Climate policy and UN Cop meetings
Overview
Argus provides key insights on how global climate policies will affect the global energy and commodity markets. We shine a light on decisions made at UN Cop meetings, which have far-reaching effects on the markets we serve. Progress at Cop 30 in Brazil will be crucial in transforming ambitions into actions aligned with the goals of the Paris Agreement. Countries must produce new climate plans this year.
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News
Analysis
Mideast war renews focus on energy security, transition
Mideast war renews focus on energy security, transition
Houston, 25 March (Argus) — The depth of the war-driven Mideast Gulf oil and gas disruption and its undetermined length has prompted renewed discussion of energy security and transition in the industry, but familiar challenges remain. The argument in favor of fossil fuels has been "that they're portable and storable," investment firm Carlyle's chief strategy officer of energy pathways Jeff Currie said at CERAWeek by S&P Global on Tuesday. "That also makes them incredibly dangerous, as we're witnessing right now in the strait of Hormuz." "One of the biggest predictions you can make out of what's currently happening is (that) it's going to turbo charge the energy transition into any fuel you want to be local, distributed and not vulnerable to other parts of the world," Currie said. Lessons from the ongoing crisis may also apply to legacy energy systems, BP chief economist Gareth Ramsay said. "We have built a wonderful oil market, which is ... incredibly efficient, but efficiency is sometimes also fragility," Ramsay said. "Will countries now ask again, 'do we need our own refining capacity? Do we need to keep our refineries online now, even if they're uneconomic, even if they're costly?'" Bigger than the '70s The magnitude of the current crisis appears to be greater than even the 1973 Arab oil embargo, which has prompted a decades-long shift in energy policies globally, Ramsay said. "There is no potential for immediate supply response," he said. Even limited attacks by Yemen's Houthis on commercial shipping through the Red sea in 2023-24 have cut flows through the Suez canal by around 50pc, Currie said. Applying the same metric to the Mideast Gulf "means you could lose between 5-10mn b/d... which will have a significant impact and be similar to the 1970s," he said. The magnitude of Mideast Gulf supply loss and price-driven demand destruction may be apparent but its duration is not, ConocoPhillips chief economist Helen Currie said. "Is this a short term drop in demand in response to higher prices and limited availability of supplies, and therefore that demand may come back by the fourth quarter or in the 2027?", she said. "It's that duration question that we're really grappling with." Long term impacts of the crisis could prompt OECD countries to significantly increase their minimum emergency oil inventory requirements, trading house Gunvor global head of research and analysis Frederic Lasserre said. The crisis also could prompt a renewed push toward energy transition, "particularly electrification", but policy decisions cannot be delayed, he said. "We have 25 years to get to 2050, and that's only one investment cycle. So we have to decide now what we do, because it's either refineries or nuclear power plants, not both." North America remains crude President Donald Trump's administration says it will stick to the course of prioritizing oil and gas development regardless of how the Mideast Gulf energy crisis evolves. Interior secretary Doug Burgum at the start of CERAWeek on 22 March touted an agreement with TotalEnergies to drop plans for offshore wind farms along the US east coast and invest in oil and natural gas production instead. The US, Canada and Mexico collectively account for 30pc of global oil output "... and we need to continue to grow that base here in North America, so that we're not as dependent on" the strait of Hormuz, industry group American Petroleum Institute president Mike Sommers said on Tuesday. Russia's war in Ukraine and the subsequent reorientation of Russian oil and gas flows in 2022 already prompted policymakers globally to try to square the issue of energy security, affordability and sustainability. The current crisis is likely to prompt similar discussions but outcomes once again are not guaranteed, Ramsay said. "To suffer a major energy supply shock once might be regarded as misfortune; to suffer a major energy shock twice begins to look like carelessness," he said, paraphrasing Oscar Wilde's The Importance of Being Earnest . "This kind of shock, the second one in four years to energy supply, is going to have major implications for our retirement system, and it's going to have implications for the oil market," Ramsay said. "This is not going to go away (if) the conflict ends today." By Haik Gugarats Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.
