Germany

Germany’s industrial transformation towards climate neutrality by 2045, especially in energy-intensive sectors such as steel, chemicals, cement, paper and glass, is a complex undertaking. Changing production processes, expanding renewable electricity and hydrogen infrastructure, and establishing a CO2 infrastructure for industrial supply are among the main tasks of the transformation. Incentives to boost the circular economy should go hand in hand with stimulating demand for green products. Building on European frameworks such as emissions trading, Agora Industry works on integrated policy concepts along the entire industrial value chain that are necessary for the transformation. Such policy concepts include carbon contracts for difference (CCfDs) to provide security against higher production costs for climate-neutral products until prices in the European carbon market align with these costs, targeted public procurement to create lead markets for green or recycled products, financial incentives for increased electrification of process heat, and internationally compatible definitions and standards to help specify green product attributes and establish their market value.