Using Crisis Management as a Catalyst for Climate-Neutral Transformation.
Shortly before the introduction of a German Federal Government stimulus programme, Foundation 2° has released a position paper based on a dialogue with leading German industrial companies.
The industrial sector is facing particularly large challenges in light of the economic impacts of the Corona pandemic. At the same time, it is one of the key stakeholders involved in reaching climate targets. In order to closely link the economic measures for addressing both the Corona and climate crises, Foundation 2° has developed a position paper on the basis of a dialogue process with industrial companies from the key energy-intensive steel, chemicals, cement, and non-ferrous metals sectors in Germany. The position paper provides policy instruments necessary to achieve the transformation of industry towards climate neutrality while strengthening innovative potential and competitiveness in the current difficult economic situation.
The companies involved in the dialogue process include, among others, Aurubis AG, BASF SE, Covestro AG, HeidelbergCement AG, Otto Fuchs KG, Salzgitter AG, Papier- und Kartonfabrik Varel GmbH & Co. KG, Siemens Energy, thyssenkrupp Steel Europe AG and Wacker Chemie AG.
“The industrial sector remains committed to ambitious climate targets and has put forward concrete proposals on how to achieve them,” says Sabine Nallinger, board member of Foundation 2°, speaking on the position paper. With it, industry sends a strong signal to policymakers. “We now need reliable solutions from policymakers to make the industrial sector crisis-proof and to support it in its transformation in pursuit of the climate targets.”
The position paper provides concrete proposals for a mix of instruments for a climate-neutral industrial sector. These include the creation of an investment programme for low carbon breakthrough technologies (LCBT) with key points such as an innovation and investment fund for LCBT and the introduction of instruments for minimising risk in large investment projects such as carbon contracts for difference.
The position paper calls for ambitious expansion targets for the production capacity of hydrogen and the introduction of a quota for hydrogen from renewable energy sources, as well as a simultaneous expansion of the necessary infrastructure, such as that needed for the transport of hydrogen.
In addition, the dialogue with the companies revealed industry’s need for lead markets for industrial products from low-carbon manufacturing and the corresponding manufacturing technologies. This entails the creation of incentives and regulatory instruments that generate demand for products from low-carbon manufacturing such as, for example, bonuses, quotas, or the definition of ambitious, climate-friendly specifications for public procurement.
Last but not least, the paper calls for the expansion of generating capacities and infrastructures for a sufficient supply of renewable energy at competitive prices and provides recommendations for the acceleration of the expansion of renewable energy generating capacity and of the power transmission grid.
This position paper is, following on the business statement issued by 68 companies and initiated by Foundation 2° – the largest, most comprehensive statement from businesses for ambitious climate action ever issued in Germany – a further important, substantive contribution by Foundation 2° and crystallises the demands for the design of a climate stimulus programme from the perspective of the industrial sector.
Dr. Daniel Vallentin, Senior Advisor
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