Adapting the global approach to climate change
Adapting the global approach to climate change
Washington's withdrawal sets back multilateral policy but economic impetus for cleaner energy remains, writes Georgia Gratton London, 30 January (Argus) — The world's approach to "climate multilateralism" must evolve in response to "geopolitical tensions", Brazilian diplomat and president of the UN Cop 30 climate summit Andre Correa do Lago said this week. Correa do Lago remains Cop president until he formally hands over the title in November to Turkish climate minister Murat Kurum at Cop 31. Cop 30 "shed light on the limitations of climate multilateralism and of formal consensus decision-making", Correa do Lago said, and "to keep pace with global warming, multilateralism must learn to operate at more than one institutional speed". He suggests a "two-tier" approach. The first tier should be based on the key tenet of climate talks such as Cops — consensus — while the second should focus on implementation, including through "coalitions of the willing", he said. Almost every country in the world is signed up to UN climate bodies the UNFCCC and IPCC, and the Paris climate accord. His call came in the same week that the US' second exit from the Paris agreement took effect, while President Donald Trump has also said the country will leave the UNFCCC and IPCC . But this would not preclude US businesses, states and cities from acting on climate change, the Brazilian Cop 30 presidency suggested this week. "We will be able to work with the other entities in the US," Cop 30 chief executive Ana Toni said. And Correa do Lago's vision echoed views from business leaders and governments that were put forward at the World Economic Forum (WEF) earlier this month in Davos, Switzerland. Most acknowledged a recent slowdown in effective climate policy, centred on the US volte-face, although the majority were sanguine on the "implementation" aspect — the progress of the global energy transition. India's new and renewable energy minister, Pralhad Venkatesh Joshi, cited "the unstoppable march of renewables". Chinese vice-premier He Lifeng pointed out that his nation "has put in place the world's largest renewable energy system", and firmly reiterated China's support for climate action. "I see a climate policy recession, but not a recession in the energy transition," former US vice-president Al Gore said in Davos. "The advantages of renewable energy have become so obvious everywhere around the world," he added. Shutting out the noise Danish biotechnology company Novonesis chief executive Ester Baiget spoke in Davos about "decoupling noise from facts" — looking past a rhetoric that rails against climate change action and instead at data showing that a global energy transition is well under way. Global renewable power capacity additions grew by 22pc to almost 685GW in 2024 — a record high for both additions and installed capacity — energy watchdog the IEA said in October . Renewable power capacity is forecast to grow by 4.6TW by 2030 — double the deployment in 2019-24 — driven by solar installations, the agency found. Much of the transition is being driven by plummeting costs for renewables. "We are so far down the road that the economics have taken over… the cost of a lot of the technologies has come down so much that it is simply economic sense to keep investing," director of clean power at the UK's energy ministry, Ben Golding, told UK lawmakers this month. Future costs are another factor, Davos speakers agreed. "I'm absolutely convinced that it will cost to be an emitter," either through taxes, purchasing emissions certificates or "paying for the cost of climate change", Swedish utility Vattenfall's chief executive, Anna Borg, said. Keeping focus further ahead is key, Cop 30 chief executive Toni said this week. "We know elections are short term, climate change will unfortunately be with us long term." Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.
EV flip-flopping has hampered the west: WEF
EV flip-flopping has hampered the west: WEF
London, 21 January (Argus) — Inconsistent policies and political turmoil have hampered western progress on electric vehicles (EVs), while China's longer-term stable approach has benefited industry winners such as BYD, speakers at a World Economic Forum (WEF) panel in Davos, Switzerland, said on Tuesday. China's lead in EVs is less about a single technological breakthrough and more about policy consistency. That was the clear message from executives and policymakers at the WEF panel on the global EV race, where China's long-term industrial alignment was repeatedly contrasted with stop-start policymaking in the US and Europe. Speaking early in the discussion, BYD executive vice-president Stella Li said China's EV successes "start from the government policy", arguing that Beijing's approach has been defined by consistency rather than constant revision. "In the past 20 years they never changed, but some countries went back and forth, and this will confuse manufacturing," Li said. "Once the government gives a very clear line, then manufacturing goes to work on the competition." This clarity, she argued, allowed companies to commit capital, concentrate on research and development and scale production without hedging against political reversals, something she suggested remains a structural disadvantage for western automakers. Industrial reality versus political instability Michigan governor Gretchen Whitmer, whose state accounts for more than a fifth of US car production, echoed this assessment from a US perspective, saying policy uncertainty has slowed decision-making across the industry. "The back and forth policies at the national level have made it more difficult for industry to throw all in," Whitmer said, adding that long-term investments were increasingly being delayed. "Chaos is really bad for business." The result, she added, is that manufacturers are forced to pursue multiple drivetrain strategies simultaneously, rather than committing fully to electrification. Former General Motors chief economist Elaine Buckberg said that a disconnect between political timeframes and industrial reality is critical. Automakers, she noted, plan vehicles years in advance, while democracy can change government policy over smaller time periods. "The typical planning process is five years before a vehicle comes into market, and you're planning to keep it there for six years," Buckberg said. "Keeping those incentives stable is really powerful." Alternatively, shifting incentives and short-term subsidies can distort demand. Li warned that poorly designed support schemes risk delaying purchases altogether. "Sometimes subsidies are more like a drug," she said. "Consumers just wait and the market stops. That is not sustainable." As competition between the US, China and Europe intensifies, the panel's message was that in the EV race, consistency may matter more than speed. By Thomas Kavanagh Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.
