Think tanks call for second 'Economic Miracle' to reach climate neutrality by 2050
Germany can become greenhouse gas-neutral by the middle of the century if it pursues a comprehensive investment programme that focuses on renewable energy expansion together with the electrification of the transport, heating and industry sectors, a study entitled “Climate-neutral Germany” commissioned by think tanks Agora Energiewende*, Agora Verkehrswende* and the Foundation for Climate Neutrality (Stiftung Klimaneutralität) shows. An “investment push comparable to the German Wirtschaftwunder (economic miracle)," an era of extremely high economic growth and rapid technologic modernisation after the Second World War in the 1950s and 1960s, would be necessary to revamp the country’s energy and industrial system, Patrick Graichen, head of Agora Energiewende, said at a press conference in Berlin.
Likewise, the intermediate target for emission reductions by 2030 must be increased from the current 55 to 65 percent, Graichen said. With this higher commitment, Germany would also fulfil its share of emission reductions necessary under a new EU 2030 climate target of minus 55 percent, which is currently pondered by EU institutions.
The study, which was conducted by researchers from the Wuppertal Institute for Climate, Environemnt and Energy, by consultancy Prognos and by the Institute of Applied Ecology (Öko-Institut), calculates the reduction targets, energy production and technological changes that are deemed necessary to achieve climate neutrality by 2030 and looks at the requisite investment decisions.
Anton Hofreiter, head of the Green Party parliamentary group said the study shows that the German government was not on track in almost any area, including renewable energy expansion, the coal-phase out, transport, building renovation and agriculture. “The study is a mandate to the government to finally make improvements in its climate action programmes,” he said in a press release.
Keystone: More renewable electricity
The keystone to a climate-neutral economy is an adequate supply of renewable energy sources, Graichen said. As a first step, this means that the share of renewables in Germany’s power consumption has to rise to 70 percent by 2030 instead of the current government target of 65 percent. By 2050, the need for electricity would go up by 50 percent due to the electrification of the transport and heating sectors and hydrogen production. The government’s draft for a new renewable energy law (EEG) is not up to the job at all, bearing in mind that having a sufficient amount of renewable electricity would be a matter of securing Germany’s industry competitiveness and economic wellbeing, he argued. “From now on we are in a race between regions to see who can provide the technologies of the future,” he added. To reduce emissions from the energy sector, coal power should be phase-out by 2030 instead of 2038, the study said.
Info box: Scenarios of the climate neutrality study
The energy sector can reduce 207 million tonnes of CO2 annually, nearly half of what is required to meet the corresponding 2030 reduction of 420 million tonnes. This would have to include:
- Increase onshore wind capacity to 80 GW (currently 54 GW)
- Increase offshore wind capacity to 25 GW (currently 8 GW)
- Increase solar PV capacity to 150 GW (currently 50 GW)
- Phase-out coal power by 2030
By 2030, there will have to be around 14 million electric cars on the road. A rapid electrification of freight transport is needed. By 2030, around a third of road-freight kilometres need to be electric, primarily via overhead lines for catenary trucks and batteries. By 2050, the scenario shows that batteries, overhead lines, and fuel cells will each cover about one third of road freight traffic. At the same time, the importance of rail has to be growing. The capacity of rail freight traffic must increase by 44 percent by 2030, while road freight traffic grows only slightly.
Synthetic fuels made from electricity will only gradually be used in transport after 2030, especially in air and sea transport.
Transport increasingly has to shift to buses, trains, walking and cycling. Passenger transport by bus and train must almost double by 2035, while that by cars has to decrease by 11 percent by 2030 and by 30 percent by 2050.
Around half of the blast furnaces in Germany will reach the end of their service lives by 2030; such plants could drastically reduce their carbon emissions by using hydrogen instead of coking coal.
By 2050, hydrogen will also gradually replace natural gas. The study assumes that about three quarters of the hydrogen required in Germany will be imported.
Cement production, for example, always generates CO2 when lime is burned. To neutralize such emissions, carbon capture and storage (CCS) has to be used. In combination with the use of biomass, the introduction of CCS technology around 2030 will also become unavoidable to compensate for other residual emissions, for example in agriculture.
