Synthetic fuels are the Holy Grail of decarbonization: Everyone eagerly awaits this miracle substance to heat, drive or fly in a climate-neutral way. But as it goes with the Grail, many obstacles lurk on the way to it. In Germany, the planned production of climate-neutral aviation fuel is currently being hindered by massive cuts in the federal budget and significant technical difficulties, as researched by the Climate.Table team.
This illustrates how wise the decision was that we are implementing starting today: to be published twice a week. From now on, every Tuesday and Thursday, you will find features, news, opinions and the usual deep dives from the worlds of economics, science and politics surrounding the climate crisis. In today’s issue, we also take a look back at the security conference in Munich, a glimpse into the future of the EU’s Green Deal and many side glances at developments around the world.
The planned and ongoing production of climate-friendly aviation fuel in Germany is currently struggling to make progress. Technical and financial hurdles are holding back this crucial project for the future of air travel. The aviation industry is outraged. Meanwhile, a flagship project for synthetic aviation fuel is being delayed due to major technical problems.
In the 2024 federal budget, massive cuts were made to renewable fuels due to savings in the Climate and Transformation Fund (KTF): Three different titles were originally allocated a total of 3.3 billion euros for the development and production of renewable fuels and propulsion technologies for aviation for the current and coming years. In the just-passed budget, only 505 million euros remain. This represents an 85 percent reduction.
One of the hardest-hit areas is Title 89204, “Promotion of generation plants for electricity-based fuels and advanced biofuels, as well as propulsion technologies for aviation,” managed by the Ministry of Transport. Originally, 2.16 billion euros were earmarked for the coming years. This is now practically being discontinued, with only 60 million euros in previously committed funds remaining.
Similarly, for the second major item under the German Ministry of Transport, Title 68625, “Development of renewable fuels,” much less money is planned for the coming years: Out of 834 million euros, only 170 million remain – which the ministry considers a success, considering that there was almost a complete cut in the budget at one point. On the other hand, Title 68305, “Climate-neutral flying,” managed by the Ministry for Economic Affairs and Climate Action, remains largely intact, with a total of 275 million euros allocated.
There are also technical problems: The first German project for the production of synthetic aviation fuel, which was supposed to start production in the Emsland in 2023, is behind schedule due to technical core components such as electrolysis and fuel synthesis not functioning properly.
The facility in Werlte was supposed to begin industrial-scale production of green crude kerosene from water and local wind and solar installations with CO2 from a biogas plant and its own direct air capture (DAC) facility shortly after commissioning in the fall of 2021. The crude kerosene was then to be delivered to a refinery, refined into Jet A1, and used as E-fuel at Hamburg Airport. The project company belongs to Atmosfair, a platform dedicated to promoting climate-friendly aviation and has introduced a climate impact calculator for compensation.
However, technical problems and disputes over deficiencies with the manufacturers have delayed the project. “These are problems that arise when transitioning a project from the pilot phase to industrial production,” says Atmosfair CEO Dietrich Brockhagen. Now, 100 tons of E-fuel are planned to be produced this year, with the double amount targeted for 2025.
Sustainable aviation fuels (SAFs) are defined as any fuels that are not based on fossils. However, the term is used differently and often excessively, for example, for small amounts of blends with fossil kerosene. According to the EU initiative “ReFuelEU Aviation” as part of the “Fit for 55” package, fuel providers must increase the share of sustainable aviation fuels to two percent by 2025 – reaching 70 percent by 2050.
E-kerosene, also known as synthetic kerosene, is fuel synthesized using CO2 and renewable energy. It is classified as SAF but has its own goals in the ReFuelEU Aviation Regulation: 1.2 percent by 2030 and 35 percent by 2050. Germany has even set a goal of achieving 0.5 percent e-kerosene by 2026. According to a study by the NGO Transport and Environment, Germany, along with Norway and France, is on a good path to build up the necessary e-kerosene production. However, the budget crisis has now intervened.
