BVerfG Climate Order 2021 and Its Legacy

What the BVerfG climate order decided

The BVerfG climate order of 24 March 2021 (1 BvR 2656/18, 1 BvR 288/20, 1 BvR 96/20, 1 BvR 78/20), published on 29 April 2021, held that parts of the Federal Climate Change Act (Bundes-Klimaschutzgesetz, KSG) of 2019 were incompatible with fundamental rights. The Act set emission reduction targets until 2030 but left the reduction pathway for the years after 2030 largely open. The Federal Constitutional Court found that this unilaterally shifted the burden of reducing greenhouse gas emissions onto the period after 2030, when much more drastic restrictions would be required, and thereby endangered practically every freedom protected by fundamental rights in the future.

The legislature was ordered to set out in greater detail, by 31 December 2022, how reduction targets would be adjusted for periods after 2030.

The BVerfG climate order is one of the most influential climate rulings worldwide. It introduced the idea that fundamental rights protect freedom across time, against reduction burdens being postponed to the future, and it recognised that the state objective of protecting the natural foundations of life in Article 20a of the Basic Law (Grundgesetz, GG) includes an obligation to take climate action aimed at achieving climate neutrality. For businesses in Germany, its legacy lies less in the order itself than in the legislative changes it triggered and in the legal argumentation it made available in permits, planning and litigation.

Background of the constitutional complaints

Several groups of complainants, mostly young people, some living in Bangladesh and Nepal, and supported by environmental organisations, challenged the KSG 2019. They argued that the targets, a reduction of 55% by 2030 compared with 1990, and the annual emission budgets until 2030 were insufficient to meet the Paris Agreement's temperature goal and violated the state's duties to protect life and health, property and a right to an ecological minimum standard of living. The KSG 2019 provided that the federal government would set further annual emission amounts for periods after 2030 by ordinance in 2025, without specifying the pathway.

The constitutional complaints were directed against the legislature's omission to adopt sufficient measures rather than against a specific act of enforcement. The two environmental associations that lodged complaints as "advocates of nature" were held to have no standing, because neither the Basic Law nor the constitutional procedural rules provide for such representative complaints on behalf of nature or the general public. Only the individual complainants could invoke their own fundamental rights, which is why the case turned on the freedom of individuals, including future restrictions on their freedom, rather than on environmental protection as such.

Core holdings of the BVerfG climate order

The Court found no violation of the state's duty to protect against the dangers of climate change as such, given the legislature's margin of appreciation, and it left open whether such duties also exist towards the complainants living abroad.

It did, however, find a violation of the complainants' fundamental rights as "intertemporal guarantees of freedom". Because nearly every human activity is still linked to greenhouse gas emissions, the more of the remaining emission budget is used up by 2030, the more severe the restrictions on freedom required afterwards. The legislature must therefore distribute reduction burdens over time proportionately and take precautionary steps to ensure a transition to climate neutrality that respects freedom.

The Court emphasised that Article 20a GG is a justiciable legal norm binding the legislature, that it includes the aim of limiting warming in line with the Paris Agreement, and that the legislature must take account of scientific findings, including estimates of the remaining national carbon budget. Because the KSG 2019 did not contain sufficient provisions for adjusting the reduction pathway after 2030, it did not meet those requirements.

The KSG reforms that followed

The legislature responded quickly and without waiting for the deadline. In summer 2021 it amended the KSG, raising the 2030 target and introducing new ones. Under § 3 KSG as currently in force, greenhouse gas emissions are to be reduced by at least 65% by 2030 and at least 88% by 2040 compared with 1990, and net greenhouse gas neutrality is to be achieved by 2045, with negative emissions after 2050. The Act also set annual reduction targets for the years 2031 to 2040.

A further amendment in 2024 changed the steering mechanism. Instead of focusing on annual targets for individual sectors such as energy, industry, transport and buildings, the KSG now relies on projections and an aggregated view of all sectors.

Under § 8 KSG, the federal government must adopt additional measures if projection data show, as determined by the independent Council of Experts on Climate Change in two consecutive years, that the cumulative emissions of all sectors from 2021 to 2030 will exceed the permitted total. Critics argue that this weakens accountability of individual ministries; supporters see more flexibility. New constitutional complaints have been lodged against the amended Act, so the debate about the BVerfG climate order's requirements continues.

