Germany - Europe's largest economy and its manufacturing powerhouse - is aiming to become climate-neutral by 2045, in part through plans to meet 80% of its electricity needs with renewables by the end of the current decade.
It emitted 640 million metric tons of carbon dioxide in 2025, down 1.5% or 9 million tons from the previous year, Agora said in its annual review.
While Germany met its national annual emissions target last year, that reduction was less than half the savings recorded in 2024, Agora's calculations showed. And it was driven partly by lower output in energy-intensive industries due to prolonged weak demand and strained global market conditions, though record solar power generation also contributed.
"Wind and solar energy will remain the backbone of Germany's energy transition in 2025 as well," said Julia Blaesius, director of Agora Energiewende Germany.
"However, the power sector - so far the driving force behind emissions reductions - cannot permanently compensate for the shortcomings in switching to climate technologies in transport and buildings," she added.
COLD TEMPERATURES, MORE FUEL USE DRIVE HIGHER EMISSIONS
Following years of insufficient progress in the shift to technologies like heat pumps and electric vehicles, emissions in the buildings and transport sectors rose in 2025, Agora found.
Higher consumption of heating oil and natural gas due to a cold start to last year lifted emissions from buildings by 3 million tons, or 3.2%, compared to 2024.
In transport, slightly higher fuel use increased emissions by 2 million tons, or 1.4%.
SOLAR ENERGY IS THE SILVER LINING
On the positive side, record solar power generation offset a weak year for wind and hydropower. Accounting for an 18% share of the electricity mix, solar energy overtook natural gas and coal for the first time.
In addition, more heat pumps than gas heating systems were sold for the first time in 2025, at around 300,000 units.
According to the analysis, the growing share of renewable energy in the power mix dampened a rise in prices, though electricity costs on the exchange still rose by an average of 13% to 89 euros ($104) per megawatt hour in 2025.
(Reuters, January 7, 2026)