The reduction in funding hits the projects at a critical point: “Unfortunately, the planned ramp-up of production of electricity-based SAF (e-kerosene) has just been thwarted by the complete cut of funds in the federal budget,” commented Siegfried Knecht. He represents Airbus on the Board of the Aviation Initiative for Renewable Energy in Germany e. V. (Aireg), a consortium of aircraft manufacturers, SAF producers, airlines, start-ups and research institutes. Despite the lack of public support, Aireg and its members hope for “pioneering investment decisions for e-kerosene”.
The industry “committed around three billion euros to research and development in Germany in 2022,” says Knecht. “The industry expects reliable support for CO2-neutral flying from politics and overall long-term stable framework conditions.” This is especially true for SAF.
There are currently four major industrial projects for e-kerosene in Germany. For the largest one, involving DHL, HH2E AG, and the South African oil and chemical company Sasol, no location has been determined yet. The other three projects (Concrete Chemicals, Jangada and Hykero), currently being developed in Berlin, Brandenburg and Leipzig, are looking for investors. The management of the Hykero project planned in Leipzig speaks of “less than ideal conditions”. Nonetheless, they plan to start the project realization in the first half of the year and begin production in early 2028.
The demand for climate-friendly kerosene is enormous. Aviation is growing. The International Air Transport Association estimates that 4.7 billion people will fly this year, more than ever before. When considering the climate impact of CO2, nitrogen oxides and water vapor together, aviation contributes at least 3.5 percent to climate change. The industry must and wants to become greenhouse gas neutral by 2045, but compared to other sectors, decarbonizing aviation is much more challenging.
Siegfried Knecht of Aireg emphasizes: “Climate-neutral flying” will not be possible in the foreseeable future; instead, we must speak of “reducing the climate impact” of aviation. Even if aviation cannot yet be called climate-friendly in the coming years, investments must be made today in the corresponding transformation.
Marte van der Graaf, aviation expert at the NGO Transport and Environment, sees greater potential for e-kerosene among alternative aviation fuels. “However, airlines are currently pinning their hopes on biofuels,” she says. Biofuels are currently the cheapest solution but are only available in limited quantities. “Biofuels are mostly made from waste and are therefore not scalable and vulnerable to fraud with products falsely declared as waste.”
In the realm of electric flying, the company Eviation (Israel/USA) successfully conducted the maiden flight of a fully electric passenger aircraft in the fall of 2022. “Alice” remained airborne for eight minutes. DHL has already pre-ordered twelve units of this model. The range is expected to be just over 450 kilometers.
Range is also the crucial factor why electric propulsion cannot replace conventional engines anytime soon. Developers and manufacturers are focusing on short-haul flights. For example, by 2026, the Norwegian regional airline Widerøe plans to deploy an electric propeller aircraft with two electric motors from Rolls-Royce.
According to a Swedish study, a fully electric aircraft has significant advantages in its life cycle analysis (LCA). According to the study, the climate damages of the electric aircraft are already lower than those of fossil fuel-based aircraft after a quarter of the expected lifespan, provided it is flown with green electricity. However, the flip side is the increasing scarcity of resources for lithium-ion batteries.
Another alternative propulsion method, which is currently also in the political spotlight, is hydrogen. The Ministry for Economic Affairs and Climate Action is funding the testing of disruptive hydrogen technologies in a flying test laboratory with 45 million euros. The first research projects are planned to start in the spring of 2025. Marte van der Graaf of Transport and Environment demands that aircraft manufacturers also explore hydrogen – it is currently an economically promising alternative. However, she emphasizes that until at least 2030, the only green flight is the one that remains on the ground. with Bernhard Pötter, Malte Kreutzfeldt
Non-military threats to national security, such as food security issues or climate change, were on the agenda at the 60th Munich Security Conference. However, they were overshadowed by acute conflicts in Ukraine and the Middle East. Representatives of civil society and international organizations expressed this concern in discussions with Table.Media following the event on Sunday.
