Jochen Flasbarth has a long history of his own with Thyssenkrupp. Flasbarth, currently still State Secretary in the Federal Environment Ministry, was after all a young environmentalist and he comes from Duisburg-Rheinhausen. “At that time I was fighting Thyssenkrupp,” he says – as a dirty industry. Today, however, there are no longer any fundamental contradictions – now that the steel industry is also on the way to climate neutrality. “An interesting perpetrator-victim balance,” says SPD man Flasbarth.
A lot has shifted in the relationship between business and environmentalists. For years, large parts of the industry were on the brakes when it came to many requirements, and climate and environmental protection were seen as an annoying obstacle in the competition between locations. “The times are over”, says Sabine Nallinger, board member of the 2 Grad Foundation: “Climate protection has fully arrived in the economy.” In international competition, the question now arises as to who will bring climate-neutral products onto the market in good time.
Jochen Flasbarth, State Secretary in the Federal Environment Ministry, once fought Thyssenkrupp, today he sees it differently.
(Photo: Christian Charisius / dpa)
The management consultancy McKinsey is also observing this. “All CEOs are currently considering how quickly they can get on the road to decarbonization,” says Ruth Heuss, Senior Partner at McKinsey – in other words, away from fossil fuels. “The next ten years are crucial.” This is what it says in a study by the consulting firm, Heuss was a co-author. Accordingly, it takes a total of around six trillion euros of climate-friendly investments to make Germany climate-neutral by 2045. Of this, however, five trillion euros are replacement investments that are due anyway, with one trillion euros on top.
But this is offset by economic gains: falling energy costs, for example, new markets and new jobs. The bottom line, says the study, is that the path to climate neutrality can be achieved in a cost-neutral way – “at net-zero costs for society as a whole”. If the path is taken quickly.
It’s still quite a long way. Before the pandemic and the economy also sent greenhouse gas emissions downhill, Germany was emitting a good 800 million tons of greenhouse gases a year. Industry alone accounted for 187 million tons of this – which was pretty much the same as in 2010. So in the past decade, next to nothing has happened in the industry. Where did the optimism suddenly come from?
Strict climate requirements can become disadvantages in competition
It is mainly based on new technologies. If steel is not made with coke, but with hydrogen, and if this hydrogen is produced from renewable energy – then steel is also climate-neutral. Around 30 percent of German industrial emissions fell this flat. All sorts of other industries can be freed of their footprint with renewable electricity and green hydrogen, including chemistry. “Nobody has to berace to zero‘be convinced, “says Roland Harings, head of the metals specialist Aurubis.” It will turn into a competitive advantage. “However, an appropriate framework would also be needed quickly.
For example, external protection: the stricter the climate regulations in the EU, the more likely they could lead to disadvantages in competition – for example, because cheaper, dirty steel is easier to sell than more climate-friendly. The EU is therefore toying with a border adjustment mechanism: For example, imports would be charged a surcharge for their CO₂ footprint, which is based, for example, on the prices in European emissions trading: It gives a price to every ton of CO₂. If Europe’s industry were to be completely subjected to this trade, the conditions of competition would be the same again, and this would probably even be in accordance with the rules of the World Trade Organization.
There is also talk of compensation for those who invest in new technologies and thus have higher production costs. The state could assume these additional costs through so-called differential cost contracts – and thus help new technologies to break through.
None of this will be a walk. Apart from the fact that not all trading partners are enthusiastic about border adjustment mechanisms, that differential cost contracts cost a lot of money and there are pilot projects for many of the new technologies, but hardly any large-scale applications – the republic is also facing a series of heated discussions.
Dominik vonhaben, head of Heidelberg-Cement, wants to trim the group towards more climate protection.
(Photo: Heidelberg Cement)
In some areas, for example, it will hardly be possible to achieve climate neutrality if carbon dioxide is not artificially split off and stored underground. But this procedure – the English abbreviation is called CCS – was effectively banned in Germany a few years ago: resistance against CCS had formed everywhere in the country. However, also because environmentalists wanted to prevent this from only extending the life of the coal. But that is over with the coal phase-out.
One who would have to rely on the technology is Dominik vonhaben, the head of Heidelberg-Cement. Around 20 million tons of CO₂ are due to CO₂-intensive cement production in this country. “CCS is crucial here,” says vonhaben. He too wants to bring his company on a climate course, his company wants to be “part of the solution”. “After the decade of setting goals,” says vonhaben, “now comes the decade of implementation.”