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In ESG

Germany: Climate Protection Contracts — An interim assessment

by and 7 Mins Read

With the Climate Protection Contracts (Klimaschutzverträge) program (also known as Carbon Contracts for Difference program), Germany has been relying on an innovative instrument to ensure (climate-neutral) competitiveness since 2023. Following the largely positive reception of the first bidding round and the European Commission’s approval under state aid law on 24 March 2025, the course is now set for the implementation of the second bidding round. According to the latest reports, the new federal government also seems to want to give the final green light for the continuation of the program.

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In ESG

Germany: Circularity Made in Germany – The national circular economy strategy has been adopted

by , and 7 Mins Read

On 4 December 2024, the Federal Cabinet adopted the comprehensive German National Circular Economy Strategy (NCES). The NCES bundles all of Germany’s goals and measures on the path to a holistic circular economy with the “Circularity Made in Germany” seal. The implementation of the NCES includes the following: The establishment of a circular economy platform involving all stakeholders; the development of a Roadmap 2030 to concretize the goals and measures formulated in the NCES; the establishment of a monitoring and evaluation system as well as resolutions on financing. The initiative offers numerous opportunities for companies to make their business models and production processes more sustainable.

In ESG

Germany: Incompatibility of the self-consumption facility exemption with EU law

by and 7 Mins Read

With its preliminary ruling of 28 November 2024, the European Court of Justice (ECJ) has set clear limits to Germany’s special approach of exempting self-consumption facilities (Kundenanlagen) from grid regulation. Self-consumption facilities not only comprise facilities generating energy for self-consumption, but also facilities for supplying energy to adjacent customers without using the public grid. The ECJ’s reasoning is likely to have general consequences for decentralized supply concepts (at least for the supply of third parties other than the operator of the generating installation), e.g., in commercial and industrial parks.

In Tax

Germany: New tax audit focus – Application of Royalty Barrier Rule to Foreign-Derived Intangible Income (FDII)

by , and 5 Mins Read

Does your group have a German subsidiary or a German branch that pays royalties to a related party abroad under an intra-group license agreement? If so, a recent development in the German tax landscape could significantly affect you: The German Royalty Barrier Rule (RBR, Section 4j of the German Income Tax Act, (ITA)) is increasingly becoming relevant in German tax audits. Importantly, the German Tax Authorities (GTA) recently began expanding their scrutiny beyond traditional Patent/IP Box regimes.

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In Anti-Corruption

Germany: Illegal lobbying – New criminal offense to combat corruption

by , and 7 Mins Read

In Germany, a new criminal offense of improper lobbying came into force on 18 June 2024. Its impact on the lobbying activities of companies may not be underestimated. Amongst others, the practice of paid lobbying at ministries or other public bodies by mandate holders is now subject to criminal prosecution. It will hence be vital for companies to critically review lecture and consultancy fees for mandate holders as well as remuneration for supervisory board positions and managing director activities for their appropriateness with immediate effect.

In Corporate Compliance

Succeed in M&A in times of heightened regulatory scrutiny

by and 2 Mins Read

After a period of slowdown due to increased interest rates and macroeconomic uncertainty, the second half of 2024 is poised for a strong resurgence in M&A activities. Staying up to date on the latest market trends and legal developments is critical. In this article, our Baker McKenzie lawyers share guidance on these anticipated regulatory challenges and their impact on M&A transactions, and provide direction for transaction parties on how to navigate such challenges successfully

In ESG

Germany: Draft law published to align German battery law with the EU Battery Regulation

by and 7 Mins Read

Since 18 February 2024, most parts of Regulation (EU) 2023/1542 concerning batteries and waste batteries (“Batteries Regulation”) apply in all EU Member States. The new Regulation repeals and replaces the existing Batteries Directive (2006/66/EC) and seeks to make all batteries placed on the EU market more durable, safe, sustainable, and efficient. It significantly expands the extended producer responsibility (EPR) regime created by the existing Directive by introducing more detailed mandatory design, content and conformity assessment requirements aimed at ensuring the sustainability and circularity of batteries.

In ESG

Germany: Energy storage strategy — more flexibility and stability

by , and 8 Mins Read

On 8 December 2023, the Federal Ministry for Economic Affairs and Climate Action (BMWK) presented its energy storage strategy. The strategy paper provides an overview of the measures and challenges involved in establishing energy storage systems. The energy storage strategy aims to promote the expansion and integration of energy storage systems and thus support the energy transition.

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