Guidelines & Principles
Guidelines for effective energy and climate policy
The energy transition is our big opportunity to preserve our natural resources by taking sustainable measures to tackle climate change. It is also ushering in a global technology revolution. But its success will depend on our ability to reboot climate and energy policy, systematically realigning it with the goal of greenhouse gas neutrality. Piecemeal changes to the existing framework will not be enough to transform the energy system as profoundly and rapidly as necessary. In this discussion paper, the Academies’ Project “Energy Systems of the Future” presents a series of guidelines that are key to delivering an energy policy that is fit for the future. The paper also describes the measures that the new German government must take to align the energy transition with the new climate targets.
Unless we make significant progress in transforming the energy system in Germany and the rest of the world over the next few years, anthropogenic climate change threatens to destroy the resources that our civilisation relies on and radically transform our everyday environment in a way that jeopardises our very existence. It is impossible to predict what the consequences might be for our societies. And this isn’t some alarmist doomsday scenario – it is the global scientific consensus. Our only hope of averting this threat is to stop using fossil fuels altogether and bring about a global energy transition that replaces them with abundant forms of renewable energy. And there is no time to lose.
The term of the current parliament in Germany is our last chance to get ourselves on the right track. If we leave it any longer, the cost of the transition to climate neutrality will be significantly higher, and the final outcome uncertain. The incoming German government must lay the foundations for effective climate action in Germany and Europe by realigning its energy policy. The following principles will be key:
- Prioritise climate action: Despite all the measures that have been taken, Germany has repeatedly failed to meet its national and European climate targets for several years. Many measures don’t go far enough or aren’t implemented with sufficient rigour, while technologies that are harmful to the climate continue to be subsidised. A genuinely effective climate policy requires political will on a scale not yet seen.
- Drive progress in global climate policy: To succeed, climate action must be global. Germany must strengthen its efforts to promote European and global cooperation, not least by providing other countries with financial support. But in doing so, it must not be allowed to neglect climate action in Germany, since, like every other country in the world, it too will need to become climate-neutral within a few short decades.
- Don’t lose sight of the overall system: An integrated climate policy provides an overall framework for government, industry and civil society. It is managed systemically under the central responsibility of government and parliament, and promotes the cross-sectoral development of the relevant science and technology as a source of innovative solutions. If the energy transition is to succeed, it is vital to ensure that sectoral targets and individual measures do not cause us to lose sight of the overall goal.
- Ensure that climate policy is socially compatible: Climate policy measures can present particularly difficult challenges for poorer households. But a well-designed climate policy can level out these social impacts. Moreover, the consequences of failing to act on climate change would be disproportionately higher.
- Be honest about it: Concerted action to protect the climate will transform our modern lifestyle and pose major challenges for the economy. While new markets will emerge, some old business models with a long-established tradition will disappear. Rather than attempting to conceal them, the implications of policy measures for households and businesses should be communicated transparently.
Key aspects
Take responsibility and develop whole system solutions
In order to drive the energy transition at every level, Germany should do everything in its power to promote the European Green Deal and help poorer countries around the world to tackle climate change. It must also seek to pool, systematically utilise and increase the relevant knowledge and develop joint solutions with the stakeholders.
Displace fossil fuels
Carbon pricing should be strengthened as the key instrument for reducing fossil fuel consumption. At the same time, government should provide targeted support for investment in the necessary infrastructure, such as hydrogen and electricity grids, EV charging stations and long-term storage systems.
Expand renewables faster
If the climate targets are to be met, wind and solar capacity will need to increase by between 15 and 25 gigawatts a year. This is three to four times the rate achieved in recent years. The governments of Germany’s federated states must make sufficient land available for this expansion, while it will also be necessary to reform planning and licensing law and include local residents from an early stage.
Use more green electricity for heating and transport
The key to reducing emissions in the heating and transport sectors is more competitively priced electricity – and the single most important measure for achieving this is the abolition of the EEG surcharge. It will also be necessary to build storage systems, reward flexibility, and leverage energy efficiency opportunities that make environmental and economic sense.
Make the electricity supply fit for the future
In the future, the electricity supply will be more connected, decentralised, flexible and participatory. In order to maintain a secure energy supply, it will be necessary to gear the system’s technical and regulatory aspects towards renewable energy systems, significantly expand and digitalise the electricity grid, and build long-term storage systems.