For example, food security was not revisited on the final day of the conference. Additionally, the climate crisis as a driver of global and local crises did not take center stage at the Bayerischer Hof, even though it was mentioned in the concluding panel “No time to lose: a geopolitical outlook ahead in 60 years”. Instead, conference planners focused on the future of the European Union, with four panels dedicated to the topic.
Concerns about food supply were not adequately addressed at the Munich Security Conference, according to Norwegian Minister for International Development Anne Beathe Tvinnereim. Directly from the African Union summit in Addis Ababa, she traveled to the Bavarian capital and was surprised by how discussions among representatives of Western industrial powers lagged behind those in many African countries. “Food security is a matter of national security for us,” a minister of agriculture in Ethiopia told her, which opened her eyes.
Yet, Tvinnereim also sees progress. Just a year ago, food security received far less attention at the MSC than at the anniversary conference. For example, on the first day, the panels “Food intelligence: food insecurity as a predictive indicator” and “High from their own supply: major power competition and supply chain dependencies” made it into the main program.
Today, there are far more representatives from aid and non-governmental organizations, UN agencies, and the Global South in Munich than in the past. This has significantly changed the heavily militarized character of the meeting founded in 1964 as a military conference.
Green security policy spokeswoman Agnieszka Brugger found it appropriate that the Israeli-Palestinian relationship was prominently discussed on the final day. “From security conference to security conference, the situation becomes more serious,” said the Deputy Parliamentary Group Leader of the Greens in the Bundestag to Table.Media. At the same time, she emphasized, “Security is more than just military,” and it includes “many areas, ranging from new technologies like artificial intelligence to disinformation, food and climate security and development cooperation”.
Including Global South states and looking beyond the transatlantic relationship that has characterized Munich for the past decades has been successful for the organizers, said representatives of the World Bank and the World Food Programme, with whom Table.Media spoke at the conference. Mads Christensen, Executive Director of Greenpeace, was more critical: “There is a lot of talk about classic topics and little about food and other forms of human security. By now, everyone should realize that climate change is a security issue.”
Only through collaboration with various actors from civil society, the Global South and progressive forces in business and politics can a common understanding be developed of “what people actually need to feel safe. It’s not just about the absence of armed conflicts,” explained Christensen.
Achim Steiner, United Nations Under-Secretary-General and Administrator of the United Nations Development Programme (UNDP), emphasized that, given global military spending of over two trillion US dollars, it is legitimate to question how these costs have actually contributed to risk reduction. “A discussion about more development cooperation to mitigate risks is just as legitimate as the discussion about whether we need more finances for defense,” he said in an interview with Table.Media.
This question also troubles Norway’s Minister for International Development Tvinnereim – even though, unlike many other wealthy OECD member states, the Oslo government manages to reach the goal of 0.7 percent of gross national income in official development assistance; the NATO’s two percent target will only be fulfilled by 2026. For Tvinnereim, this is not a contradiction but an expression of a potentially forward-thinking concept of global burden-sharing: “Defense plus development equals security,” she summed it up.
Intentions are important, but actions are crucial. The European Green Deal is the EU’s central instrument for achieving its climate goals. It aims to make the Union’s economy fairer, wealthier, and more sustainable. Recently, the European Commission announced its climate targets for 2040 – aiming to reduce greenhouse gas emissions by 90 percent.
While the EU sees itself as a leader in climate transformation, companies based here are seeking production opportunities outside Europe. Our supposed leadership in climate action is thus called into question. The Green Deal, primarily based on regulation, risks overwhelming companies with bureaucratic challenges and prohibitions. In contrast, countries like the United States primarily rely on incentives, such as initiatives like the Inflation Reduction Act (IRA), to foster innovation and drive a more sustainable economy.
Europe must, therefore, intensify its efforts – and has two concrete levers to boost sustainable economic activities. This way, we can actively reduce emissions and build European champions in climate technology.
Business decisions on expansion, whether to build new factories, and creating new jobs are based on the economic viability of the project. It is, therefore, essential for the EU to follow this logic. The “deal” as part of the “Green Deal” must be implemented based on an attractive business model.
