Vote25: Next government must use transport transition to shore up competitiveness – think tank
Clean Energy Wire: Where does Germany stand in the transition to a climate-neutral transport sector? What is the overall state of play?
Christian Hochfeld: In the transport sector, Germany is not on course to reach its climate targets - unlike the electricity sector, for example. For the past three years, the Federal Environment Agency (UBA) has noted that the transport sector is increasingly missing its targets. In 2023, there were excess emissions of around 13 million tonnes of CO2. If the German government does not take additional measures, the gap will grow to around 180 million tonnes cumulatively by 2030, according to official estimates. However, instead of introducing effective immediate steps, the German government has amended the climate action law so that there will be no consequences if the sector targets are not met. According to the law, the only thing that matters is that Germany meets its cross-sector climate target by 2030. This is risky and short-sighted. After all, the other sectors will not be able to make up for the shortfalls in the transport sector in the long term. Ultimately, the transport sector must also be climate-neutral by 2045. The longer politicians wait, the more difficult and expensive it will be. Germany, as an industry location, needs clear and reliable framework conditions from policymakers for a rapid transformation in order to maintain its competitiveness.
How does the traffic light coalition rate? What has it achieved? What are the biggest successes and failures?
The traffic light coalition has certainly had some successes with regard to the transport transition: for example, a reform of road traffic law that gives local authorities more freedom to set up bus lanes and cycle paths or to regulate speed; or the introduction of a CO2 component in the lorry toll and the opening up of the financing cycle so that the toll revenue can also be used to expand and maintain the railways. The nationwide flat rate public transport ticket (Deutschlandticket) has at least made access to public transport easier for many, although unfortunately it was not combined with an offensive to expand the range and improve the quality of public transport.
In view of the challenge of achieving climate neutrality in transport, however, this progress is only fragmentary. This is particularly evident in the ramp-up of electromobility and investments in sustainable modes of transport. Instead of accelerating the industrial transformation, there are discussions about slowing down; instead of expanding investments in the future and securing them for the long term, there is still a focus on austerity. At key points, the coalition lacked a common idea of how to achieve the climate targets. This led to blockades. In climate policy, transport took a back seat; in transport policy, climate protection took a back seat. The dramatic change in the geopolitical situation since March 2022 is only part of the reason. It could also have been used as an opportunity to campaign even more strongly in favour of the already necessary phase-out of oil and gas, the switch to renewable energies, and the industrial transformation.
What does the next government need to do to get the sector on track - especially regarding the 2030 goals? Where does it need to prioritise?
The priorities for the next government arise from the deficits in climate policy in the transport sector, which are evident at the end of the traffic light coalition. A coalition that wants to make Germany more economically successful and socially just should prioritise the transport transition. Much stands and falls with a financial reform that enables rapid and sufficient public investment in the long term, and ensures a reliable framework for private investment and planning that is orientated towards climate protection. For the competitiveness of industry, it is important to make decisive progress in the transformation to climate neutrality that has already begun. This is why a stronger integration of industrial and climate policy is needed at both European and national level in the coming years. By integrating electromobility into the electricity grids with the help of bidirectional charging, it is possible to reduce costs, accelerate the expansion of renewable electricity generation, and promote the ramp-up of e-cars. When it comes to the production of climate-neutral fuels such as e-fuels, the government needs to accelerate the market ramp-up and prioritise air and sea transport. Ultimately, the aim is to make affordable mobility easily accessible for everyone and thus ensure equal social participation in urban and rural areas. All of this will only be possible if the new government sees the transport transition not simply as a climate or transport project, but as a joint endeavour that brings great added value in terms of industrial and social policy.
What is the state of the German car industry? What needs to happen here to make the transition a success? Is it just the companies' responsibility or is it also down to the next government?
Everybody must play their part, the companies and the government. But politicians have a few particularly effective levers at their disposal to give the markets orientation and planning security. The guiding principle should be: only what promotes and accelerates the transformation to climate neutrality will benefit the competitiveness of German and European industry. This applies not least to the discussion about the European CO2 fleet limits. The problem for the European automotive industry is not primarily that politicians are setting excessively strict fleet limits. The challenges are the economic slowdown, the fundamental structural change, the intensifying competition in the transformation to electromobility, especially with China, and also the emerging lags in productivity and technology.
Instead of speculating about weakening the fleet limits, politicians should work on supplementing them: for example, with instruments for ramping up electromobility in commercial fleets; with economic incentives that make smaller electric cars in particular cheaper; with a reduction in the price of e-car electricity; and with a continued rapid expansion of the charging infrastructure. A bundle of instruments that reduces fossil fuel subsidies, and reflects the hidden costs of combustion engine vehicles, is particularly effective. At EU level, the German government can advocate for more investment in the battery value chain and the establishment of Chinese battery and vehicle manufacturers on the European market in accordance with common rules, as part of the preparations for the Clean Industrial Deal for the automotive industry.
