Category Deep dive

Fossil phase-out

Achieving climate neutrality in Germany will require an almost complete phase-out of fossil fuels ("decarbonization") such as coal, natural gas and crude oil, as the options for CO₂ capture and storage in Germany are severely limited.

All sectors have to contribute: In the energy sector, this means a rapid and comprehensive reduction in electricity generation from coal, oil and gas-fired power plants; in the transport sector, a switch to electric vehicles and a higher use of local public transport and rail traffic. In the buildings sector, better insulation will lead to reduced energy consumption, and oil and gas heating systems will need to be replaced. In the industrial sector, the consumption of fossil fuels must be reduced, including fossil energy as feedstocks in the chemical industry.

In this context, the phase-out of fossil fuels must go hand in hand with electrification in the sectors - fed by electricity from renewable sources.

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Annual primary energy demand for natural gas

543% on track Compared to the scenario Technology Mix
One-off effect
Energy crisis

Annual demand for natural gas as a primary energy source in Germany, particularly for power generation, heating, and process heat in industry.

In contrast to other conventional primary energy sources, especially coal and mineral oil, demand for natural gas has not declined from 2015 to 2021, but increased. While the phasing-out of coal use by 2038 at the latest is regulated by law, natural gas is still the preferred energy source for heating and is used extensively to generate heat in industry. Natural gas is also seen as a "bridge" to CO₂-neutral processes based on green hydrogen. Nevertheless, climate neutrality can only be achieved by phasing out natural gas use as well.

Key points

  1. Climate neutrality also requires phasing-out the use of natural gas.
  2. A decline in natural gas demand was observed for the first time during the energy crisis in 2022 - the sustainability of this effect remains to be seen.
  3. To achieve the goal, gas heating systems in particular have to be replaced by more climate-friendly heating systems, such as heat pumps, and industrial use for process heat has to be reduced.

Annual primary energy demand for lignite and hard coal

91% too slow Compared to the scenario Technology Mix

Annual primary energy demand for lignite and hard coal in Germany, e.g. as an energy source as well as feedstocks in industry or for power generation in power plants.

In Germany, lignite is used almost exclusively for power generation, while the share of hard coal was around 60% in 2018. Most of the remaining hard coal is used in steel production.

Key points

  1. The use of coal for power generation has been declining for years.
  2. With the further expansion of renewable power generation and the ongoing phase-out of coal-fired power generation, this trend is likely to continue.
  3. In the medium to long term, steel production will also have to be converted from coke- or coal-based processes to hydrogen-based direct reduction processes.

Annual primary energy demand for oil

223% on track Compared to the scenario Technology Mix

Annual demand for oil in Germany, primarily for the production of fuels, for use as heating oil and in the petrochemical industry.

In terms of demand in 2018, the most important mineral oil products in Germany are diesel and gasoline used in transport, followed by petroleum gasoline in the petrochemical industry, light heating oil for heat generation, kerosene as aircraft fuel, and heavy heating oil used in industry.

Key points

  1. After a decline in petroleum demand in the 1990s due to the replacement of oil heating with gas heating, consumption has stagnated in recent years.
  2. According to the Ariadne target paths, mineral oil demand has to decrease significantly from 2025 at the latest, which has to be achieved primarily through the rapid ramp-up of electromobility in the transport sector.

Annual primary energy demand for fossil fuels

173% on track Compared to the scenario Technology Mix
One-off effect
Energy crisis

Annual demand for fossil fuels in Germany, i.e. natural gas, lignite, hard coal and crude oil.

To achieve climate neutrality in 2045, CO₂ emissions have to be almost completely stopped a few years earlier, as opportunities for CO₂ extraction and storage in Germany are severely limited. Due to CO₂ emissions generated in particular by the conversion of fossil energy into electricity, heat and fuels, this is tantamount to almost completely phasing out fossil fuels.

Key points

  1. Achieving climate neutrality requires a far-reaching phase-out of the use of fossil fuels.
  2. The use of fossil fuels in Germany has been declining since 1990, and based on the Ariadne scenarios, the trend has to continue at an accelerated pace until 2030.
  3. The expansion of electromobility and the ramp-up of heat pumps are the means of choice in the coming years.

Annual net power generation from coal, gas, and oil

160% on track Compared to the scenario Technology Mix

Annual net electricity generation from lignite, hard coal, gas, and oil-fired power plants (not including internal demand of plants).

CO₂ emissions from the energy industry are largely determined by electricity generation from fossil fuels - hard coal and lignite, natural gas and oil. In parallel with the expansion of renewables, also the phase-out of fossil-based power generation has to be pushed forward quickly.

Key points

  1. CO₂ emissions in the energy industry are largely determined by the generation of electricity from fossil fuels.
  2. The decline observed since 2017, particularly in coal-fired power generation, therefore has to continue in parallel with the accelerated expansion of renewables.
  3. A key policy instrument for this is the pricing of CO₂ emissions in the EU ETS.

Share of passenger cars with an internal combustion engine in new registrations per year

55% too slow Compared to the scenario Technology Mix

The indicator shows the share of new registrations of passenger cars with internal combustion engines per year. This category includes the fuel types gasoline and diesel including hybrids, but also liquid and natural gas.

Despite the increasing relevance of all-electric passenger cars, most newly registered passenger cars in Germany still have an internal combustion engine. Every newly registered combustion engine remains in the German passenger car fleet for many years: As of January 1, 2023, more than 23% of passenger cars in Germany were 15 or more years old. Due to this longevity of passenger cars in the German stock, the proportion of newly registered internal combustion vehicles must fall rapidly in the coming years so that the consumption of fossil fuels can be reduced.