Fossil fuels shift talks to continue outside Cop
Fossil fuels shift talks to continue outside Cop
Developed countries struggled to lead, and oil producers pushed back, but a roadmap may emerge away from Cop, write Caroline Varin and Georgia Gratton Edinburgh, 28 November (Argus) — The UN climate Cop 30 summit in Belem, Brazil, ended last week without an agreement to establish a roadmap on how to shift away from fossil fuels that some countries had hoped to see, but the discussion will not stop there. Just over 80 countries , including EU member states, the UK, Australia, countries in Latin America and Africa, and island states had pushed for the overarching Cop 30 text to address the transition away from fossil fuels, the largest contributor to climate change, but language on a roadmap did not make the final decision. Opposition from major oil-producing countries proved too strong to push the roadmap through, European ministers said. Parties instead agreed on the launch of a "global implementation accelerator (GIA)", and the "Belem Mission to 1.5". These voluntary initiatives are aimed at "enabling ambition and implementation" of countries' climate plans and at keeping the Paris Agreement's 1.5°C temperature rise limit within reach. This refers to the more ambitious goal of the Paris accord — to hold the global rise in temperature to less than 2°C above pre-industrial levels, and preferably to 1.5°C. "Although text addressing the response [to a lack of climate ambition] was watered down, there are hooks to build on within the GIA and the Belem Mission to 1.5°C," environmental think-tank E3G said. By the end of the summit, 119 countries — accounting for 74pc of global emissions — had submitted new commitments in nationally determined contributions (NDCs), non-profit group WRI noted. But these plans, if delivered, only account for 15pc of the emissions cut required by 2035 to limit the rise to 1.5°C. As a consolation prize, the Brazilian Cop 30 presidency pledged to deliver roadmaps on the transition away from fossil fuel and on halting and reversing deforestation. This echoed Cop 29's outcome, when a roadmap was promised, for scaling up climate finance to $1.3 trillion/yr by 2025 for developing countries that were left disappointed. The roadmaps "will be led by science and they will be inclusive", summit president Andre Correa do Lago said. Brazil holds the presidency until Cop 31 in Turkey next year. In the interim, the country plans to convene high-level talks with key international organisations, fossil fuel-producing and consuming countries, workers and civil society, do Lago said. He also noted that the presidency would "benefit from the first international conference for the phase-out of fossil fuels", to he held in Colombia in April. Having the roadmap in the Cop 30 text would have sent a much stronger signal, as "the main text is an obligation for all", EU climate commissioner Wopke Hoekstra said as the summit closed. But the presidency's work on a roadmap, high-level dialogues and the event in Colombia will create further milestones for climate discussions on the transition from fossil fuels, observers said. The presidency's roadmap could create momentum for the start of a plan on fossil fuels from willing countries, even though it sits outside official Cop negotiations. Fault lines The pushback from major oil and gas producers on cutting emissions by reducing fossil fuel use — evident at Cop 29 last year — grew firmer in Belem, and shows no sign of abating. The achievement at Cop 30 was not to renege on the Cop 28 consensus, French climate minister Monique Barbut said. Almost 200 countries pledged at Cop 28 in Dubai in 2023 to transition away from fossil fuels "in a just, orderly and equitable manner… so as to achieve net zero by 2050 in keeping with the science". The Cop 28 outcome also called for renewable energy capacity to triple and energy efficiency to double by 2030 and for "accelerating efforts towards the phase-down of unabated coal power". The main Cop 30 text does not mention the transition away from fossil fuels, and only makes two references to the Cop 28 deal — dubbed "the UAE consensus". Even pointing to the energy package within the Dubai deal agreed two years ago proved too much for some oil-producing countries. "The [UN climate body] UNFCCC's consensus-based process, as well as the lack of a concrete proposal to create the framework for developing countries to phase out fossil fuels, hindered the adoption of a roadmap in the Cop cover decision text," the Fossil Fuel Treaty Initiative said. The final day of Cop 30 — which ran more than 24 hours over time — saw decisions swiftly adopted. But Colombia spoke out against one, objecting that it included no language on the transition away from fossil fuels. "We are demanding the minimum necessary," Colombia's representative said, to "allow language already agreed under [Cop 28] consensus to be discussed here". Confounding the consensus Correa do Lago suspended the plenary while the Cop 30 presidency sought a solution. Decisions adopted at Cop summits cannot be revoked. But Correa do Lago said countries will be able to discuss issues in June next year in Bonn, Germany, at interim climate talks hosted annually by the UNFCCC. Colombia's intervention prompted pushback from Saudi Arabia and a furious response from Russia. The latter told countries objecting to "refrain from behaving like children". India's