No Bullseye Germany will miss its 2020 climate goals, now sights turn to 2030

Germany won’t meet its CO2 emission goal in 2020. Instead of wallowing, the country’s environment minister is focusing on industry giants and its next target: a 55 percent reduction by 2030.
It’s not all smoke and mirrors. Some of it is actual smoke.

Pressure is building across Germany’s industrial sectors to reduce CO2 output after Germany embarrassingly announced it will fall short of its 2020 climate goal of reducing emissions by 40 percent. According to the government, they will achieve 32 percent at best, compared to 1990 levels.

If the government feels uncomfortable or guilty about missing targets, it's trying its best not to show it. Chancellor Angela Merkel is scheduled to hold a keynote speech with representatives from 35 countries about climate policy at the Petersberg Climate Dialogue in Berlin Tuesday.

Nor is the country’s new environment minister, Svenja Schulze, dwelling on the failure. She has quickly shifted gears. It starts with a support program and new demands placed on high CO2-producing sectors. The hope is that Germany can still claim success in 2030.

But with Germany already in a costly energy transition, not everyone is convinced the 2030 goal is realistic, either. Some industry watchers complain that the problem isn't just about adding incentives. To meet the targets will mean either major curbs on the economy, or inventing technologies that don't even exist yet today.

18 p09 Greenhouse gas emissions in Germany-01

In early July, Ms. Schulze will meet with representatives from steel, chemical, building materials and metal industries, and players from the German industry association BDI, to discuss the type of governmental support needed to develop and incorporate zero-emission technologies, rather than relying on fossil fuel production processes.

The financial support would be part of a “Decarbonisation in the Industrial Sector” program that would run at least 10 years and start in 2020 to ensure Germany can ensure a 55 percent cut in emissions by 2030. The amount of funding has not yet been decided.

Ms. Schulze also set up a structural change commission, which will provide an outline by the end of this year on how Germany can leave coal-fired power generation behind; there are similar commissions for the auto and construction industries.

Hitting the limits of physics

Because investment cycles in energy-use-heavy sectors are particularly long, the country's environment ministry is acting now to increase the likelihood of meeting both medium-term and long-term goals.

While some companies, like Siemens, chemical giant BASF, consumer retail group Henkel and facial cream maker Nivea, have set internal goals to reduce their carbon footprint, a good many others have hit their physical, even chemical, limits. For example, blast furnaces used in steelmaking are inextricably linked to CO2 emissions. No matter how much they optimize, CO2 emissions are inherent to the process. Going further and removing fundamental, process-related emissions from Germany’s CO2 balance sheet would mean resorting to drastic measures.

One BDI study published early this year concluded that the only way Germany would meet its 2050 target is if industry was allowed to capture carbon and store it underground. However, in previous legislative sessions, lawmakers failed to create the legal framework needed to permit CO2 capture and storage. It's a move many companies and industry groups are unhappy about.

Despite the challenges, Jan-Marten Krebs, head of consultancy Sustainable, said the number of German companies developing a climate strategy is at least in the three figures. Most are motivated by economic factors, but it remains clear the needed transformation will not be achieved without political prodding. “In the end, it helps companies optimize their operations and supports their innovation potential,” Mr. Krebs said.

Silke Kersting reports for Handelsblatt from Berlin, focusing on consumer protection, construction, environmental policy and climate change. Klaus Stratmann covers energy policy and politics for Handelsblatt in Berlin. Christine Coester adapted this story into English. To contact the author: [email protected], [email protected]