To make the deal a reality, the EU is introducing the Net-Zero Industry Act (NZIA), Europe’s answer to the IRA. It is a key initiative to reduce emissions and scale up green technologies. By speeding up approval processes and reducing bureaucracy, we enhance Europe’s competitiveness.
The NZIA is Europe’s first strong lever to drive a successful clean transition to climate neutrality. The agreement reached between the European Parliament and the Council on the NZIA covers a wide range of net-zero technologies. It is now crucial for EU lawmakers to swiftly approve this agreement.
A strong NZIA creates a lean and stable regulatory environment for businesses to develop accordingly.
The second key instrument for the EU to promote investments in clean technologies and thereby reduce emissions is taxonomy. However, its effectiveness in its current form is limited.
Firstly, the implementation of taxonomy is too complex, narrowly defined and slow. The relevant legal documents consist of over 600 pages of detailed criteria, making it difficult for companies to understand and implement the requirements. Furthermore, it only lists “successful” activities from the past, as innovation, by definition, cannot be part of such a list. We propose a continuous and rapid updating mechanism for the list to incorporate the latest clean innovations.
In Germany, as well as in Europe as a whole, we see companies scaling their solutions in the US and Asia due to more favorable conditions. A sustainable, competitive economy is Europe’s opportunity to combine ambitious climate action with strong economic performance.
We are convinced: Climate champions must emerge from Europe and translate excellent research into strong companies. The NZIA is a good example of how Europe must implement the Green Deal: Once in force, it will help companies scale and stimulate private investment.
Economic prosperity and jobs emerge where market conditions are favorable – this explicitly requires a simple, harmonized regulatory environment. The NZIA and taxonomy are two important levers for Europe – if we design them correctly.
Angelika Niebler is a Member of the European Parliament for the CSU and serves, among other roles, on the Committee on Industry, Research, and Energy of the European Parliament. Andreas Sichert is the CEO of Orcan Energy. The company offers modules that convert waste heat into electricity.
Synthetic fuels are the Holy Grail of decarbonization: Everyone eagerly awaits this miracle substance to heat, drive or fly in a climate-neutral way. But as it goes with the Grail, many obstacles lurk on the way to it. In Germany, the planned production of climate-neutral aviation fuel is currently being hindered by massive cuts in the federal budget and significant technical difficulties, as researched by the Climate.Table team.
This illustrates how wise the decision was that we are implementing starting today: to be published twice a week. From now on, every Tuesday and Thursday, you will find features, news, opinions and the usual deep dives from the worlds of economics, science and politics surrounding the climate crisis. In today’s issue, we also take a look back at the security conference in Munich, a glimpse into the future of the EU’s Green Deal and many side glances at developments around the world.
The planned and ongoing production of climate-friendly aviation fuel in Germany is currently struggling to make progress. Technical and financial hurdles are holding back this crucial project for the future of air travel. The aviation industry is outraged. Meanwhile, a flagship project for synthetic aviation fuel is being delayed due to major technical problems.
In the 2024 federal budget, massive cuts were made to renewable fuels due to savings in the Climate and Transformation Fund (KTF): Three different titles were originally allocated a total of 3.3 billion euros for the development and production of renewable fuels and propulsion technologies for aviation for the current and coming years. In the just-passed budget, only 505 million euros remain. This represents an 85 percent reduction.
One of the hardest-hit areas is Title 89204, “Promotion of generation plants for electricity-based fuels and advanced biofuels, as well as propulsion technologies for aviation,” managed by the Ministry of Transport. Originally, 2.16 billion euros were earmarked for the coming years. This is now practically being discontinued, with only 60 million euros in previously committed funds remaining.
Similarly, for the second major item under the German Ministry of Transport, Title 68625, “Development of renewable fuels,” much less money is planned for the coming years: Out of 834 million euros, only 170 million remain – which the ministry considers a success, considering that there was almost a complete cut in the budget at one point. On the other hand, Title 68305, “Climate-neutral flying,” managed by the Ministry for Economic Affairs and Climate Action, remains largely intact, with a total of 275 million euros allocated.