representative said reopening discussions would be "fundamentally unfair" and "inconsistent" with UNFCCC process. Russia, India and Saudi Arabia throughout the summit opposed the addition of wording on fossil fuels, according to Barbut. Saudi Arabia reiterated throughout Cop 30 that the focus should be on reducing emissions, not on specific fuels. And the climate-sceptic stance taken by US president Donald Trump's administration emboldened major oil-producing countries to stand their ground more firmly this year, many negotiators and observers said. Developed nations were not forceful, at least in the first week of the negotiations, in their support for a roadmap to shift away from fossil fuels. The EU called it a "difficult topic" and was caught in controversial domestic discussions on its own targets and environmental ambitions before heading to the summit, which may have weakened its claims to leadership. Australia, which will preside over Cop 31 negotiations in Turkey next year, at first could not see a space for discussing the roadmap in Belem. And even though over 80 countries had thrown their weight behind the topic by the midpoint of the summit, details on what it would look like were lacking. China, the world's largest greenhouse gas emitter, remained largely quiet on the topic outside negotiating rooms, redirecting attention towards renewable energy — a huge market for the country. Discussions on the transition away from fossil fuels were not expected to take centre stage at Cop , until Brazilian president Luiz Inacio Lula da Silva called for this during the leaders' summit that preceded the talks. Leadership came from developing nations, notably Colombia. And there has been an eye-catching change at this Cop in how some developing countries are reframing rhetoric around fossil fuels and economic development. Some, including those with oil projects such as Kenya and Sierra Leone, are increasingly pushing for plans to shift away from fossil fuels — in a just, equitable and orderly manner — and highlight the importance of drastically increasing energy access through the transition. A Cop 30 decision addressing "the just energy transition" was broadly well-received. The text drew links between cutting emissions and ensuring climate resilience and positive economic development. Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.
Country focus
No clear timeline for Brazil fossil fuel phase out
No clear timeline for Brazil fossil fuel phase out
Santa Marta, 28 April (Argus) — Brazil has no set timeline to publish its roadmap to phase out fossil fuels, the environment ministry's secretary for climate change Aloisio de Melo told Argus . Brazilian president Luiz Inacio Lula da Silva on 8 December asked the energy, environment and finance ministries to draft a resolution by February mapping out the phase-out of fossil fuels. That had followed Lula's previous calls to create an international plan to move away from fossil fuels during a leaders' summit only a few days before the UN Cop 30 climate summit held in November in Brazil. But the call did not make it to the summit's final decision despite backing´ from over 80 countries . Instead, the Cop 30 presidency pledged to create a roadmap on the issue outside of official negotiations. But the Brazilian ministries never published the resolution requested by Lula. Instead, the plan has been submitted to the national energy policy council, which will be responsible for developing it, de Melo said in the sidelines of the First Conference on the Transitioning Away from Fossil Fuels , being held in Santa Marta, Colombia, from 24-29 April. The process to draft Brazil's roadmap has many moving parts and will "involve a lot of dialogue", de Melo said. "It's a process and we're not simplifying the approach," he said. "It's not just a matter of having big long-term goals, but of having a real trajectory with clear milestones, instruments, means and so on," which is "much more complex", he he said. One of the discussions surrounding the roadmap is its timeline, de Melo said, adding that the process "will take quite a bit of time" because it needs to have "a strong, solid institutional base that truly integrates with Brazil's energy planning". "It's not about having a document with some grand speeches and messages, but something that is actually consistent, solid and guiding over time and that transcends presidential administrations", he said. Phasing out fossil fuels could run counter to Brazil's plans of increasing crude production. It produces around 4mn b/d of crude , making it one of the 10 largest producers globally, according to its hydrocarbon regulator ANP. The country plans to expand crude output to 5.3mn b/d by 2030, according to energy research bureau Epe, hinging on new exploratory frontiers such as the southern Pelotas basin and the environmentally sensitive equatorial margin. But the production goals and the roadmap can coexist, de Melo said. The plan will focus on some decarbonization solutions that are "more or less ready and actionable" such as biofuels, he said. "But there are other solutions that are in the development and finalization phase." Additionally, Brazil's planned production growth will not take place in the short term, he said. So there is time to see how fossil fuels, mainly for transportation, will be used in a cleaner energy matrix over time. By Lucas Parolin Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.
