#btw21: Climate policy for more innovations


German mechanical and plant engineering stands for turning megatrends into economic opportunities, especially in climate protection. These include the circular economy, the availability of renewable energies, the development of a hydrogen economy and the transformation in mobility. The technical solutions to significantly reduce greenhouse gas emissions are already available today.

Reform of taxes and levies

As far as energy costs are concerned, we need a political regulatory framework that is open to technology and transcends the boundaries of sectors and energy sources. The current system of financing and taxation leads to completely different burdens that are largely independent of the climate impact of the energy sources. What is needed is a comprehensive reform of energy-related taxes, levies and charges on energy carriers according to their greenhouse gas intensity per energy content. Only then can a CO2 price develop its full incentive effect.

Acting globally to reduce emissions

The Paris climate protection agreement pursues the goal of limiting the increase in global warming to 1.5°C if possible. From the perspective of the mechanical and plant engineering industry, this is ambitious, but not impossible. However, it can only be achieved if investments are also made in less prosperous economies and a global trading system for emission reductions is established. The agreement provides for appropriate mechanisms, but these have not yet been negotiated. Germany must therefore work at the climate conference in Glasgow to reach an agreement on this. Interim targets on the reduction path to climate neutrality in 2050 should then consist of both a minimum share of domestic reductions and an optional contribution to be achieved internationally.

Availability of renewable energies

The availability of cost-effective climate-neutral energy will become a decisive location factor with the ambitious social and company-specific climate targets. For the increased expansion of electricity production from renewable energies and the conversion into climate-neutral gases or liquid energy sources, more areas must be designated and planning and approval procedures accelerated. Another important element is the repowering of old plants in order to make more efficient use of the existing but limited areas. At the same time, partnerships must be expanded with countries that have more favorable generation options.

Did you know that greenhouse gas emissions can be reduced by up to 86% worldwide through the products of mechanical and plant engineering? This is shown in a joint study by VDMA and BCG.

Building the hydrogen economy

Hydrogen plays a decisive role in the reduction of emissions in industry and in the transformation of drive technologies. With the production of hydrogen as well as derived fuels (Power-to-X) it will be possible to combine green technologies with positive environmental aspects. This is the case, for example, in steel production or in the development of new drive systems. Hydrogen can be used in fuel cell vehicles or further processed as a synthetic fuel (eFuel) and will be indispensable in the future for aviation and shipping as well as for many mobile machines in the agricultural and construction industries. The production processes are mature and are waiting for their market ramp-up.

Shaping the circular economy

The circular economy has become a megatrend in mechanical engineering and, in addition to conserving resources and optimizing products, offers the opportunity to develop new business models. This requires the right political framework conditions. The new German government is called upon to carefully shape the regulatory design for the circular economy. The aim must be not to hinder innovation and creativity, to avoid design control and at the same time to establish common standards for sustainable product design and a well-functioning secondary raw materials market.


The technical prerequisites for achieving the Paris climate targets are in place. However, reliable political framework conditions are lacking. Germany must act now and, by the beginning of the next legislative period at the latest, ensure that the organisation of more renewable energies is accelerated through improved planning and approval procedures. In addition, there is a need for global trading in emission reductions, a genuine hydrogen economy and common standards for sustainable product design, so that a well-functioning secondary raw materials market can be established.


Matthias Zelinger, Head of VDMA Competence Center Climate and Energy,
Phone 49 69 6603-1351, e-mail: matthias.zelinger@vdma.org

Andreas Rade,Managing Director VDMA Headquarters,
Phone 49 30 306946-16, e-mail: andreas.rade@vdma.org