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News from 2021-03-03 / KfW Research

Transitioning to climate neutrality by 2050: a major challenge for German industry

With Germany and Europe aiming for climate neutrality, German industry needs to undergo a structural transformation to become greenhouse gas-neutral by 2050. The transformation is technically feasible. But implementation is a great challenge given the need for investment in new production processes and the additional renewable energy and green hydrogen production capacities that have to be created. At the same time, the greening of the economy provides considerable opportunities for future value creation and employment. In order for the technologies required for the decarbonisation of industry to achieve broad market penetration, policy frameworks and financial incentives need to be put in place. Compensation mechanisms for energy-intensive businesses that compete internationally (protection from carbon leakage) will increase acceptance of the transformation.

Transitioning to climate neutrality by 2050: a major challenge for German industry

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