There are also technical problems: The first German project for the production of synthetic aviation fuel, which was supposed to start production in the Emsland in 2023, is behind schedule due to technical core components such as electrolysis and fuel synthesis not functioning properly.
The facility in Werlte was supposed to begin industrial-scale production of green crude kerosene from water and local wind and solar installations with CO2 from a biogas plant and its own direct air capture (DAC) facility shortly after commissioning in the fall of 2021. The crude kerosene was then to be delivered to a refinery, refined into Jet A1, and used as E-fuel at Hamburg Airport. The project company belongs to Atmosfair, a platform dedicated to promoting climate-friendly aviation and has introduced a climate impact calculator for compensation.
However, technical problems and disputes over deficiencies with the manufacturers have delayed the project. “These are problems that arise when transitioning a project from the pilot phase to industrial production,” says Atmosfair CEO Dietrich Brockhagen. Now, 100 tons of E-fuel are planned to be produced this year, with the double amount targeted for 2025.
Sustainable aviation fuels (SAFs) are defined as any fuels that are not based on fossils. However, the term is used differently and often excessively, for example, for small amounts of blends with fossil kerosene. According to the EU initiative “ReFuelEU Aviation” as part of the “Fit for 55” package, fuel providers must increase the share of sustainable aviation fuels to two percent by 2025 – reaching 70 percent by 2050.
E-kerosene, also known as synthetic kerosene, is fuel synthesized using CO2 and renewable energy. It is classified as SAF but has its own goals in the ReFuelEU Aviation Regulation: 1.2 percent by 2030 and 35 percent by 2050. Germany has even set a goal of achieving 0.5 percent e-kerosene by 2026. According to a study by the NGO Transport and Environment, Germany, along with Norway and France, is on a good path to build up the necessary e-kerosene production. However, the budget crisis has now intervened.
The reduction in funding hits the projects at a critical point: “Unfortunately, the planned ramp-up of production of electricity-based SAF (e-kerosene) has just been thwarted by the complete cut of funds in the federal budget,” commented Siegfried Knecht. He represents Airbus on the Board of the Aviation Initiative for Renewable Energy in Germany e. V. (Aireg), a consortium of aircraft manufacturers, SAF producers, airlines, start-ups and research institutes. Despite the lack of public support, Aireg and its members hope for “pioneering investment decisions for e-kerosene”.
The industry “committed around three billion euros to research and development in Germany in 2022,” says Knecht. “The industry expects reliable support for CO2-neutral flying from politics and overall long-term stable framework conditions.” This is especially true for SAF.
There are currently four major industrial projects for e-kerosene in Germany. For the largest one, involving DHL, HH2E AG, and the South African oil and chemical company Sasol, no location has been determined yet. The other three projects (Concrete Chemicals, Jangada and Hykero), currently being developed in Berlin, Brandenburg and Leipzig, are looking for investors. The management of the Hykero project planned in Leipzig speaks of “less than ideal conditions”. Nonetheless, they plan to start the project realization in the first half of the year and begin production in early 2028.
The demand for climate-friendly kerosene is enormous. Aviation is growing. The International Air Transport Association estimates that 4.7 billion people will fly this year, more than ever before. When considering the climate impact of CO2, nitrogen oxides and water vapor together, aviation contributes at least 3.5 percent to climate change. The industry must and wants to become greenhouse gas neutral by 2045, but compared to other sectors, decarbonizing aviation is much more challenging.
Siegfried Knecht of Aireg emphasizes: “Climate-neutral flying” will not be possible in the foreseeable future; instead, we must speak of “reducing the climate impact” of aviation. Even if aviation cannot yet be called climate-friendly in the coming years, investments must be made today in the corresponding transformation.