Target climate-neutral industry
The German government can play a key part in driving the necessary transformation of industry by setting an effective carbon price, introducing Carbon Contracts for Difference for businesses, and striving to build a global climate action alliance, with Chinese and US participation a top priority.
Use hydrogen appropriately, leverage its opportunities
Hydrogen has a key role in enabling a climate-neutral global economy, both as a fuel and as a raw material. In order to ensure a secure, long-term hydrogen supply, urgent action is required to build global markets and infrastructure, establish equal partnerships, and ensure that the relevant areas of application are appropriately prioritised.
Use bioenergy where it benefits the system
A comprehensive biomass strategy must ensure that biomass is used where it delivers the greatest benefits, for instance in industry and as a liquid fuel for aviation and shipping. In the future, bioenergy should be derived from residual and waste material rather than energy crops.
Secure the supply of raw materials for the energy transition and use them sustainably
In order to meet the high demand for raw materials that will arise in connection with the energy transition, it will be necessary to reduce the amount of raw materials used to make products, exploit new sources of raw materials, and improve recycling rates.
Ensure that clima Closete policy is transparent and just
To ensure public acceptance of and support for the energy transition, it will be necessary to communicate climate policy transparently, mitigate the associated burdens for poorer households, and take different social realities into account.
Illustrations by Ellery Studio
Take responsibility
Take responsibility and develop whole system solutions
Why does it matter?
The international community has so far failed to respond adequately to the existential threat that climate change poses to humanity. Although it has set ambitious climate targets, it has not done enough to ensure that they are met. To meet the targets, climate change must be recognised at every level as an existential challenge for the whole of society, and must be placed at the heart of decision-making and policy. Individual citizens, businesses, local, regional and central government, the EU and the international community must all pull together to overcome this challenge.
Coordinate at European and global level
The energy transition calls for a new decision-making culture, and the German government should take the lead on this project. It will need to create the necessary structures, ensure that the content and implementation of the European Green Deal are as ambitious as possible, and take action globally in conjunction with the other EU member states. The industrialised nations of Europe are responsible for a large proportion of historical emissions. Consequently, they have a duty to contribute to globally effective solutions – and they also have the capacity to do so. Germany and the rest of the EU can help poorer countries tackle and adapt to climate change by delivering projects and providing them with innovative technologies, infrastructure, model solutions and substantial financial support. An independent, science-based monitoring commission could assess progress towards a global energy transition, establish standard assessment criteria, and identify transferable examples of best practice in the policy, economic and social arenas.
Promote joint decision-making, facilitate local action
To tackle climate change effectively, the energy transition must be delivered on a global scale. However, concrete measures can and must be devised and implemented at every level, from the development of global and European markets for renewables and multi-regional and national power grids, to new systems and efficiency measures in municipalities, cities, districts, businesses and households. In order to encourage local citizens and businesses to contribute creative solutions and help co-design these measures, they should be included in the transformation process from an early stage and be offered genuine opportunities to participate.
Invest in climate-neutral infrastructure without delay
The future energy system will require different infrastructure to the current one, for example charging stations for electric vehicles, hydrogen pipelines and smart distribution grids. Government must actively drive this transformation by supporting the development of climate-neutral infrastructure and ending both direct and indirect support for technologies and infrastructure that damage the climate. It is not enough simply to base decisions on whether infrastructure can be operated profitably in the short term under current conditions – it is also essential to consider whether a particular infrastructure is necessary in order to meet the climate targets cost-effectively. Moreover, the goal of achieving climate neutrality by 2045 drastically limits the scope for using bridge technologies that reduce emissions compared to current levels but still use fossil fuels. Examples include using gas heating instead of oil, or hybrids instead of vehicles with combustion motor. By being among the first countries to establish a domestic market for the relevant products, Germany can help to achieve the goal of building a new global market and also benefit from exporting the necessary technologies.
Displace fossil fuels
Displace fossil fuels
Why does it matter?
Around 80% of all greenhouse gas emissions are caused by burning coal, petroleum products and gas. Stopping these emissions as soon as possible is the single most effective thing we can do to tackle climate change. One of the key instruments for achieving this is carbon pricing, which makes it less attractive to use fossil fuels instead of climate-friendly alternatives. It is also necessary to ensure that appropriate low-emission alternatives are available. The impact of carbon pricing should therefore be strengthened and accelerated through a range of additional measures. The instrument mix should be simple and transparent, enable reliable, long-term planning, and be regularly reviewed to determine whether it is sufficient to ensure that the climate targets are met.
