GERMANY: An Introduction to Public Law: Planning and Environment

The Challenges of Environmental Law in Germany 2024–25

Germany remains the industrial heartland of the EU, making environmental law a unique challenge for industry and the economy. It is shaped by international and, in particular, EU law, which regulates environmental law issues in detail. Environmental law is also strongly influenced by constitutional law, as it often concerns the exercise of fundamental rights by both affected citizens and the industry. A defining feature of environmental law is that it is not just “law in the books” but “law in action”, as – more than perhaps any other area of law – it is constantly evolving in response to political conditions and technological developments.

This already complex subject has been made even more challenging owing to concurrent developments of existential importance to society, economy, and the industry. The transformation to carbon neutrality and the associated environmental progress are a major challenge for all stakeholders. The fight against climate change and the need for decarbonisation affect almost all sectors of the economy, as well as individual citizens. At the EU level, the European Green Deal (with its investment plan) and the Fit-for-55 package (with numerous related legislative changes) are noteworthy, as is the German Climate Protection Act, which serves as a planning and framework act for various climate protection instruments and many ongoing legislative initiatives. A key component is the European Emissions Trading System, which will be expanded to include transport and buildings in the future.

In a landmark ruling of 24 March 2021, the German Federal Constitutional Court made a fundamental decision on the State’s obligation to protect the climate and instructed the legislature to provide further planning certainty for the necessary transition to climate neutrality. The German legislature responded immediately to the Climate Decision by revising the Climate Protection Act, thereby stepping up Germany’s climate protection efforts. According to this law, CO2 emissions are to be reduced by at least 65% (instead of 55%) by 2030 and by at least 88% by 2040, and net greenhouse gas neutrality is to be achieved by 2045 (instead of 2050). In addition, there is a mandate to achieve negative greenhouse gas emissions after 2050 and a ban on regression – ie, climate protection targets can only be increased. The impact of these climate targets on the permitting and planning of industrial and infrastructure projects is a key issue in environmental law. The global climate has now become part of the protected assets to be assessed for environmental compatibility. The permitting authorities therefore must consider aspects of global climate protection and compatibility within the scope of their planning and assessment. However, this does not mean that climate protection automatically takes precedence over other concerns.

NGOs are increasingly filing lawsuits against specific projects and facilities for alleged non-compliance with climate protection obligations. Additionally, NGOs have begun to file civil lawsuits against individual companies, following the Anglo-Saxon model of strategic litigation. These include lawsuits for alleged co-causation of climate change damage due to historical emissions (eg, the case of the Peruvian Andean farmer Lliuya against RWE) and lawsuits aimed at restricting or stopping business activities owing to alleged climate damages. In Germany, civil cases have been brought against companies such as Volkswagen, BMW and Mercedes-Benz in order to stop the sale of cars with internal combustion engines. These cases have recently been dismissed at the first instance and, in some cases, at the appeal instance. The plaintiffs intend to pursue the cases through all instances. Under current law, such lawsuits have no basis, and they cannot rely on the Federal Constitutional Court’s climate ruling because it is directed at the State and the legislature and does not empower NGOs to prohibit corporate activities at their discretion. Neither the climate ruling of the Federal Constitutional Court nor the constitution can be interpreted as a mandate for the de-industrialisation of the country in the form of a “de-growth strategy”. Instead, the constitution and environmental law presume an industrialised society. Nevertheless, such lawsuits can be a burden on business investment. It can be expected that NGOs will continue to seek further grounds for litigation, which will require industry and the economy to be particularly cautious in dealing with climate legal questions.

In addition to the increasing pressure to decarbonise, Germany faces the challenge of phasing out nuclear power and coal at almost the same time. Russia’s war against Ukraine has also highlighted Germany’s over-reliance on Russian gas. Industry and infrastructure must therefore undergo an unprecedented transformation process. Large-scale offshore wind projects in the North Sea and the Baltic Sea, the timely construction of grid connections for these wind farms, the rapid construction of power transmission lines from north to south, or large photovoltaic (PV) projects (such as LEAG’s Gigafactory in Saxony and Brandenburg) must be implemented in a short period of time. In addition, new power plant capacity is needed in the form of gas-fired power plants, LNG supply projects, hydrogen production, and decarbonisation projects for particularly energy-intensive industries such as steel, chemicals, and paper. All these projects and efforts will be accompanied by a variety of government support measures, such as carbon contracts (CfDs).

To ensure security of supply and the rapid transformation of industry and the economy towards decarbonisation, the legislators have taken various measures to speed up permitting procedures. Most recently, the EU legislator has adopted the Net Zero Industry Act to speed up approval processes and improve investment conditions for the production of clean technologies. This is intended to be achieved by reducing approval times, streamlining procedures, and simplifying the production conditions. The law is part of the EU’s Green Deal and aims to increase the competitiveness of EU industry. The implementation of these measures in German permitting law and, most importantly, the pragmatic and rapid handling of these streamlined procedures by the licensing authorities will be crucial for the success of these efforts. It is expected that such projects will continue to be contested, so it will also depend on how efficiently such proceedings are conducted in court to provide speedy planning and legal certainty for investments.

The major transformation projects to decarbonise the German economy by switching to green hydrogen and renewable energy supply are “operations at the open heart” of the industrial society, as such restructuring and retrofitting measures must take place while steel, automotive or chemical plants are operating under already challenging circumstances. Accordingly, there is a considerable need for planning and legal certainty for such long-term investments. However, the experience of the nuclear and coal phase-out shows that the companies and industries concerned often cannot rely on the legislator, who may change the framework conditions at short notice. The Federal Constitutional Court has recognised that the legislator has a wide margin of discretion in making such changes. As a result, where possible, companies insist on specific public-law contracts with the State so as to provide for additional legal security. This was, for example, the case with the phase-out from nuclear energy and coal, which the authors accompanied on the side of the operators.