German industry needs climate policy support: Agora

Germany's industry is "desperately" waiting for the government to provide the necessary framework for large-scale investments in climate-neutral technologies, energy think-tank Agora Energiewende said today.

Agora — in co-operation with industry group Foundation 2° and consultancy Roland Berger, and following "intensive dialogue" with 17 industrial companies — suggested 12 "recommendations for action" for German policymakers to ensure that the country's industry can make climate-neutral investments without risking their competitiveness.

Agora addressed the incumbent federal government and the government to be formed following federal elections in September.

The incumbent government should ensure the revised Renewable Energy Directive is quickly implemented, as well as the pledged additional amendment to the renewable energies law (EEG) with higher renewable power capacity targets. While the new government should immediately launch a programme to further boost renewable power capacities, Agora says.

Contracts for difference should be available to industry by September 2023, along with special write-downs on efficiency and climate protection technologies, and financing instruments.

And by September 2025 — the end of the next parliamentary period — the government must have initiated changes such as the development of a hydrogen infrastructure and a circular economy.

Among the recommendations is strengthening the acceptance for carbon capture and storage technologies and promoting at European level the development of a CO2 infrastructure.

Targeted support should be provided for research and innovation and efficiency technologies in industry, while incentives and legislation should be used to boost demand for climate neutral products.

Germany's industry has resigned itself to a wait-and-see attitude regarding investments, Agora director Patrick Graichen warned. The industry knows that it can no longer invest in "classic" technologies such as a coal-fired blast furnaces in the steel industry, but cannot risk investing in climate-neutral technologies, for which there is no business case under the current framework.

"It is the job of politicians to create reliability and planning security for industrial companies so they can invest in climate-neutral technologies," Foundation 2° chairwoman Sabine Nallinger said.

The 17 companies involved in the dialogue include chemical firms BASF, Covestro and Bayer, steel firms Thyssenkrupp Steel Europe and Salzgitter, oil and gas firm BP Europe, and cement firm HeidelbergCement. All of the companies have initiated various projects aimed at reducing their carbon footprint.

By Chloe Jardine