Align the different pricing systems in Europe
The EU emissions trading system (EU-ETS) sets an EU-wide carbon price that until now applied to power stations and energy-intensive industries. However, the European Commission’s new Fit for 55 package includes plans to introduce an additional trading system for emissions from heating and transport. In order to stabilise expectations and achieve efficient long-term emission reductions, Germany must push for the two emissions trading systems to be aligned and to begin planning for the transition to an overarching, EU-wide system right away. The total number of CO2 certificates should be set in accordance with the relevant climate targets, and the calculation method should be transparently communicated.
Adjust the national carbon price in Germany
Germany introduced a national carbon price for fuels used in heating and transport in 2021. To prevent dual pricing, it will be vital to review future carbon pricing in Germany before the new EU emissions trading system is introduced in 2026. Since the carbon price in the new EU emissions trading system will be aligned with the climate targets, it is likely to be higher than the price pathway currently planned in Germany. The latter should be significantly increased in order to stimulate early investment in low-emission technologies and prevent the risk of a sudden price hike when switching systems.
Stop subsidising fossil fuels
Direct and indirect subsidies for fossil fuels push down energy prices and undermine the effect of carbon pricing. These subsidies should be stopped as soon as possible. The EU is already planning to introduce a tax on kerosene and carry out a review of the Energy Taxation Directive in order to align it with environmental and climate objectives. Preferential national tax treatment for diesel and company cars, for example, should therefore be ended.
Create an effective national framework and support carbon pricing through other instruments
Additional instruments are necessary in order to provide targeted support for the effects of carbon pricing. It is especially important to encourage companies and private individuals to invest in climate-neutral alternatives to high-emission plant and goods with long lifespans, even if doing so doesn’t or doesn’t appear to make financial sense at the present time. Instruments that promote the development and introduction of climate-friendly alternatives can efficiently support the desired transformation of the economy if they are automatically removed once their goals have been achieved. The same applies to government co-financing of climate-friendly infrastructure, e.g. hydrogen pipelines, rail infrastructure and electric vehicle charging stations. Technology standards such as the EU’s fleet-wide emission standards for new vehicles and building standards can support the transition to climate-friendly technologies until the carbon price reaches a sufficiently high level.
Expand renewables
Expand renewables faster
Why does it matter?
Just under half of all electricity produced in Germany today already comes from renewable sources. But in a climate-neutral energy system, we will need enough green electricity to meet all of our country’s electricity demand. And demand for electricity is set to rise sharply as heat pumps and electric vehicles become increasingly common in the building and transport sectors. In addition, large amounts of green electricity will be needed to replace fossil fuels in industry, while electricity is also necessary to produce climate-neutral fuels such as hydrogen for steel production, hydrocarbons to replace crude oil, and synthetic fuels for aviation and heavy goods vehicles. We must make full use of the significant untapped potential for affordable renewables that still exists in Germany, especially solar power and onshore and offshore wind. Since hydropower, bioenergy and geothermal energy can only make a relatively small contribution, wind and solar capacity will need to increase to between four and six times its current level by 2045, even if we import large quantities of green energy and achieve significant improvements in energy efficiency.
Significantly increase the statutory expansion targets
Meeting the new climate targets and the growing demand for green electricity in the heating and transport sectors will call for an annual increase of between 15 and 25 gigawatts. While this is a lot more than the 6 gigawatt increase achieved in 2019, in principle it should still be feasible – in the past, Germany has already managed to build as much as 10 gigawatts of additional wind and solar PV capacity in a single year. The projected increase in demand for green electricity should be reflected in the statutory expansion pathways. Regional and local government in Germany should be required to make sufficient land available for this expansion as soon as possible, so that the relevant targets can be met. Moreover, the national targets should be incorporated into the overall European strategy.
Use the available space smartly
The new solar and wind installations will require space. Dual-use solutions can reduce the amount of space needed and defuse land use conflicts. For instance, solar and wind technology can be mounted on facades, car park canopies, or currently unused roof space. Dual-use solutions are also possible in the agricultural sector, where space can be saved by designing solar parks that double up as cropland, pasture or habitat to support biodiversity.
Actively include local residents
Local support is absolutely vital to the expansion of renewable energy. Sociological and behavioural economics studies have found that providing more opportunities to participate, offering compensation for negative impacts and encouraging the financial involvement of local authorities and residents helps to ensure that people welcome the changes associated with the energy transition and actively engage in shaping them.