Key points

  1. The majority of newly registered passenger cars in Germany today still have an internal combustion engine, whch remain in the German passenger car stock for many years.
  2. EU regulation envisages an end to new registrations of vehicles with internal combustion from 2035; how quickly their share will fall by 2035 is however uncertain.
  3. The larger the share of newly registered cars with internal combustion engines in the coming years, the greater will be the final energy demand of passenger car traffic for CO₂-neutral fuels, which are expected to be scarce.

Annual demand for gasoline and diesel in the transport sector

90% too slow Compared to the scenario Technology Mix
One-off effect
Pandemic

The indicator shows the annual demand for gasoline and diesel fuel in the transport sector. These fuels are consumed in particular in road transport, but also in small quantities in rail and inland waterway transport.

The transport sector has always been heavily dependent on gasoline and diesel fuel, with cars, trucks and buses in particular being powered almost exclusively by these fuels today. Small amounts of diesel fuel are also consumed in the part of rail transport, which has not yet been electrified, as well as in inland waterway transport. The goal of rapidly reducing GHG emissions is accompanied by the gradual replacement of gasoline and diesel with electricity and renewable energy.

Key points

  1. The goal of rapidly reducing GHG emissions from transportation is accompanied by the gradual replacement of gasoline and diesel with electricity and renewable energy.
  2. How rapidly the dependence on gasoline and diesel can be reduced depends on how quickly all-electric vehicles are adopted, how efficiently internal combustion engines are operated, and how much mileage can be shifted to rail or avoided completely.
  3. Driving services that are not directly electrified by 2045 will have to be provided by hydrogen or CO₂-neutral fuels.

Sales of oil- and gas-fired heating systems per year

−117% step back Compared to the scenario Technology Mix

This indicator describes the annual new installations of oil and gas heating systems for the provision of space heating and hot water in the building sector.

Sales of oil and gas heating systems have increased significantly in recent years, with more gas heating systems being sold in particular. In contrast, a transformation of the building sector requires a rapid switch from fossil-fuelled heating systems to heat pumps and district heating.

Key points

  1. Contrary to the necessary development, sales of fossil-fuelled heating systems continue to increase, in particular due to the continuously high share of gas boilers in new buildings.
  2. For a successful transformation, the share of heat pumps and district heating in newly installed heating systems must increase rapidly.

Annual oil, coal and gas demand in the buildings sector

78% too slow Compared to the scenario Technology Mix
One-off effect
Energy crisis

Annual demand for the fossil energy sources natural gas, oil and coal in the building sector only includes direct use in the building. If gas, oil and coal are used to generate electricity or district heating, this is accounted for in the energy sector.

The absolute demand for the fossil energy carriers natural gas, oil and coal has remained constant in the buildings sector over the past years, although a rapid reduction would be necessary for a successful transformation: In the Ariadne scenarios, the use of fossil energy is already reduced to about 50% by 2030 compared to 2021.

Key points

  1. The demand for natural gas, oil and coal in the buildings sector is stagnating, although it should be reduced rapidly in line with the Ariadne target paths.
  2. For a faster reduction, overall final energy demand must be reduced by energetic retrofitting of buildings and reversing the trend of increasing per capita living space.
  3. In addition, fossil fuel demand has to be reduced by consistently switching energy sources from natural gas and oil to electricity and district heating.

Share of oil, coal and gas in final energy demand of the buildings sector

91% too slow Compared to the scenario Technology Mix

In addition to the direct use of fossil fuels in the building sector, this also includes the fossil-generated share of electricity and district heating used in buildings. Environmental heat for heat pumps is not included in the final energy consumption.

In order to reduce CO₂ emissions in the building sector, firstly, final energy consumption must decrease overall, and secondly, the remaining energy demand has to be met with renewable rather than fossil fuels (Ariadne, 2021). This indicator is a measure of the second strategy, which is primarily an energy source shift from gas and oil to renewable electricity and renewable district heating.

Key points

  1. The demand for fossil fuels must be reduced rapidly in order to cut emissions and become independent of fossil imports.
  2. The accelerated switch from gas and oil boilers to heat pumps and district heating is a central component of the transformation of the building sector in all scenarios.
  3. Above all, the availability of skilled labour is currently an obstacle to the replacement of heating systems.

Annual oil, coal and gas demand in the industry sector

118% on track Compared to the scenario Technology Mix
One-off effect
Energy crisis

This indicator describes the annual demand for the most important fossil energy carriers in industry. Only energetic use is taken into account, not the use as feedstocks in the chemical industry.

The three most important fossil energy sources, oil, coal (lignite and hard coal) and natural gas, serve the majority of industrial energy demand in 2020. At 220 TWh, natural gas is the most (and broadest) fossil energy source used. Coals (88 TWh) are used predominantly (~⅔) in steel production. Oils (28 TWh) are used marginally but across all subsectors, with a focus on the chemical industry.

Key points

  1. In 2020, the fossil energy sources oil, coal and especially natural gas are the backbone of the industry's energy supply.
  2. Successful transformation requires almost complete replacement: remaining fossil use is compatible with a successfully transformed energy system only under very narrow conditions.
  3. In the past, the use of fossil energy sources has already been greatly reduced, but this must be accelerated significantly.