Preview 2023: EU taxonomy’s implementation must deliver push for sustainable finance – researcher
This interview is part of a series to preview the German and European energy and climate policy in 2023.
Energy and climate policy in 2022 was dominated by Russia's war on Ukraine and the European energy crisis. What impact do you expect the war to have in 2023, and which other topics will likely dominate the agenda in your sector?
Energy prices will remain much higher in the new year than in the past years. On the one hand, the rising costs of fossil energies will serve as an incentive for investments in energy efficiency and renewables. On the other hand, investment costs are generally increasing. In addition, higher interest rates also curb long-term investments, for example in the energy-efficient modernisation of buildings. However, improvements in the buildings sector are very much needed, especially for the least efficient buildings. It’s necessary to create incentives that unleash these investments in spite of all these obstacles.
Chancellor Scholz's traffic light coalition has just finished its first year in office - what do you think the administration got right so far and what does it have to deliver on most urgently next year?
Despite the disruptions on energy markets, the coalition has managed to secure supply stability. Moreover, the one-off payments in 2022 and the gas and electricity price caps in 2023 provide important and necessary support. Since the cap only covers a part of consumption levels in previous years, it retains equally important incentives to save energy. What’s also a plus is that the government reduced bureaucratic hurdles for roof-mounted solar power installations and ended the support of gas-fired heating systems. Yet, more measures are needed to facilitate investments in renewables and energy-efficient modernisation. An even bigger focus on long-term energy consumption reduction is needed in the new year.
Which topics have been overshadowed by the crisis in 2022 and should receive more attention in the new year?
Sustainable finance, meaning the supporting role financial markets can play in building a more sustainable economy, has received scant attention in the outgoing year. But the financial sector, of course, still plays a central role. It’s necessary for companies and banks to present transparent and comprehensible strategies on how they plan to reach their sustainability targets. In 2023, this especially concerns implementing the EU taxonomy’s regulation on disclosure. Uniform data for sustainability reporting should be considered in all areas of the financial industry, for example in risk management and in strategic investment planning.