Speed up the procedures
The current rate of progress wil not be enough to achieve the expansion required by 2030. The planning and licensing procedures for wind farms currently take between four and five years. These procedures can be accelerated by implementing changes in planning law, including the public from an early stage, and recruiting additional personnel in the responsible planning and licensing authorities and courts.
Heating and transport
Use more green electricity for heating and transport
Why does it matter?
While the increase in wind and solar capacity has reduced emissions from electricity generation, emissions from heating and transport are stagnating. Fossil fuels must now be replaced by green electricity in these sectors, too (“sector coupling”). However, since even in the future Germany and other countries will not have an unlimited supply of green electricity, it remains important to use electricity as efficiently as possible. Since some energy is lost during every conversion stage, it is generally more efficient to use electricity directly than to convert it e.g. into hydrogen. Electric motors and heat pumps, for instance, use significantly less energy than internal combustion engines and conventional heaters. In the long run, these technologies can thus help to reduce the overall energy demand that will need to be met by green electricity. Where feasible and appropriate, electricity can be supplemented by deep geothermal and solar thermal energy.
Create a level playing field for different types of energy
The prices that households and businesses pay for different types of energy influence which ones they use. However, the current pricing system is distorted – electricity is much more heavily taxed than heating oil and natural gas, for example. Following the introduction of carbon pricing for the heating and transport sectors through the fuel emissions trading system, the most important step that can now be taken is to bring the price of electricity down by abolishing the EEG surcharge. Support for renewable energy generation should instead be delivered through other forms of government funding. This could be done – at least to a large extent – by using the revenue from German and European carbon pricing. In addition, the new German government should contemplate reducing tax on electricity. As well as promoting electricity use, bringing down the price of electricity would lessen the burden on households and businesses, while the complex EEG surcharge exemptions would also disappear. An effective price reform will require private households in particular to be provided with detailed information about the cost benefits – consumers need to understand that using electricity instead of fossil fuels to heat their homes and power their vehicles will generally work out cheaper for them in the long run, as carbon prices rise.
Increase the number of electric vehicles, storage systems and heat pumps
Only climate-neutral technology will be permitted in a climate-neutral Germany in 2045. Consequently, any high-emission vehicles and heating systems bought after 2030 will have to be scrapped before they reach the end of their technical service life. Strong and immediate growth in the proportion of electric vehicles and heat pumps is thus essential. In the interests of security of supply, it is also necessary to increase the number of electricity storage and heat storage systems in order to balance the fluctuating supply of renewables. Government can support this growth by subsidising large-scale investments and through targeted co-financing of the necessary infrastructure. Non-monetary incentives such as electric vehicle only lanes and parking spaces can also help with the transition to climate-neutral mobility.
Reward flexibility
In addition to storage systems, flexible consumers such as electric vehicles and flexibly operated industrial systems will also be needed to balance out fluctuations in the supply of renewable energy. They can do this by charging and operating mainly at times when a lot of electricity is being generated. The technologies already exist, but we do not yet have the requisite business models or the necessary level of digitalisation. The regulatory framework should be modified to create incentives for flexible consumption, for instance through time-dependent electricity tariffs
Electricity supply
Make the electricity supply fit for the future
Why does it matter?
The electricity supply is becoming more connected, decentralised, flexible and participatory. Wind and solar farms are feeding fluctuating amounts of electricity into the grid, home owners, farmers and renewable energy communities are all using their own installations to generate electricity, and there are plans to increase cross-border electricity trading within Europe. At the same time, demand for electricity is growing and could even double due to new consumers such as electric vehicles and heat pumps. All of this is posing new challenges for the electricity infrastructure and market. Fundamental changes must be made to the electricity system if we are to maintain high security of supply and keep costs as low as possible in years to come.
Put renewables at the heart of the system
Until now, we have tried to shoehorn renewables into a system dominated by coal, natural gas and nuclear power by establishing special rules for them. But with renewables now accounting for almost half of all electricity generated, the time has come for a paradigm shift. In order to achieve a rapid and affordable transition to 100% renewable energy, the entire electricity system must be adapted to the requirements of wind and solar electricity generation. This will involve technical, economic and regulatory reforms.
