Germany: A Public Law: Planning and Environment Overview
The Challenges of Environmental Law in Germany 2026
Germany is the industrial heartland of Europe – and environmental law will play a decisive role in shaping its future. Few areas of law are as politically charged, as dynamic, and as consequential for the economy. It is shaped by international and European regulation, deeply intertwined with constitutional law, and subject to constant change driven by political shifts and technological disruption. Environmental law is not “law in the books”. It is law in action.
The challenge has become fundamental for Germany’s economic model. The simultaneous transformation to carbon neutrality, the phase-out of nuclear power and coal, and Russia’s war against Ukraine have exposed Germany’s energy vulnerabilities and placed unprecedented pressure on industry. The European Green Deal, the Fit-for-55 package, and the German Climate Protection Act have set ambitious targets: CO2 emissions are to be reduced by at least 65% by 2030 and 88% by 2040, with net greenhouse gas neutrality by 2045. A key component is the European Emissions Trading System, which will be expanded to include transport and buildings in the future. Climate protection has become an explicit factor in environmental planning decisions. Authorities must now factor climate protection into planning decisions. However, this does not mean that climate protection automatically overrides all other concerns. It must be balanced against other constitutionally protected interests, including economic freedom and security of supply.
Climate litigation against individual companies: a threat without legal foundation
NGOs have increasingly turned to the courts to advance climate-related claims against individual companies – following the Anglo-Saxon model of strategic litigation. Civil lawsuits have been filed against major German companies such as RWE, Volkswagen, BMW, and Mercedes-Benz, seeking to hold them liable for alleged climate damage or to stop the sale of combustion engine vehicles. In May 2025, the Oberlandesgericht Hamm delivered a ruling in the landmark case of the Peruvian farmer Lliuya against RWE, dismissing the claim after nearly ten years of litigation. While the court discussed the theoretical possibility of emitter liability under German civil law, the claim itself failed on the facts. The cases against automotive manufacturers have likewise been dismissed across instances. Under current law, such lawsuits lack a viable legal basis. The Federal Constitutional Court’s 2021 climate ruling is directed at the state and the legislature – it does not empower NGOs to prohibit corporate activities at their discretion. Neither the constitution nor environmental law can be read as a mandate for de-industrialisation of Germany in the guise of a “de-growth strategy”. Instead, the constitution and environmental law presume an industrialised society. Nevertheless, such litigation absorbs significant resources, creates uncertainty, and may affect investment decisions. Companies must therefore remain legally and strategically prepared as new arguments continue to be tested in court.
Regulatory overload and the turn towards simplification
The regulatory burden on German industry had reached a critical level. Directives like the Corporate Sustainability Due Diligence Directive (CSDDD), the Corporate Sustainability Reporting Directive (CSRD), and the proposed Green Claims Directive threatened to impose significant compliance obligations on companies – particularly SMEs – with, in some cases, limited additional environmental benefit. The new German coalition government, formed in early 2025, has recognised this and placed deregulation at the centre of its agenda. Germany’s national Supply Chain Due Diligence Act (LkSG) is set to be abolished. The coalition agreement emphasises voluntary measures, incentives, and corporate self-governance over prescriptive mandates.
At the European level, the tide has turned as well. In December 2025, the EU institutions reached a provisional agreement on the Omnibus I simplification package, significantly rolling back the scope and stringency of both the CSRD and the CSDDD. According to the provisional political agreement, the CSRD’s scope will be narrowed to companies with more than 1,000 employees and over EUR450 million in turnover – removing around 80% of previously affected companies. Mandatory data points have been reduced by 70%. The CSDDD thresholds have been raised to 5,000 employees and EUR1.5 billion in turnover, the obligation to adopt a Paris-aligned climate transition plan has been eliminated, and the application timeline has been pushed to 2029. In December 2025, the Commission also adopted Omnibus VIII on environmental legislation, simplifying rules on industrial emissions, environmental assessments, and circular economy. These developments signal a shift towards regulatory consolidation and simplification. But the devil will be in the transposition, and companies cannot afford to lower their guard until the new framework is firmly in place.
The transformation of German industry
The decarbonisation of the German economy is nothing less than an operation on the open heart of an industrial society. Steel plants must switch to green hydrogen, chemical facilities must be retrofitted, and automotive production must be restructured – all while operations continue under already challenging conditions. The scale of infrastructure needed is staggering: large-scale offshore wind in the North and Baltic Seas, rapid construction of grid connections and north-south power transmission lines, new gas-fired power plants, liquefied natural gas terminals (LNG), hydrogen production facilities, and gigawatt-scale solar projects. To finance this transformation, Germany has established a special fund for infrastructure and climate neutrality in the amount of EUR500 billion – a targeted vehicle to crowd in private investment, de-risk large-scale projects, and provide long-term budgetary certainty for the decarbonisation of core industrial value chains. Government support measures such as carbon contracts for difference (CfDs) will accompany these efforts. The EU’s Clean Industrial Deal, the Net Zero Industry Act, and a tailored state aid framework for clean technologies are designed to accelerate deployment and provide greater legal certainty for investment decisions.
In parallel, the geopolitical landscape has given rise to new imperatives. The EU’s “Readiness 2030” initiative links defence objectives with industrial policy, supply-chain resilience, and joint capability development. The European Defence Industry Programme aims to expand production capacities and diversify supply chains for defence material. While primarily a security instrument, it carries significant cross-over effects for industrial permitting, public procurement, and state aid that must be factored into project planning.
To enable this transformation, legislators at both the European and German level have taken measures to speed up permitting. But legislative acceleration on paper means nothing without pragmatic and rapid implementation by licensing authorities on the ground. It is equally critical that courts conduct proceedings efficiently to provide timely legal certainty for investment decisions. Projects will continue to be contested. Speed and certainty in administrative and judicial proceedings are not a luxury – they are a precondition for the success of the energy transition.
Planning security: the unresolved challenge
For industry, the most pressing concern remains planning and legal certainty for long-term investments. The experience of the nuclear and coal phase-outs has taught German industry a hard lesson: the legislature can change the rules at short notice, and the Federal Constitutional Court has confirmed that lawmakers enjoy wide discretion in doing so. Companies and industries cannot simply rely on the stability of the regulatory framework. Where possible, they must insist on binding public-law contracts with the state to secure additional legal protection – as was the case with the nuclear energy and coal phase-outs.