Germany Rethinks Energy Policy with Bold New Steps

Stuttgart Cuts Emissions by Over Half

Stuttgart has exceeded its 2023 climate target, reducing carbon dioxide emissions by 54 percent compared to 1990 levels. According to the latest energy and climate report presented to the city’s Climate and Environment Committee, the final energy consumption also dropped by 23 percent during the same period. These energy policy developments strengthen the city’s roadmap toward reaching full climate neutrality by 2035.

Much of the progress has been attributed to a mix of policy-driven and community-supported measures. Among them are the implementation of the “Plusenergie” standard for all new public buildings, large-scale renovations of older properties for better energy performance, and the use of an internal CO₂ price, currently at €305 per ton. These steps, combined with an expanding reliance on renewable energy and a steady transition away from fossil fuels, have had measurable results.

Since 1977, the city’s energy management efforts have led to a nearly 50 percent reduction in heating consumption in public buildings. Municipal electricity consumption, though higher than in past decades, has been offset by a transition to green power and bio-based gas. As a result, emissions from city-owned buildings have fallen by over 75 percent since 1990.

Payouts for Wind and Solar to Boost Support

A new scheme will reward municipalities and residents for supporting the expansion of solar and wind energy in Germany. Local governments are set to receive between 0.2 and 0.3 cents per kilowatt-hour from newly installed renewable energy systems backed by the Renewable Energy Act. The goal is to increase public approval for renewable energy projects by offering direct financial benefits.

For residents, developers will offer participation models such as cooperative shares, investment opportunities, or discounted electricity tariffs. These mechanisms aim to increase involvement and reduce resistance to renewable infrastructure in populated areas.

While earlier drafts of the proposal encountered delays due to disagreements between municipalities, investors, and energy groups, a compromise has now been reached. The agreement excludes renewable systems selling electricity through long-term Power Purchase Agreements, to preserve investor confidence in such projects. The funds collected by towns can be used for various community services, including education and childcare.

Germany Turns to Domestic Gas in Policy Shift

In a significant shift, the federal government has approved new domestic gas development in cooperation with the Netherlands. A recent cross-border agreement will allow Dutch company One-Dyas to extract gas from fields in the North Sea that span the two nations’ maritime boundaries.

One field is already operational, supplying 35 percent of its output to Germany. Additional facilities are planned, according to company CEO Chris de Ruyter van Steveninck. He emphasized that Germany should utilize its own gas reserves to ensure supply stability during the ongoing energy transition.

The decision comes amid growing pressure to balance climate targets with reliable energy access. While not without controversy, the gas development project is being framed as a short-term bridge to support Germany’s broader transition toward clean energy sources.

A Three-Track Approach to Energy Reform

Germany’s latest energy developments reflect a combined approach that includes aggressive local emissions cuts, citizen-level financial participation, and the reactivation of domestic gas reserves. While cities like Stuttgart showcase what is possible through long-term planning and investment in sustainability, new legislation in Bavaria promotes grassroots support for green infrastructure.

At the national level, the federal government is making calculated moves to secure energy through regional gas extraction, marking a return to fossil resource use—albeit in a limited and cooperative framework.

Together, these actions suggest a more adaptable and layered energy strategy. By blending renewable expansion with transitional resources and economic incentives, Germany is redefining its path toward a cleaner, yet reliable energy future.