EXCLUSIVE: Germany’s New Coalition Deal—Infrastructure, Energy, and Climate Policy Take Center Stage

Germany is finalizing a new coalition agreement, with major implications for infrastructure, energy, and climate policies. A EUR 500 billion special fund is set to reshape transportation, while energy reforms focus on lowering costs and expanding gas power plants.

Germany's Christian Democrats (CDU/CSU) and Social Democrats (SPD) have outlined the first written results from coalition negotiations, which will shape the new government’s agenda. Key differences in transport policies between the two parties have already been reported by RAILTARGET here.

Germany's Investment in Infrastructure

The most significant change is the creation of a special infrastructure fund, a key victory for the SPD. The fund, worth EUR 500 billion over ten years, will cover federal, regional, and local projects and lead to a suspension of Germany’s strict debt brake, a fiscal policy CDU/CSU has long defended. The fund will finance infrastructure investments in transportation, defense, civil protection, energy, healthcare, education, research, and digitalization.

Germany’s federal states will receive EUR 100 billion for their own projects. Additionally, debt limits will be adjusted, allowing the federal states to take on new loans up to 0.35% of GDP annually. For cross-border transport projects, a special clause commits the government to accelerating infrastructure development with Poland and the Czech Republic. The new government explicitly aims to match the infrastructure quality of Germany’s western neighbors.

Germany and the Energy Sector

Germany’s energy strategy is closely linked to transport competitiveness. The government plans to cut electricity taxes by five cents per kWh (to the EU’s minimum level) and halve transmission fees, benefiting industries like rail transport. Additionally, electricity price compensation schemes for energy-intensive industries will be expanded to maintain global competitiveness.

To ensure energy stability and price control, Germany will increase its reserve power capacity while revising its power plant strategy. The plan includes incentives for investors to build up to 20 GW of gas power plants by 2030, replacing coal-fired stations. There’s also a commitment to maximizing the potential of renewables, including bioenergy, hydropower, geothermal energy, and storage solutions. However, nuclear power is entirely absent from the program, indicating CDU/CSU’s failure to push for even a minimal review of Germany’s nuclear phase-out.

The government will continue its decarbonization efforts with carbon capture programs for energy-intensive industries and hydrogen infrastructure development. While reaffirming its commitment to climate goals, the coalition also pledges a pragmatic, less bureaucratic approach that balances economic growth with social stability.

Germany's Battle Against Climate Change

Beyond the automotive sector, Germany plans to strengthen strategic industries such as semiconductors, battery production, hydrogen technology, and pharmaceuticals. E-mobility will receive further incentives, while public transportation will continue to benefit from the nationwide Deutschlandticket.

Germany’s coalition deal is shaping up to be one of the most ambitious in recent years. With massive investments in infrastructure, strategic energy policies, and a continued push for climate action, the new government aims to strike a balance between economic growth and environmental responsibility. The question remains: will these bold plans be enough to drive Germany forward?

Source: fragdenstaat.de