Germany's pursuit of climate neutrality

Policy paper by KfW Research and the PIK on fields of action in the area of CO₂ removal as a pillar of climate policy. Key statements are the need for market adaptation, innovation and international cooperation in carbon markets to scale up the market ramp-up and effectively combat climate change. (November 2024)

More than half of German companies (54%) were already using electricity from renewable energies in 2022. In contrast, only one in ten companies used heat from renewable energies. Both electricity and heat from renewables are more common in larger companies than in smaller ones. (April 2024)

This technology is important for the energy transition because household PV generates electricity on site and households can consume it right away, easing the load on the power grid. Considering the regional global radiation, great potential for household PV currently exists in Germany. (April 2024)

As a result of Russia’s war of aggression against Ukraine, Prognos AG, on behalf of KfW Research, has undertaken a reassessment of the bridge function of natural gas on the path to climate neutrality in Germany. It found that the natural gas bridge will become narrower but not shorter. (November 2023)

At the 28th UN Climate Change Conference (COP28) at the end of November, the first Global Stocktake (GST) process will assess progress made on climate action that was established in the Paris Agreement. There remains a lot to be done but there are promising approaches as to how a course correction can be made. (November 2023)

Survey data shows the climate change mitigation and adaptation investments currently undertaken by German municipalities. It also sheds a light on the development of future climate action investments anticipated by cities, communities and districts, their funding as well as barriers and drivers. (April 2023)

A representative ad hoc survey conducted as part of the KfW Energy Transition Barometer has revealed broad popular support for accelerating the roll-out of renewables which runs across all sections of the population. And this is urgently needed because Germany needs to install roughly four times as much capacity in the next eight years as it has in the past eight years. (March 2023)

Current geopolitical challenges and an unequal distribution of oppor­tunities and risks between states are making it difficult to agree on urgent global responses to climate change. In order to advance swiftly, more countries must be motivated to implement carbon pricing sys­tems. At the same time, a consen­sus on a minimum carbon price supported by as many coun­tries as possible can pragma­tically pave the way towards a global carbon pricing scheme. (February 2023)

Russia’s war of aggression against Ukraine and the COVID-19 pan­demic have shaken the foundations of a rules-based world order and the German economic model. Even amid the necessary short-term crisis management, long-term strategic decisions must now be made for a green and digital transformation as the key to successful adaptation to the changed environment. Invest­ment is a key building block of the neces­sary restruc­turing. This requires a joint effort by govern­ment, the business community and private households. (November 2022)

The transition to net zero and the digitalisation drive will significantly shape future material requirements. While global demand will grow strongly not just for bulk metals such as copper but also for special metals such as lithium, rare earths and cobalt, high import dependencies along the value chain are turning into a stress test for the future supply of raw materials and for Europe as a technology location. (September 2022)

In order for Germany to be able to make its contribution to global climate action and become climate neutral by 2045, substantial private and public-sector investment in the transformation will be necessary. Around 10% of the country’s total investment requirements will have to be met by the federal, state and local governments directly. (April 2022)

Germany’s transition to climate neutrality is progressing. SMEs need to step up too. In 2020, around 460,000 small and medium-sized enterprises undertook investments that also served to protect the climate. In total, they invested EUR 22 billion. In order for Germany to become climate neutral by 2045, considerably more investment is needed. (December 2021)