Expand the electricity grid
Even if large numbers of decentralised generators supply electricity locally, it will not be possible to achieve the energy transition without expanding and improving the performance of electricity grids at every voltage level, so that they can distribute and balance a growing, spatially and temporally variable input. Moreover, ensuring that grids throughout Europe are closely connected to each other will make it possible to harness weather-related regional input differences to provide electricity for everyone. Grid expansion plans must be rapidly and systematically aligned with the goal of achieving climate neutrality by 2045. This will prevent public confidence from being undermined by constant readjustments of the grid expansion targets.
Accelerate digitalisation
Accelerating the digitalisation of the energy system is key to coordinating the large number of decentralised generators, storage systems and consumers. Digitalisation will make it possible to achieve a better balance between supply and demand in the electricity market, thereby stabilising the grid. However, it will also be necessary to develop strategies to protect the digitalised energy system against software bugs and cyber attacks (resilience) and to prevent breaches of consumer privacy through effective data protection.
Enable and secure long-term investment
As well as more renewables, the electricity system of the future will also need back-up capacity and long-term storage to cover those times when there is not enough wind and solar power. There is no consensus about whether the current electricity market can offer enough long-term security to guarantee investment in the necessary systems. This question should be thoroughly investigated so that we can start setting the course for tomorrow’s electricity market as soon as possible.
Climate-neutral industry
Target climate-neutral industry
Why does it matter?
Industry is responsible for around one third of global greenhouse gas emissions, and a significant proportion of these emissions is linked to the production of basic materials such as steel, cement and plastic. The fact that industrial facilities have a lifespan of several decades means that there is a particularly high risk of long-term dependency on high-emission processes, often referred to as carbon lock-in. A three-pronged approach is required to reduce emissions from industry: (i) reduce demand for basic materials through enhanced material efficiency and by using products longer and more intensively; (ii) close material cycles as part of a circular economy approach, for instance by designing products so that their materials can be easily separated and recycled; (iii) make production processes and raw materials climate-neutral through electrification and by using green hydrogen and domestically produced green hydrogen-based hydrocarbons.
Ensure that climate-neutral products can compete in the global market
The Fit for 55 package creates an awkward dilemma for the European Commission. On the one hand it needs to create strong incentives for effective climate action in Europe, while on the other it also has to prevent carbon leakage by taking measures to stop industrial enterprises from moving production to countries with less stringent climate policies. The German government must do everything in its power to forge a climate action alliance that includes the US and China as soon as possible. The unilateral introduction of a carbon border adjustment mechanism by the EU would be a highly risky policy.
Stimulate investment through Carbon Contracts for Difference
The carbon prices in the EU emissions trading system are likely to be too low, both now and in the near future, to ensure the market success of key climate-neutral production processes. Carbon Contracts for Difference (CCfDs) can help to overcome this problem by encouraging companies to press ahead with investments in climate-friendly processes. By fully compensating the difference in cost between climate-neutral and conventional processes, CCfDs allow businesses to invest with confidence. This is extremely important, since many existing facilities are due significant reinvestment in the period between 2020 and 2030. One key benefit of CCfDs is that government support is reduced as carbon prices rise. Once the carbon price reaches a sufficiently high level, the subsidies are automatically terminated.
Support the circular economy and climate-friendly materials at national and EU level
Closing material cycles can help to reduce emissions and environmental costs that until now have been largely overlooked in terms of pricing. Measures to promote a circular economy and the use of climate-friendly materials are needed across the entire value chain – from the choice of basic materials and the production of goods right through to the waste management process. Examples include the product design standards in the EU’s Ecodesign Directive, and incentives created through charging structures for the Green Dot and deposit return schemes.
Develop the necessary infrastructure in good time
If industry is to achieve climate neutrality, it will need large quantities of competitively priced green electricity and green hydrogen, with a safe transport infrastructure. For unavoidable process emissions, e.g. from the cement and lime industry, it will be necessary to build carbon capture systems and the associated transport infrastructure, and to develop appropriate carbon storage sites (Carbon Capture and Storage). While the relevant changes in licensing law will need to be made as soon as possible, the priority must be to engage in a public debate about this technology, which remains controversial in Germany.
Use hydrogen appropriately
Use hydrogen appropriately, leverage its opportunities
Why does it matter?
