German Greens aim for “climate pact” with heavy industry

Germany's Green Party is proposing a plan to make the country's energy-intensive industries like steel and cement more climate-friendly, using a comprehensive package of support payments and protection measures, newswire dpa reports in an article carried by Focus Online. "We offer German industry a 'climate pact'," the party's Katharina Dröge told dpa. "We want to create a political framework to make climate-neutral production competitive." In a position paper, the party proposes that the government enter into contracts with companies for climate-neutral production methods, including compensation for additional costs to make the shift economically viable. These "climate contracts" are to be financed with a "climate levy" on domestic and imported products. The party also advocates an EU carbon border adjustment mechanism, as proposed in the European Commission's new Green Deal. The paper also suggests using quotas to create markets for CO2-free products, for instance for green steel in the car industry.

In a commentary in business daily Handelsblatt, Klaus Stratmann calls the Greens' proposals "remarkable" and "credible." He says the party has showed it understands that a strong industry is the basis for a technological shift to climate neutrality. "But part of the truth is that a climate pact is no more than a pipe dream,” Stratmann writes. “So far, energy-intensive industries have had to chase after any help." Stratmann also warns that the EU Commission could view some of the proposed measures as illegal state aid.

To reach its mid-century target of climate neutrality, Germany will have to clean up its energy-intensive industries. But lowering emissions in sectors such as steel, cement and chemicals will require investments worth many billions of euros. Experts agree that state aid will be required to make the transition worthwhile for companies.