France-Germany: reconcilable priorities?

Nuclear Power plans France and Germany
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Writing recently in Der Spiegel, the Secretary of State for European affairs, Clément Beaune, underlined the indispensable nature of the “Franco-German alliance”. For decades it has been a vital and undeniable paradigm of European integration policy: without an understanding between Paris-Berlin there is no hope! The adoption of the NextGenerationEU recovery plan in July 2020 demonstrated this vividly. This unspoken rule will affect the implementation of the European Green Deal. Given the differing structure of environmental and energy policies in France and Germany, this implementation is unlikely to be an easy task.

Divergent frameworks

The priority given to the modernisation of the French nuclear power industry, reaffirmed by the French government at the start of October as part of the “France 2030” investment plan and supported by the country's main political parties, contrasts with the forthcoming phase-out of nuclear power in Germany. The “Mehr Fortschritt wagen” government agreement also confirms how this goal is being upheld: “We remain committed to phasing out nuclear power.” The share of electricity generated by this sector around the world may be just 10%, but in France it amounts to 70%. By contrast, the phasing out of coal, scheduled for 2021, a campaign promise made by Emmanuel Macron in 2017, will be postponed until after 2022. In this respect, the coalition agreement reached by our German neighbours envisages that coal power plants will be closed down by 2030, ahead of the previous government's deadline of 2038.

Despite a sharp increase in the share of renewable energy in the French energy mix in recent decades, dependence on nuclear power in France remains very high. The contrast between the two countries is just as stark when you look at the effort made by Germany to expand renewable energy to more than 50% since the decision taken in 2011 to phase out nuclear energy, which accounts for no more than 12.5% of national electricity production, on a par with wind power. It is important to stress that the new German government is aiming to increase the share of renewable energy to 80% by 2030, while the French goals remain much more modest in comparison. While the European goal is 55% by 2030, the Climate and Resilience Law, passed and published in summer 2021, is unlikely to allow France, which was still peaking at around 20% in 2020, to achieve the objectives set.

While on both sides of the Rhine there is a shared realisation that a redoubling of efforts is needed to allow the ambitious international objectives to be achieved, adopting common measures is not easy when the paradigms on which decision-making depends or the objectives to be achieved diverge so fundamentally.

Hydrogen strategy and taxonomy

The government agreement recently reached in Germany does not call into question Germany's support for the European Commission's “Fit for 55” package, which envisages a 55% reduction in greenhouse gases by 2030. The French government is also in favour, while still expressing some reservations. Particularly concerning the overhaul and extension of the Emissions Trading System (ETS), an issue which Paris regards as a “priority”, while remaining cautious about its potential consequences on the economic sectors affected, i.e., the air and maritime industries. The situation remains fluid however.

The thorny issue for the months ahead will no doubt be the role of nuclear energy. Since last summer, Paris has been defending the place of nuclear energy on the list of clean resources, to ensure that nuclear energy is recognised and taken into account. In this respect, the 30 billion euro “France 2030” reindustrialisation plan presented by President Macron at the start of October grants a significant share to nuclear energy, which would promote the production of hydrogen in France. Many in France have recently criticised the likely categorisation of gas and nuclear energy as “interim energy sources” in the European taxonomy. Discussions between the two capitals risk being very lively in this respect as the new government in Berlin not only recommends “that nuclear energy should cover the costs it generates”, but calls for the creation of a “European Union of green hydrogen”, which is a way for the new government in Berlin to issue a polite but clear rejection of French ambitions.

Ongoing disagreements on the CBAM

The Carbon Border Adjustment Mechanism (CBAM), which is expected to gain momentum between 2026 and 2036, aims to raise the price of imports from third countries with less strict environmental standards in the most polluting sectors (steel, electricity, cement, fertiliser, aluminium). France and Germany have adopted different positions. Tabled again recently by Emmanuel Macron, and previously championed by Jacques Chirac in his time, this recurring issue is one that German governments have always regarded with many reservations, maintaining in particular that the mechanism is perceived by Europe's trading partners as an increase in protectionism. German industry, which exports more than French industry, is particularly opposed to this project. Unsurprisingly the “traffic light” government’s programme barely mentions the subject for the 4 years to come and only commits to “strive for effective protection against carbon leakage”. For the French government, which intends to move forward on this issue under the French presidency of the EU Council in the first half of 2022, things are no doubt off to a poor start without German support for this goal.

The success of European integration policy continues to rely on the art of compromise, which is indispensable for any political action. In view of the above, it is doubtful that Paris and Berlin will find a middle ground on all of these subjects taken individually. Unless, as a diplomat recently confided to Le Monde, “there is some kind of agreement between Paris and Berlin under which the former leaves the transport and buildings ETS to the latter, and the latter agrees not to kill the Carbon Border Adjustment Mechanism”.