Hydrogen has a key role in enabling a climate-neutral energy supply. Hydrogen and hydrogen-based synthesized products (such as ammonia, methanol, synthetic kerosene and other hydrocarbons) can store energy from the wind and sun and allow it to be transported and used in a variety of different ways, including applications where it is not possible to use green electricity directly. Hydrogen-based energy carriers can also be imported from distant countries with more wind and solar resources than Germany. This will be vital, since it is likely that, in the future, Germany will still lack sufficient domestic resources to meet its demand for energy and for the hydrocarbons used as raw materials in the production of things like plastic, fertilizer and pharmaceuticals.
Cooperate as equals with partner countries, think European and global
A lot will need to happen in a short space of time if the climate targets are to be met. It will be necessary to create global markets and value chains for climate-neutral hydrogen, covering everything from its production to its transport and utilisation. Moreover, the relevant regulations will need to be amended and new ones introduced. It will be vital to create stable, long-term partnerships for hydrogen imports that also benefit people in the producer countries by creating local value. Continuous assessment of whether it is better to use renewable electricity locally will also be key. After all, it is no good for the climate if coal- and gas-fired power stations are used to supply local electricity because all the green electricity is being used to produce hydrogen for export.
Be realistic about how much will be available, clearly prioritise areas of application
Germany already consumes around 1.7 million tonnes of hydrogen a year (approximately 55 terawatt hours). This hydrogen is mainly produced from natural gas and is mostly used by refineries and the chemical industry. It would take approximately 85 terrawatt hours of electricity just to meet this level of demand with green hydrogen – equivalent to around 15% of the electricity currently generated in Germany each year. And much higher amounts of electricity will be needed if we also want to use green hydrogen as a fuel and raw material in industry. In view of these huge electricity requirements, it is important to be realistic about hydrogen’s potential and how much of it will be needed in both the short and the longer term. The expectation that we will be able to import hydrogen in the future must not result in the postponement of measures such as the electrification of road transport and heating, the expansion of renewables and efforts to reduce energy consumption. Since there will initially only be a limited supply of green hydrogen and green hydrogen-based liquid fuels, these should be used first and foremost for applications where electricity cannot (yet) be used directly, such as steel production, aviation and shipping.
Strengthen R&D, develop infrastructure
R&D must be accelerated and large-scale demonstration projects established to help hydrogen technologies make the leap from the drawing board to practical applications. The infrastructure for storing hydrogen and transporting it both within Germany and internationally must also be built as quickly as possible. Appropriate government support will be key to making this possible. Of particular importance are those plants that are due to receive long-term investments in the next few years, and for which switching to hydrogen is likely to be the only alternative. In the steel industry, for example, fossil fuel-based hydrogen could be used for a limited transition period in order to prevent long-term investments in conventional technologies. In this scenario, it would be necessary to establish a regulatory framework requiring a gradual transition to 100% green hydrogen.
Bioenergy
Use bioenergy where it benefits the system
Why does it matter?
Biomass is the only renewable energy source that exists in material form. It can be used to generate electricity and heat or as a biofuel, and is also increasingly being used by manufacturing industry to replace climate-wrecking materials and raw materials such as petroleum, concrete and steel. On the other hand, the cultivation of energy crops such as maize, oilseed rape and oil palms requires large areas of land and can damage the soil, cause water pollution and harm biodiversity. Moreover, biomass has a much lower energy yield per unit of area than solar power. It is also important to ensure that growing energy crops does not further compromise our ability to feed the rising global population, especially at a time when agriculture is facing increasing threats due to climate change. And it should be remembered thatusing wood to produce energy only in some cases actually contributes to reducing harmful emissions. Since there is only a limited supply of sustainably produced biomass, it should be used in a way that generates the greatest benefits for the system as a whole.
Implement a comprehensive bioenergy strategy
At present, bioenergy is used in various different ways. Wood is mainly used for heating, while agricultural biomass (“energy crops”) is used to produce biogas, primarily for generating electricity and heat, or liquid biofuels. As the supply of wind and solar power grows, bioenergy applications should be adapted accordingly, ensuring that bioenergy is only employed to complement green electricity as and where necessary. A comprehensive bioenergy strategy should ensure that biomass is used where wind and solar power cannot be used directly, i.e. in industry and aviation, and to generate electricity in flexible biogas plants at times when little or no wind and solar power is being generated.
Use residual and waste material instead of growing biomass crops
Currently unused wood waste, straw and animal excrement have considerable potential. If greater use were made of these resources to produce energy, they could gradually replace energy crops without reducing overall bioenergy use. This would maintain the benefits of bioenergy for the energy system while at the same time minimising the threats to nature, the environment and food security.
