["Natural Resources Forum, EarlyView. ", "\nABSTRACT\nThis study examines the determinants of environmental efficiency in Germany between 1990 and 2022, focusing on labor productivity, green R&D productivity, fossil fuel inefficiency, and energy efficiency R&D expenditures. Using the Inverse Load Capacity Factor per unit of GDP as an indicator of environmental efficiency, the analysis utilizes time series techniques, including ADF and Fourier ADF tests, which confirm the first‐difference stationarity of all variables. Cointegration relationships are identified using Fourier Engle‐Granger and Fourier ADL tests, while FMOLS and CCR estimators assess the magnitude and direction of effects, with DOLS results validating robustness. Key findings reveal that increased labor efficiency enhances environmental performance by reducing resource intensity and optimizing productivity. Similarly, green R&D efficiency improves environmental outcomes by driving renewable energy adoption and innovation. However, fossil energy inefficiency negatively impacts environmental efficiency, highlighting the misalignment in energy policies and the persistent reliance on carbon‐intensive energy sources. Energy R&D expenditures also contribute significantly to environmental efficiency by fostering technological advancements in energy optimization. These findings suggest that Germany's sustainable development goals and growth strategies should be revised to take into account environmental targets, global warming and the prevention of environmental pollution. By integrating advanced econometric approaches and exploring under‐researched variables, this study provides critical insights into Germany's environmental efficiency and its broader implications for sustainable growth.\n"]