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German government has issued letters of interest for five overseas gas-fired power projects worth €893 million, including in Iraq and Mexico.
Guarantees would come through Hermes export credit insurance, designed to protect German companies against foreign payment defaults.
Critics warn new fossil fuel projects undermine Germany’s Paris Agreement commitments.
Berlin still targets 80% renewable electricity by 2030, but dropped a binding 2035 climate-neutral grid goal.
Plans to phase out coal by 2030 face opposition from eastern mining states, keeping gas as a “bridge” technology.
Deal with Qatar for 2 million tonnes of LNG a year from 2026 now at risk due to an EU directive on rights and sustainability.
Last nuclear plants closed in 2023, increasing reliance on gas and imports.
Skilled labour shortage threatens renewables roll-out: 157,000 additional workers needed by 2030.
The German government has signalled interest in supporting the construction of new gas-fired power plants abroad, raising questions over its commitment to international climate targets.
According to a response from the Ministry of Economic Affairs to a Green Party inquiry in the Bundestag, Berlin has issued “letters of interest” for five overseas gas projects worth a combined €893 million (about Rs 9,068 crore), including ventures in Iraq and Mexico, revealed a report by newspaper Berliner Morgenpost. The letters indicated a willingness to provide export credit guarantees, known as Hermes guarantees, to German companies. However, these do not yet constitute binding commitments.
Stopping new fossil fuel projects is crucial for countries to achieve their climate goals, accordion to a June 2024 study. Critics argue that Germany risks sending mixed signals by financing gas projects abroad while presenting itself as a climate leader at home, pointed out the Berliner Morgenpost report.
The debate comes as Germany continues to navigate its complicated energy transition. The country has pledged to generate 80 per cent of its electricity from renewables by 2030, but a legally binding target for an almost fully greenhouse gas-free grid by 2035 was dropped earlier this year, according to German climate news website Green Energy Wire. Instead, the revised Renewable Energy Act states only that Germany should aim for climate neutrality in the power sector after completing the coal phase-out.
The government says it still intends to “ideally” pull forward the coal exit from 2038 to 2030. However, the Clean Energy Wire pointed out that political resistance in eastern mining states and the slow roll-out of renewable alternatives have left ministers relying on gas plants as a bridge technology, eventually to be converted to run on hydrogen.
Germany’s efforts to diversify gas supplies are also facing fresh challenges. In November 2022, Berlin struck a deal with Qatar for up to 2 million tonnes of liquefied natural gas (LNG) a year, starting in 2026, as part of Europe’s strategy to reduce dependence on Russian energy following Moscow’s full-scale invasion of Ukraine.
But that deal has since been thrown into doubt. According to a German TV broadcaster Deutsche Welle report, Qatar has threatened to halt LNG deliveries in response to an EU directive aimed at strengthening human rights and environmental standards in global supply chains. Critics in Doha have labelled the regulations too costly and bureaucratic, stated the report.
The prospect of losing Qatari supplies underlines Germany’s vulnerability during its transition away from coal and nuclear power. The last three nuclear plants in the country closed in 2023 and the country saw a rise in energy consumption in the first quarter due to “weak renewables output”, said another report by Clean Energy Wire.
Compounding these difficulties is a shortage of skilled workers for the clean energy build-out. A recent study by the Institute for Employment Research (IAB), reported German newspaper Süddeutsche Zeitung, estimated that Germany will need 157,000 additional employees for wind and solar projects by 2030. The tightest shortages are expected in electrical engineering and energy technology, where vacancies already take more than 100 days to fill.