Where Germany's Greens and FDP will collide on environment

The Greens and the FDP disagree on major political issues. While they both support the climate battle, their ways of ushering change are vastly different: the Greens advocate tougher environmental laws and regulations, and the FDP calls for market-based solutions.

Yet, if the coalition forces can both make concessions on how to finance the new climate policies, Germany could enter a much greener post-Merkel era.

For decades, Germany's addiction to fossil fuels has divided the country's political landscape. But now with the Greens in power, the new government could finally succeed in what Angela Merkel never could and curb the polluting industries.

Thus far, the Greens have delivered: the new coalition deal puts climate change at the heart of German politics and includes climate targets previously unreachable for Merkel's government.

Merkel may have been given the 'climate chancellor' nickname but as a former environment minister herself, her mixed climate legacy has left many wondering whether she lived up to this title – Germany's over-reliance on fossil fuels being one of her blind spots.

Merkel may have been successful pushing the climate agenda on the global stage but at home, she was confronted with competing demands from influential car and coal industries and criticised for her close relationship with the German car sector.

But the winds of change have begun to blow.

The coalition agreement includes the pledge to transition to 80 percent of renewable energy by 2030 – up from roughly 40 percent today. This will be a challenge for Germany that has for years struggled to shift to green energy, falling behind other European nations with the take up for renewables.

The agreement also includes "ideally" speeding up Germany's coal phase-out from 2038 to 2030 – notably accelerating the transition from fossil fuels to renewable energy. Moreover, the three-way coalition aims to have at least 15 million electric vehicles on German roads by the end of the decade.

That said, Germans themselves are rather hesitant about this: a survey conducted in 22 countries shows that the German public is the most sceptical about the viability of electric cars.

Car manufacturers and political leaders have also been faced with unions which fear the electrification of the sector could lead to the loss of tens of thousands of jobs.

The importance of this debate should not be underestimated: the German transport sector is the only industry that has not achieved greenhouse-gas reductions since the 1990s. Here renewables like biofuels could ease the transition.

Southeast Asia provides a potential alternative. In Malaysia, the national MSPO palm oil sustainability scheme has reduced deforestation steadily for four years in a row with around 93 percent of the country's palm oil certified sustainable.

Biofuels could curb the over-reliance on fossil fuels – especially since governments' plans to phase out fossil fuels are nowhere near to meet the Paris Agreement targets, according to an UN report.

Greens vs 'car-loving men'

Yet, the pro-business FDP may slow down the decarbonisation of the German transport sector. Traditionally, they have been seen as a party of car-loving men. They are strong opponents of speed limits on highways and unlikely to introduce many government targets on the car sector.

The car industry, a core part of the new climate agenda, could be an insurmountable obstacle for the Greens. While the Greens aim to protect the environment from polluting industries, the FDP is essentially hoping to liberate these industries from stringent regulations.

The Greens may have lost the country's most powerful office to the FDP's Christian Lindner, the new finance minister – arguably the most influential role apart from the chancellor.

Yet, both the Greens' co-leaders, Annalena Baerbock and Robert Habeck, got key ministries: Baerbock taking over the foreign ministry and Habeck leading the new climate and economy ministry.

This will likely signal a more hard-line approach to the execution of climate promises.

Germany being the largest economy in Europe, its government decisions will inevitably shape the continent's climate policies. Whether it will lead the European climate battle or not, will depend on how well the collisions between the two smaller coalition parties, the Greens and the FDP, are being resolved.