Marte van der Graaf, aviation expert at the NGO Transport and Environment, sees greater potential for e-kerosene among alternative aviation fuels. “However, airlines are currently pinning their hopes on biofuels,” she says. Biofuels are currently the cheapest solution but are only available in limited quantities. “Biofuels are mostly made from waste and are therefore not scalable and vulnerable to fraud with products falsely declared as waste.”
In the realm of electric flying, the company Eviation (Israel/USA) successfully conducted the maiden flight of a fully electric passenger aircraft in the fall of 2022. “Alice” remained airborne for eight minutes. DHL has already pre-ordered twelve units of this model. The range is expected to be just over 450 kilometers.
Range is also the crucial factor why electric propulsion cannot replace conventional engines anytime soon. Developers and manufacturers are focusing on short-haul flights. For example, by 2026, the Norwegian regional airline Widerøe plans to deploy an electric propeller aircraft with two electric motors from Rolls-Royce.
According to a Swedish study, a fully electric aircraft has significant advantages in its life cycle analysis (LCA). According to the study, the climate damages of the electric aircraft are already lower than those of fossil fuel-based aircraft after a quarter of the expected lifespan, provided it is flown with green electricity. However, the flip side is the increasing scarcity of resources for lithium-ion batteries.
Another alternative propulsion method, which is currently also in the political spotlight, is hydrogen. The Ministry for Economic Affairs and Climate Action is funding the testing of disruptive hydrogen technologies in a flying test laboratory with 45 million euros. The first research projects are planned to start in the spring of 2025. Marte van der Graaf of Transport and Environment demands that aircraft manufacturers also explore hydrogen – it is currently an economically promising alternative. However, she emphasizes that until at least 2030, the only green flight is the one that remains on the ground. with Bernhard Pötter, Malte Kreutzfeldt
Non-military threats to national security, such as food security issues or climate change, were on the agenda at the 60th Munich Security Conference. However, they were overshadowed by acute conflicts in Ukraine and the Middle East. Representatives of civil society and international organizations expressed this concern in discussions with Table.Media following the event on Sunday.
For example, food security was not revisited on the final day of the conference. Additionally, the climate crisis as a driver of global and local crises did not take center stage at the Bayerischer Hof, even though it was mentioned in the concluding panel “No time to lose: a geopolitical outlook ahead in 60 years”. Instead, conference planners focused on the future of the European Union, with four panels dedicated to the topic.
Concerns about food supply were not adequately addressed at the Munich Security Conference, according to Norwegian Minister for International Development Anne Beathe Tvinnereim. Directly from the African Union summit in Addis Ababa, she traveled to the Bavarian capital and was surprised by how discussions among representatives of Western industrial powers lagged behind those in many African countries. “Food security is a matter of national security for us,” a minister of agriculture in Ethiopia told her, which opened her eyes.
Yet, Tvinnereim also sees progress. Just a year ago, food security received far less attention at the MSC than at the anniversary conference. For example, on the first day, the panels “Food intelligence: food insecurity as a predictive indicator” and “High from their own supply: major power competition and supply chain dependencies” made it into the main program.
Today, there are far more representatives from aid and non-governmental organizations, UN agencies, and the Global South in Munich than in the past. This has significantly changed the heavily militarized character of the meeting founded in 1964 as a military conference.
Green security policy spokeswoman Agnieszka Brugger found it appropriate that the Israeli-Palestinian relationship was prominently discussed on the final day. “From security conference to security conference, the situation becomes more serious,” said the Deputy Parliamentary Group Leader of the Greens in the Bundestag to Table.Media. At the same time, she emphasized, “Security is more than just military,” and it includes “many areas, ranging from new technologies like artificial intelligence to disinformation, food and climate security and development cooperation”.
Including Global South states and looking beyond the transatlantic relationship that has characterized Munich for the past decades has been successful for the organizers, said representatives of the World Bank and the World Food Programme, with whom Table.Media spoke at the conference. Mads Christensen, Executive Director of Greenpeace, was more critical: “There is a lot of talk about classic topics and little about food and other forms of human security. By now, everyone should realize that climate change is a security issue.”