The legacy in later climate cases

The BVerfG climate order inspired a wave of climate litigation in Germany and beyond. Constitutional complaints against state climate laws were, however, largely unsuccessful, as the Court did not accept that the federal states have their own binding emission budgets. Environmental associations have used administrative courts to enforce compliance with climate programmes under the KSG, and the Higher Administrative Court of Berlin-Brandenburg ordered the federal government in 2023 to adopt immediate programmes for sectors that missed their targets, a decision overtaken by the 2024 amendment.

At European level, the European Court of Human Rights held in its 2024 judgment in Verein KlimaSeniorinnen Schweiz v Switzerland that states have positive obligations to protect against climate change under the European Convention on Human Rights.

Civil climate litigation against companies has also drawn on the Court's reasoning, although German courts have so far dismissed claims seeking to oblige car manufacturers and energy companies to reduce emissions faster, holding that the legislature is primarily responsible for allocating reduction burdens. Our briefing on climate litigation against companies covers this area.

The carbon budget and the role of science

A distinctive feature of the BVerfG climate order is its reliance on the concept of a remaining carbon budget. Drawing on estimates by the German Advisory Council on the Environment, which derived a national budget from global budget figures published by the Intergovernmental Panel on Climate Change, the Court reasoned that the legislature must take such scientific findings into account when deciding how much may be emitted and when. The Court accepted that these estimates involve uncertainties and leave the legislature room for assessment, but it held that uncertainty does not justify inaction; where there is scientific uncertainty about irreversible environmental harm, the state has a special duty of care.

This reasoning has practical consequences beyond climate legislation. It strengthens the role of scientific advisory bodies, such as the Council of Experts on Climate Change established under the KSG, whose assessments now trigger legal consequences. It also encourages authorities and courts to rely on quantitative evidence when assessing the climate impact of projects and programmes, for example in environmental impact assessments or when weighing climate concerns in planning decisions. Companies submitting applications should therefore support climate-related statements with robust data, such as life-cycle emissions or alignment with recognised decarbonisation pathways.

Climate policy, funding and public finance

The constitutional mandate to act on climate change does not answer how climate measures are to be financed. That question came before the Federal Constitutional Court in 2023, when it declared void the reallocation of EUR 60 billion of unused pandemic credit authorisations to the Climate and Transformation Fund. That judgment showed that climate policy must respect the constitutional debt rules, even though the BVerfG climate order requires the state to act. Funding programmes for industrial decarbonisation, building renovation and hydrogen were affected and had to be restructured. Our note on the BVerfG budget ruling explains the consequences.

For businesses, the combination of the two decisions creates a clear but demanding environment. The direction of travel towards neutrality by 2045 is constitutionally anchored, while the availability of public money to support it depends on budget law and political priorities. Companies relying on subsidies should build legal protections, such as binding funding decisions and contractual commitments, into their investment planning, and should not assume that support will remain available on the same terms throughout a project's life, particularly where funding depends on special funds outside the core budget.

Relevance for businesses

For companies, the BVerfG climate order matters in three ways. First, it underpins a steadily tightening regulatory framework: emissions trading, building energy rules, transport policy and industrial policy all follow the KSG targets, which in turn reflect the constitutional mandate. Second, it shapes administrative practice: authorities must consider climate targets when granting permits, approving infrastructure or awarding funding, and decisions that ignore them are vulnerable to challenge. Third, it influences the legal climate for corporate climate litigation and for governance: boards must consider transition risks and the credibility of their decarbonisation plans, which links to sustainability reporting and directors' duties.

The order also contains a reminder about legal certainty. By requiring the legislature to plan the reduction pathway early, the Court aimed to give society and businesses time to adapt. Companies planning long-lived investments, such as plants, buildings and infrastructure, should therefore assume that the path to neutrality in 2045 will be enforced and design investments accordingly, rather than relying on political changes to relax targets.

How TRW & Co helps

We advise companies on the legal consequences of German climate policy, from permits and funding to emissions trading and corporate governance. We assess how the KSG and the BVerfG climate order affect projects, prepare submissions addressing climate requirements, defend companies in climate-related litigation and advise boards on transition planning and disclosure. Our work connects with our planning and environmental and sustainability reporting practices; see also our notes on climate protection targets and ESG and board duties. Please contact us to discuss your projects. This briefing is general information, not legal advice.