Consider the global repercussions of using bioenergy in Germany
In view of the associated environmental threats, the use of timber and agricultural raw materials to produce energy should not be increased – the resulting land use intensification would put even more pressure on nature and the environment. Since timber and agricultural raw materials such as vegetable oils are traded on global markets, their use in Germany can have repercussions for ecosystems all over the world. Germany should promote effective global instruments to protect our forests and ensure climate- and nature-friendly land use. As well as bioenergy, these instruments should encompass all other agricultural and forestry products. Only very limited use of bioenergy should be allowed until these instruments take effect.
Trial bioenergy with carbon capture and storage (CCS)
It is possible to use bioenergy to power industrial facilities and capture the resulting CO2 emissions. If this CO2 – previously removed from the atmosphere by the plants making up the biomass – is stored underground using carbon capture and storage (CCS) technology, the net effect is to reduce the amount of CO2 in the atmosphere (“negative emissions”). Alternatively, the CO2 can be used to produce climate-neutral synthetic fuels or hydrocarbons for industrial use, for example.
Securing raw materials sustainably
Secure the supply of raw materials for the energy transition and use them sustainably
Why does it matter?
Wind turbines, solar PV systems, storage systems and electric vehicles are all made from metals such as steel and copper, as well as rare earth elements, cobalt and lithium. For some of these metals, Germany and Europe are even more reliant on imports from a handful of countries than they are for mineral oil. Supply shortages for these raw materials could hamper the development of a climate-friendly energy supply. An active raw material policy is needed to guarantee the supply of the raw materials needed for the energy transition. After all, it is easier to overcome individual supply shortages if the raw materials are sourced from several different suppliers. At the same time, alternative products and manufacturing processes should be promoted in order to reduce demand for critical raw materials.
Reduce raw material consumption by being smart about how we produce and use products
We can reduce raw material consumption by making longer-lasting, more easily repairable products and making better use of them (e.g. through solutions like carsharing, where several people share a single product). The amount of raw materials needed to make products can also be reduced through lightweight design and by preventing material loss during the manufacturing process. Moreover, concerted materials research can help to find more readily available replacements for critical raw materials.
Improve recycling
While steel, aluminium and copper are already widely recovered from scrap metal, recycling rates for high-tech raw materials such as the rare earth elements, indium and gallium remain very low. In order to reduce reliance on imports, the German government should take measures to increase recycling rates. Efficient recovery of valuable raw materials must be enabled and promoted throughout the entire product life cycle. This should include everything from recyclable product design and more consumer-friendly collection systems to stricter export controls on used goods in order to prevent the illegal export of electronic waste, and waste legislation stipulating high recycling standards for special and precious metals.
Exploit untapped raw material sources in Europe
Even if it were hypothetically possible to recycle everything, this would still not be enough to fully meet the growing demand for raw materials without some mining. Stepping up mining activity in Europe again would make us less dependent on politically unstable countries and the countries that dominate the market. The recent change in German mining law to make it easier to mine lithium in Germany is a step in the right direction.
Help industry to secure our raw material supply, safeguard environmental and social standards
Germany should work internationally to promote open and transparent raw material markets and support private-sector supply relationships through trade agreements and intergovernmental treaties. Strategic investment in raw material projects can also help to improve security of supply. As well as being a moral imperative, improving environmental and social standards around the world is key to ensuring a level playing field in both the mining industry and the recycling sector. Binding transparency mechanisms can force companies to disclose their production conditions.
Negative emissions
Negative emissions: remove CO2 from the atmosphere
Why does it matter?
Even in the best-case scenario, it is probable that agriculture and some parts of industry will still be emitting greenhouse gases in 2045. Offsetting these emissions is the final piece in the puzzle of achieving climate neutrality. This will call for techniques capable of removing CO2 from the atmosphere and storing it permanently, sequestering it in vegetation and soil, or locking it into long-lived products such as construction timber. According to the IPCC, from the middle of this century on we will actually need to remove more greenhouse gases from the atmosphere than we emit if we are to limit global warming to 1.5°C. This is referred to as net negative emissions.
