“Mittelstand” action programme to support German SMEs' climate efforts

With a new action programme containing financial incentives and support measures for its famed “Mittelstand” sector of small and medium-sized companies (SMEs), Germany plans to greatly accelerate the sector’s climate-friendly transformation. “We need massive investments in the decarbonisation of our economy to reach our climate targets,” Michael Kellner, state secretary in the economy and climate ministry (BMWK), said. He added that SMEs were central to the energy transition’s success. “Who if not Mittelstand companies will mount solar installations on rooftops, insulate buildings, install heat pumps or develop new ideas for recycling?,” Kellner asked, adding that SMEs must make efforts to make their production climate neutral. With the programme, the government aims to expand renewables, improve the energy transport infrastructure, attract skilled workers, fund investments, improve company reporting on sustainability and support circular economy concepts, among other things.

Small and medium-sized "Mittelstand" companies employ a large part of Germany’s workforce and have a higher share in economic productivity than in many other high-income economies. Many companies in the sector have voiced concerns that increasingly tight regulations of climate-related aspects could overburden them and cause disadvantages with respect to larger companies with greater administrative capacities.