On 29 April 2021, the German Federal Constitutional Court published its groundbreaking ruling following several constitutional complaints against provisions of the German Federal Climate Change Act of 2019. In its order, the First Senate of the Constitutional Court held that the provisions determining national climate targets and the annual emission amounts allowed until 2030 are incompatible with fundamental rights insofar as they lack sufficient specifications for further emission reductions from 2031 onwards. The German legislator is now obliged to enact provisions by 31 December 2022 that specify in greater detail how the reduction targets for greenhouse gas emissions are to be adjusted after 2030.

The German Federal Climate Change Act

The German Federal Climate Change Act of 12 December 2019 (Bundes-Klimaschutzgesetz, KSG) seeks to address the effects of global climate change. The basis of the KSG is the obligation under the Paris Agreement − which entered into force on 4 November 2016 − to limit the increase in the global average temperature to well below 2°C and preferably to 1.5°C above pre-industrial levels, as well as the commitment made by the Federal Republic of Germany to pursue the long-term goal of greenhouse gas neutrality by 2050. The KSG makes it obligatory to reduce greenhouse gas emissions by at least 55% by 2030 relative to 1990 levels. To that end, it sets out the annual allowable emission amounts for various sectors in line with the reduction quota for the target year 2030. It does, however, not contain provisions which deal with the period beyond 2030. Instead, it only provides that in the year 2025 the Federal Government must set annually decreasing emission amounts for further periods after the year 2030.

The Constitutional Complaints

The claimants – mostly young people from Germany but also individuals from Bangladesh and Nepal as well as environmental associations – alleged that this was insufficient. They claimed that the German Federal Republic failed to introduce an effective legal framework which would swiftly reduce greenhouse gases, especially carbon dioxide (CO₂). They advocated for a legal framework which would support an increase in the Earth’s temperature to no more than 1.5°C, or at least to well below 2°C. The claimants argued that a temperature increase of more than 1.5°C would place millions of lives in danger and would risk the crossing of tipping points with unforeseeable consequences for the climate system. They claimed that the reduction of CO₂ emissions as currently laid down in the KSG is not sufficient to stay within the remaining CO₂ budget that would correspond to a temperature increase of 1.5°C. The claimants  argued that the German State failed to comply with its constitutional duties of protecting life and physical integrity under Art. 2(2) Basic Law for the Federal Republic of Germany (Grundgesetz, GG) and protecting properties under Art. 14(1) GG, and violated their fundamental rights to a future in accordance with human dignity and a fundamental right to an ecological minimum standard of living (ökologisches Existenzminimum). With regard to future burdens arising from the obligations to reduce emissions after 2030, the claimants argued this would impair their fundamental freedom rights in general.

The Decision

On 24 March 2021, the Constitutional Court issued its decision. While the Constitutional Court considered the complaints of the natural persons admissible, it denied the standing of the environmental associations to lodge a constitutional complaint. The Constitutional Court’s central finding is that the KSG violates the fundamental freedom rights of the individual claimants residing in Germany because the provisions irreversibly offload major emission reduction burdens onto periods after 2030.

The Constitutional Court argued that every amount of CO₂ that is allowed today narrows the remaining options for reducing emissions in compliance with the obligations to limit the increase in the global average temperature to well below 2°C and preferably to 1.5°C above pre-industrial levels. For this target to be reached, the reductions still necessary after 2030 will have to be achieved with ever greater speed and urgency. These future obligations to reduce emissions affect practically every type of freedom because virtually all aspects of human life involve the emission of greenhouse gases and are thus potentially threatened by drastic restrictions after 2030. Therefore, the legislator should have taken precautionary steps to mitigate these major burdens in order to safeguard the freedom guaranteed by fundamental rights. The statutory provisions on adjusting the reduction pathway for greenhouse gas emissions from 2031 onwards are insufficient to ensure that the necessary transition to climate neutrality is achieved in time. The legislator must therefore enact provisions by 31 December 2022 that specify in greater detail how the reduction targets for greenhouse gas emissions are to be adjusted for periods after 2030.

Planned Amendments to the German Federal Climate Change Act

Following this ruling, the Federal Cabinet approved on 12 May 2021 a reform to the KSG that includes increasing the 2030 target for greenhouse gas emissions to 65% instead of the previous 55%. By 2040, a reduction of 88% is to be achieved and in 2045 Germany shall become climate neutral, instead of 2050. The changes still need to be approved by parliament before they take effect.

The Constitutional Court’s decision demonstrates that climate change litigation is leading to amended climate laws to which industry players must adapt. The amendments to the KSG will therefore likely affect every industry of the German economy. Industry players may need to review their business models and ESG guidelines. While the decision is based on German law and is not binding in other countries, it may nevertheless be taken into account by foreign decision-making authorities.