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Environmental NGOs have warned that Germany鈥檚 will do little to boost the country鈥檚 shift to a climate-friendly economy. Especially the government鈥檚 spending plans in the housing and transport sector, where current emission reductions are far too slow to reach climate targets, drew criticism from activists.

Friends of the Earth Germany (BUND) said the budget cemented 鈥渨rong priorities鈥� in the transport sector. Instead of financing the construction of new roads, more money should go into the modernisation of existing infrastructure, especially bridges and the long-neglected railway system. 鈥淭he transport聽budget must concentrate on what is really necessary and what supports achieving the climate targets,鈥� said BUND head Olaf Bandt. 鈥淭here are not enough improvements for the millions of people that use buses and trains. There鈥檚 just not enough money going into public transport.鈥�

Environmental NGO WWF lamented that support for energy-efficient building modernisations is cut to 12 billion euros, down from 17 billion earmarked in 2024. 鈥淭his guts a central pillar of climate action,鈥� said WWF climate expert Viviane Raddatz. She criticised that hundreds of millions of euros are meant to be spent on liquefied natural gas (LNG) terminals and an oil refinery in the coming years.

Business associations took a slightly more positive view. Local utility association VKU said that a 400 million euro top-up of funds for more efficient heating grids to 1.4 billion euros marked a step in the right direction, but was not sufficient. VKU head Ingbert Liebing said at least 3.5 billion euros were needed to effectively implement municipal heating planning in the coming years, where district heating will play a central role.

In a similar vein, industry association BDI said the focus on investments in the budget set the right signal, but would not be enough for stabilising long-term business conditions. 鈥淲hat is lacking is a clearly communicated commitment to structural reforms,鈥� including major savings to balance the budget, said BDI managing director Tanja G枚nner. While the reduction of energy prices for companies provided much-needed relief, more had to be done now 鈥渢o decisively push ahead with the energy transition,鈥� G枚nner said. She added that climate action contracts, which compensate companies for the extra costs of climate-friendly production, are one option for the government to support industry decarbonisation.

In its budget proposal, the German government plans to finance numerous initiatives through substantial borrowing, particularly the country鈥檚 military expansion and investments in infrastructure and climate neutrality. The budget still needs to be adopted by parliament and Gemany鈥檚 states, which is expected to happen at the end of the year.