned and plan support for the construction of local and district heating networks – primarily through statutory federal funding for efficient heating networks (Bundesförderung für effiziente Wärmenetze, “BEW”), although exactly how to implement this remains a matter of debate. To create secure investment conditions, amendments to the Ordinance on the General Terms and Conditions for the Supply of District Heating (AVBFernwärme-Verordnung) and the Ordinance on Heat Supply (Wärmelieferverordnung) are in the works.
- State shareholdings: The parties plan to consider strategic investments in the energy sector.
C. Conclusion
The coming days and weeks of coalition negotiations promise to be exciting. It remains to be seen to what extent the disagreements can be resolved through further negotiations and what form compromises might take. It should not be forgotten that consensus already exists in many areas.
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