Heavy industry needs support for transition to climate neutrality - opinion

Politicians must urgently implement EU-wide mechanisms that help Germany’s heavy industry to continue to be successful while transitioning to greenhouse gas neutrality, says Klaus Stratmann in Handelsblatt. Companies in key German sectors such as steel, chemical and metal have for years invested less than they write off and now face a tough future in light of stricter CO2 limits, he writes. But existing mechanisms such as the free allocation of certificates in the European Emissions Trading System (ETS) are not enough to support them, he adds. Instead, Stratmann suggests politicians should consider such mechanisms as a CO2 border tax and so-called Carbon Contracts for Difference, in which climate-friendly technologies are rewarded by governments. New processes that are essentially based on the use of climate-neutral hydrogen should be a particular target, he says. Only EU-wide cooperation can achieve such goals, he concludes.

Heavy industries, which are a key contributor to Germany’s economy, have proved a drag on the country’s ambitious energy transition plans. They are heavily power dependent and cannot simply replace fossil-fuel power with renewables to lower their emissions. Instead, entirely new processes must be developed. This carries huge costs, which companies say necessitate government support. Ministers are currently drawing up plans to assist the development of low-emission technologies.