Washington still aiming for 2027 GHG market link
Washington still aiming for 2027 GHG market link
Houston, 22 April (Argus) — Washington state is still eyeing 2027 for when it could join the Western Climate Initiative (WCI) carbon market, despite numerous regulatory and political hurdles, the state's Department of Ecology said on Wednesday. Ecology estimates its cap-and-invest program could join the WCI before the state's 1 November 2027 deadline for regulated participants to cover their outstanding emissions for 2023-26, the agency said at a public hearing on the recent draft linkage agreement . Current WCI partners California and Quebec are working to amend their respective program regulations this year. Both have indicated they prefer to finish their work first before fully turning their attention to linkage with Washington. But that does not mean that regulators from California, Quebec and Washington are not also advancing their required steps for linkage in parallel to any regulatory changes. "We expect we could complete the linkage agreement in 2026 and link in 2027, and this is including discussions with California and Quebec," Ecology senior planner for linkage Stephanie Potts said. Quebec's link with the California cap-and-trade program took more than a year to finalize, after work started in 2014, while the process with former WCI member Ontario took just months before it joined at the start of 2018. Ecology must also finish its current rulemaking to align the state's program with the WCI, with a final proposal expected in spring and adoption in summer. The agency must also finalize the required environmental justice assessment (EJA), Climate Commitment Act linkage criteria findings and then formally decide to link. California and Quebec will also need to amend their regulations to accept Washington Carbon Allowances (WCAs). California also requires a linkage report and findings from the governor's office to evaluate the stringency of Washington's cap-and-invest program. One new area of consideration is the shared electricity market between Washington and California. Both states need to align their coverage for electric power entities and their greenhouse gas (GHG) emissions, ensuring neither has an advantage over the other, Potts said. Washington is working on regulations for imported electricity in its program as part of its linkage-related rulemaking. Quebec remains a point of uncertainty in the process. The province's environment ministry again delayed publishing its draft amendments earlier this month, while the new premier, Christine Frechette of Coalition Avenir Quebec (CAQ), forms her government. Quebec is also holding a general election on 5 October, which looks likely to change political leadership in the province. A Leger-Quebecor poll of roughly 1,000 eligible voters over 17-20 April shows Parti Quebecois at 31pc of support, with CAQ trailing in third place at 17pc. California will also hold its election on 3 November to replace governor Gavin Newsom (D), who is ending his final term this year. "Changes in government have not inhibited staff from continuing to work together on this process, to share information and move the process forward," Potts said. Ecology will hold another public hearing on its draft linkage agreement on 22 April and is accepting public comment through 6 May. By Denise Cathey Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.