The scenario includes a complete retrofitting of the building stock by 2050, always assuming the most efficient use of electricity for heating. For example, they prefer heat pumps to gas heating systems because heat pumps consume around five times less electricity than is needed to generate the same thermal energy from synthetic gas produced electrically. As early as 2030, six million buildings in Germany will have to have heat pumps according to these assumptions.
In agriculture, the main aim for 2030 is to reduce methane emissions from liquid manure – for example, through fermentation in biogas plants – and to cultivate more crops with lower nitrogen requirements. In addition, methane emissions from livestock farming can be lowered by reducing animal numbers. Starting in 2050, unavoidable emissions from agriculture need to be offset by CCS in combination with bioenergy (BECCS).
“It is cheaper to save the world than to ruin it'
Former state secretary in the economy ministry Rainer Baake, now head of the Foundation for Climate Neutrality, said that their plan was “cost-optimised” to reach the climate neutrality target. He said it was futile to think about whether a business-as-usual scenario would be cheaper since the Paris Agreement had made clear that such a scenario was out of the question. And as renewables are now cheaper than fossil energy sources, “it is cheaper to save the world than to ruin it,” he said. In the future, German consumers would use electric heating systems and electric vehicles and if the system of taxes and levies is changed in line with these aims, they would not face extra costs, Graichen said. Referring to a study conducted by the industry association BDI, Graichen said their 95 percent greenhouse gas reduction scenario would require around 70 billion euros in green investment per year, around 10 percent of Germany’s annual gross investment. “This is really not a problem for Germany,” he said.
Problem child: Transport sector
While Germany has achieved an overall reduction in greenhouse gases of 36 percent (in 2019 compared to 1990) and, for example, the energy industry reduced its emissions by 32 percent, the transport sector’s emissions remain on the same level as 30 years ago. “This means we have to up our targets for the transport sector, we need to accelerate the sale of e-cars and by 2030 we need 14 million electric passenger cars on the roads, not 10 million like the government plans,” Agora Verkehrswende’s Christian Hochfeld said. Achieving the climate targets in the transport and automobile sectors was also a matter of securing the competitiveness of the German car industry, particularly in the light of efforts made in China and California, he said.
Hydrogen is the „very expensive champagne” of the energy transition
The study acknowledges that climate neutrality won’t be feasible without the use of hydrogen. “But we will only use it where there are no alternatives, because hydrogen is the very expensive champagne of the energy transition,” Baake said. It is much cheaper to use electricity directly in cars and heat pumps instead of taking the costly detour of using electricity to create hydrogen and synthetic fuels, the study concludes. Hydrogen would be needed to run back-up power stations in the event of low supply of wind and solar electricity, Baake said. “We will not have unlimited access to this resource, hydrogen will become a very expensive commodity,” he added. In their model, two-thirds of hydrogen would be imported to Germany, while one third would be generated domestically.
Comparison with Fridays for Future study
The three think tanks that presented the plan were not the first to publish their vision for Germany’s path to climate neutrality. A study commissioned by the Fridays for Future movement made headlines last week for declaring that Germany would have to reach CO2 neutrality by 2035 if it wanted to stick to a warming limit of 1.5°C. The heads of the three think tanks pointed out that their target of greenhouse gas neutrality by 2050 was in line with the Paris Agreement’s goal of keeping global temperature rise to “well below 2°C” and that several assumptions, such as how much greenhouse gas reduction had to come from industrialised countries as well as the difference between “CO2 neutrality” and “greenhouse gas or climate neutrality,” explained the differences in their findings.
“In the end, both studies come to the same conclusion: we need a lot more renewable energies,” Graichen said.
CCS included / Farming largest emitter in 2050 / Forest and soils not a reliable sink
The study covers the use of carbon capture and storage (CCS) to alleviate remaining industry emissions, for example from cement. The authors didn’t use Germany’s forests and soils as a carbon sink in their calculations because their condition was impossible to judge when it comes to their CO2 uptake, not least because of the effects caused by climate change itself.
By 2050, the scenario shows that the farming sector will be the main emitter with 44 million tonnes of CO2 equivalent. While the study assumes that eating habits in Germany will not change, Graichen said that it was certainly worth thinking about changes to farming practices and livestock farming to reduce these emissions further.