Engage in a public debate to determine the role of CO2 removal
There are various different ways of removing CO2 from the atmosphere. The German government has hitherto focused mainly on “natural sinks”, i.e. ecosystems such as forests, that sequester carbon. However, it is unlikely that this approach has enough potential in Germany to achieve net negative emissions in the long run. Moreover, since climate change poses a particular threat to forests, there is no guarantee that they will actually be able to store CO2 on a permanent basis. Forest fires, droughts and pests can damage forests so badly that the sequestered carbon ends up escaping back into the atmosphere. As well as natural sinks, various technological solutions for removing CO2 from the atmosphere are also being discussed. CO2 can be captured from bioenergy plants or directly from the air and permanently stored in geological formations using Carbon Capture and Storage (CCS) technology. However, there is still uncertainty about the long-term potential and cost of these technologies. Although CCS is controversial in Germany, it will probably be needed to meet the climate targets. Carbon Capture and Storage could also be used in other countries where green energy is cheaper and there is less opposition to CCS. The German government should therefore initiate a public debate that looks beyond 2045 with a view to establishing which CO2 removal methods should be used and when to start using them
Research and implement CO2 removal methods
Following further research and testing, the different CO2 removal methods will need to be brought to market within the next 10 to 20 years. Since it is not yet possible to fully assess the potential, cost and risks of individual techniques, a broad mix of different solutions should be pursued for the time being.
Don’t exaggerate the potential
We do not know how much CO2 can actually be removed from the atmosphere over the next few decades and how much it will cost to do so. Consequently, the top priority should be to prevent emissions so that we can minimise our reliance on uncertain and as yet unproven CO2 removal technologies. We should thus only resort to removing CO2 from the atmosphere to offset emissions that cannot be prevented.
Transparent and just climate policy
Ensure that climate policy is transparent and just
Why does it matter?
The energy transition cannot succeed without the acceptance and active support of the public. According to the opinion polls, the majority of people are in favour of the energy transition and rate tackling climate change as very important. However, many are unhappy with how climate measures are being implemented in practice. Among other things, this is because they think the burden of the energy transition and of tackling climate change is not being shared fairly, and because they feel that existing structures make it difficult to behave in a climate-friendly manner. For instance, transport policy does not currently provide sufficient support for climate-friendly mobility. Climate policy should seek to ensure that the burdens associated with the transformation are shared fairly and communicated transparently. It will be important to take different social realities into account and find socially acceptable solutions that still send out the right climate action signals.
Communicate climate policy openly and transparently
The energy transition and other measures to tackle climate change will mean big changes for society, including a transformation in how we behave as consumers and how we live our everyday lives, and a huge amount of investment. But if we fail to act decisively now, the long-term costs will be much higher. If we keep missing our targets, in just a few years’ time governments will be forced to take even costlier measures and impose even greater restrictions on our individual freedom in order to deliver the climate goals. The German government should promote an extensive debate about the scale of the challenge, about the costs and benefits of climate action, and about how its burden will be shared. Everybody should have a clear understanding of what the measures will mean for them as individuals.
Make targeted use of carbon pricing revenue
Sharing the burden fairly means that the people and companies who generate the most emissions should pay proportionately more. Carbon pricing is key in this context, since it is a transparent mechanism that automatically ensures that high emitters pay more. However, the burdens associated with carbon pricing and other measures to tackle climate change can hit poorer households harder because they have less disposable income. The revenue from carbon pricing could be used both to finance government climate measures and to reduce the burden on businesses and the public. Abolishing the EEG surcharge would be a particularly beneficial measure, since it would bring the price of electricity down, making green electricity more attractive while also reducing the burden on businesses and (especially poorer) households. However, it is important to ensure that measures to reduce the burden do not negate the impacts of carbon pricing. For instance, a higher flat-rate tax allowance for commuters would also benefit long-distance commuters, even though more than 80% of them already travel by car today.
Create climate-friendly alternatives
It can often be difficult for individuals to behave in a climate-friendly manner. Behaviours that rely on fossil fuels are deeply rooted, and it is not always easy to find attractive, climate-friendly alternatives. It is vital to create these alternatives so that people are actually able to change their behaviour. This includes everything from well-developed, accessible public transport and safe, attractive cycle paths to giving people the option of working from home. It is essential to take different social realities in urban and rural areas into account so that good solutions are found for everyone. For example, a road toll could be introduced that made it more expensive for people to drive a car in cities with good public transport, but did not penalise people living in rural areas. Similarly, it is necessary to develop ways of paying for air-conditioning in buildings that are fair to both tenants and landlords.