Brazil climate plan cites risks to grid, fuels
Brazil climate plan cites risks to grid, fuels
Sao Paulo, 2 April (Argus) — Brazil's long-delayed climate plan issued in March highlighted how extreme weather stemming from climate change could hurt its power grid and biofuels production, setting it back in achieving climate targets. The plan is Brazil's first comprehensive roadmap for meeting its nationally determined contribution (NDC) under the Paris agreement, with a goal of reducing greenhouse gas emissions by 59-67pc by 2035, from 2005 levels. Reaction to the plan from environmentalists was mixed. Amazon environmental research institute IPAM hailed the plan as a "reflection of Brazil commitment to mitigating climate change" and to "positioning the country as a global supplier of low-carbon products". But Brazilian climate think tank Observatorio do Clima called the plan unambitious and argued that it "caters to agribusiness". It also criticized the plan for failing to mention the phase out of fossil fuels. The plan underscores rising risks to the power sector owing to climate change, focusing on the impact that extreme weather is already having on generation, distribution and transmission. These threats include increased frequency and duration of droughts, more extreme rainfall, catastrophic wind events and more numerous heat waves. Drought is a top risk in the plan, owing to Brazil's continued dependence on hydroelectricity for its power supply. Even with the expansion of solar and wind generation, hydroelectricity met over 62pc of Brazil's power demand in 2025, according to the electricity sector clearinghouse CCEE. A recent study from the mines and energy ministry demonstrated that average water levels for hydroelectric reservoirs have declined sharply in the past decade: The 10-year moving average from 2023-2012 was 68pc, while the average from 2013–2022 fell to just 41pc of maximum capacity. The proposal seeks to expand and modernize existing hydroelectric plants to improve energy efficiency and increase installed capacity, with the goal of expanding installed capacity by 6.3GW by 2025. The plan also calls on the government to update electricity regulations to expand the use of energy storage batteries and pumped hydro plants. Reinforcing the grid The plan also foresees growing risks to the power transmission sector, which has suffered an increased number of outages because of extreme weather events, including flooding, high winds and fires. Record flooding in Rio Grande do Sul state in 2024, which resulted in extended power outages for more than 1mn people, forced the government to reassess its power transmission expansion plans for the state to increase resilience of infrastructure. The plan warned that transmission infrastructure is not designed to withstand extreme weather events and that poor engineering projects, combined with limited preventive maintenance, has increased the vulnerability of the grid. The plan includes the addition of more than 30,000km (18,640 miles) of transmission lines by 2035 and suggested that the new infrastructure be assessed to minimize the risk of weather. The plan also calls on the government to include new technologies for grid stabilization, such as reactive power support to control voltage, secondary frequency control to balance supply and demand, and self-restoration mechanisms that help restore power quickly after power outages. The plan also examines potential risks for the supply of biofuels, which play a central role in the decarbonization of Brazil's transport sector under the NDC. The plan calls for mandatory ethanol and biodiesel blends of 30pc and 20pc respectively in 2030, rising to 35pc and 25pc by 2035. To guarantee adequate supply, the plan calls on the government to promote research for the biofuels sector, focusing on the development and improvement of new crop varieties and diversification of feedstocks to produce biofuels. This includes crops that can grow in different regions and that are more resilient to climate change. It also calls on the government to promote irrigation in areas prone to drought, in an effort to limit its impact on production of sugarcane and other biofuel feedstock crops. Brazilian power generation by source % Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.
Germany may need coal-fired power plants longer: Merz
Germany may need coal-fired power plants longer: Merz
London, 30 March (Argus) — Germany may need to keep "existing" coal-fired plants connected to the power grid "longer" than currently planned, should the energy crisis continue and there is a shortage of electricity, chancellor Friedrich Merz said at a conference. Merz is "not ready" to risk the core of German industry for existing phase-out targets should they "become unrealistic", he said at the Frankfurter Allgemeine Zeitung Kongress. Germany plans to fully phase out coal and lignite-fired generation by 2038 through its coal-fired power generation termination act, under which the country's coal and lignite-fired capacity will fall incrementally each year. The federal state of North Rhine-Westphalia is already aiming to phase out coal and lignite by 2030. And while Merz did not explicitly mention any changes to these targets, he stressed the importance in ensuring security of power supply. He also emphasised the importance in building new gas-fired plants swiftly under the country's power plant strategy. The new plants will be built at pre-existing thermal plant locations and be connected to existing grid infrastructure. They will not need to be hydrogen-ready straight away, he said. Merz also cited nuclear fusion, as well as small modular reactors (SMRs), as potential technologies for future power generation. The government has the "ambition to connect the world's first large fusion power plant to the grid in Germany", Merz said, stating that Germany is relatively "far along" and "quite good" in fusion technology. And Merz expressed interest in further researching SMRs, and would be prepared to work together with other European countries in developing these, although he said this would be for the "longer term". By John Horstmann Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.