Only through collaboration with various actors from civil society, the Global South and progressive forces in business and politics can a common understanding be developed of “what people actually need to feel safe. It’s not just about the absence of armed conflicts,” explained Christensen.
Achim Steiner, United Nations Under-Secretary-General and Administrator of the United Nations Development Programme (UNDP), emphasized that, given global military spending of over two trillion US dollars, it is legitimate to question how these costs have actually contributed to risk reduction. “A discussion about more development cooperation to mitigate risks is just as legitimate as the discussion about whether we need more finances for defense,” he said in an interview with Table.Media.
This question also troubles Norway’s Minister for International Development Tvinnereim – even though, unlike many other wealthy OECD member states, the Oslo government manages to reach the goal of 0.7 percent of gross national income in official development assistance; the NATO’s two percent target will only be fulfilled by 2026. For Tvinnereim, this is not a contradiction but an expression of a potentially forward-thinking concept of global burden-sharing: “Defense plus development equals security,” she summed it up.
Intentions are important, but actions are crucial. The European Green Deal is the EU’s central instrument for achieving its climate goals. It aims to make the Union’s economy fairer, wealthier, and more sustainable. Recently, the European Commission announced its climate targets for 2040 – aiming to reduce greenhouse gas emissions by 90 percent.
While the EU sees itself as a leader in climate transformation, companies based here are seeking production opportunities outside Europe. Our supposed leadership in climate action is thus called into question. The Green Deal, primarily based on regulation, risks overwhelming companies with bureaucratic challenges and prohibitions. In contrast, countries like the United States primarily rely on incentives, such as initiatives like the Inflation Reduction Act (IRA), to foster innovation and drive a more sustainable economy.
Europe must, therefore, intensify its efforts – and has two concrete levers to boost sustainable economic activities. This way, we can actively reduce emissions and build European champions in climate technology.
Business decisions on expansion, whether to build new factories, and creating new jobs are based on the economic viability of the project. It is, therefore, essential for the EU to follow this logic. The “deal” as part of the “Green Deal” must be implemented based on an attractive business model.
To make the deal a reality, the EU is introducing the Net-Zero Industry Act (NZIA), Europe’s answer to the IRA. It is a key initiative to reduce emissions and scale up green technologies. By speeding up approval processes and reducing bureaucracy, we enhance Europe’s competitiveness.
The NZIA is Europe’s first strong lever to drive a successful clean transition to climate neutrality. The agreement reached between the European Parliament and the Council on the NZIA covers a wide range of net-zero technologies. It is now crucial for EU lawmakers to swiftly approve this agreement.
A strong NZIA creates a lean and stable regulatory environment for businesses to develop accordingly.
The second key instrument for the EU to promote investments in clean technologies and thereby reduce emissions is taxonomy. However, its effectiveness in its current form is limited.
Firstly, the implementation of taxonomy is too complex, narrowly defined and slow. The relevant legal documents consist of over 600 pages of detailed criteria, making it difficult for companies to understand and implement the requirements. Furthermore, it only lists “successful” activities from the past, as innovation, by definition, cannot be part of such a list. We propose a continuous and rapid updating mechanism for the list to incorporate the latest clean innovations.
In Germany, as well as in Europe as a whole, we see companies scaling their solutions in the US and Asia due to more favorable conditions. A sustainable, competitive economy is Europe’s opportunity to combine ambitious climate action with strong economic performance.
We are convinced: Climate champions must emerge from Europe and translate excellent research into strong companies. The NZIA is a good example of how Europe must implement the Green Deal: Once in force, it will help companies scale and stimulate private investment.
Economic prosperity and jobs emerge where market conditions are favorable – this explicitly requires a simple, harmonized regulatory environment. The NZIA and taxonomy are two important levers for Europe – if we design them correctly.
Angelika Niebler is a Member of the European Parliament for the CSU and serves, among other roles, on the Committee on Industry, Research, and Energy of the European Parliament. Andreas Sichert is the CEO of Orcan Energy. The company offers modules that convert waste heat into electricity.
