Germany needs €860 billion investment in industry to reach climate goals, lobby group tells next govt

The new German government should enable the investment of about 860 billion euros until 2030 to initiate emission reduction activities across all sectors of the economy, the influential lobby group Association of German Industries (BDI) has said. “The pressure on policymakers to achieve climate neutrality by 2045 while preserving a competitive industry is immense,” said BDI president Siegfried Russwurm. Ahead of its industry “climate day,” the association released a five-point-plan for the prospective new government coalition of the Social Democrats (SPD), the Green Party and the pro-business Free Democrats (FDP). “The German industry expects the next government to swiftly decide on a reliable framework how to strengthen Germany as a country for export, industry and innovation,” he added. The central element of the “investment turbo” approaching nearly a trillion euros over less than ten years should be a retrofitting and upgrading of the country’s infrastructure “that goes far beyond what has been planned so far,” the association said. The BDI further advocated cost reductions for “CO2-neutral energy” and grants to energy-intensive industries to make climate-friendly investments. Moreover, the fast expansion of renewable power sources should be supplemented by building new gas-fired power plants that can eventually operate fully on renewables-based green hydrogen. “For the duration of that transition, the government should support the inclusion of natural gas in the EU taxonomy on sustainable investments,” the group argued. The BDI said current sector emission targets amount to “micro-management by the state” that leads to inefficient ad hoc measures. “We cannot afford that,” the industry group said.

The so-called “traffic light coalition,” based on the party colours of the SPD, the Greens and the FDP, could make a major step forward this week, when the three parties present a joint coalition treaty as planned. The coalition likely to follow Angela Merkel's conservative government will be headed by current finance minister Olaf Scholz from the SPD and will be under immediate pressure to deliver on a comprehensive climate policy package, a key voter concern and commonly accepted as a prerequisite for retaining Germany’s economic competitiveness.