The term sounds academic and abstract, but it actually describes the web of life on our planet: For nearly two weeks, biodiversity will be the topic of the UN conference COP15 in Montreal. The threat to this web of life is as dangerous as the climate crisis – and closely related to it: Without a reasonably functioning nature, there is no hope for curbing global warming. And if greenhouse gas emissions do not decrease, biodiversity is beyond saving. It is that simple and that complicated.
Because the species and climate crises are closely intertwined, we are keeping a close eye on this issue as well. Our colleague Timo Landenberger is on the ground, and describes in this Climate.Table issue what can be expected in Montreal. But today’s other topics are also related to biodiversity: India, which now holds the G20 presidency, places great importance on the conservation of natural resources, because the poor are particularly dependent on them, writes our colleague Urmi Goswami from New Delhi. A loss of the Amazon rainforest would be not only an ecological but also an economic disaster, warns a new study. And the German Federal Court of Auditors criticizes Germany’s poor forest policy.
And in other respects, too, the climate situation does not follow our hopes for a peaceful Advent season. The problem is far too urgent for that, and there is too much to do. And we all know that the climate crisis is far more than the question of whether we will have a white Christmas or not. But it still would be nice.
To achieve its climate targets, the German government wants to use the controversial technologies of carbon capture and storage (CCU/CCS) sooner and on a larger scale than expected. As early as 2030, the use, capture and storage of carbon dioxide will have to be used “on a megaton scale“, especially from industry, according to the Ministry of Economics, which is in charge of the issue.
According to relevant studies, “the use of CCS and CCU on a significant scale is necessary to achieve climate targets,” the ministry writes in the evaluation report on the Carbon Capture and Storage Act (KSpG). The report is currently being coordinated in the government and is available to Climate.Table. It also promises a comprehensive government “carbon management strategy” by mid-2023. And it provides detailed proposals for the rapid amendment of laws and regulations, for example, on the infrastructure of carbon transport in pipelines.
The extensive paper summarizes the results of several reports by think tanks and experts. It emphasizes that climate protection should focus primarily on efficiency and renewables. But for a remainder of emissions, export and storage should be made available as quickly as possible. The report bases this conclusion on five comprehensive scientific studies. These studies consider CCS, in particular, essential for the cement, glass, lime, waste and chemical industries, for example, to achieve the mandated carbon neutrality by 2045. By 2030, a few million metric tons of carbon dioxide are to be stored, and by 2045 at the latest, between 34 and 73 million metric tons every year.
This is intended to enable a “transparent and inclusive process and continuous dialogue.” The government considers “public support” for the CCU/CCS economy to be of great importance.
Research institutes also repeatedly call for a debate on CCS. Only one study by the German Federal Environment Agency does not foresee the use of these technologies – albeit under the optimistic assumption that forests will store more carbon and that the behavior of the population will change significantly, for example when it comes to meat consumption.
With the evaluation report, which by law is mandatory every four years, the green-led Federal Ministry for Economic Affairs and Climate Action touches on a delicate subject. Because while the Carbon Capture and Storage Act allows the use of CCS in Germany in principle, it is not actually being utilized due to time constraints and political resistance. The coalition agreement signed by the governing coalition government only tentatively acknowledges the “need for technical negative emissions” and promises a “long-term strategy for dealing with the approximately five percent of unavoidable residual emissions.” However, the report calculates that the amount of stored carbon dioxide in 2045 will be between five and ten percent of Germany’s current emissions.
Internationally, Germany also has yet to create the necessary regulations for CO2 transport for export. CCS/CCU have been virtually on hold in Germany since a major social debate ten years ago. By contrast, the industrial sector and European countries such as Denmark, the Netherlands and Norway are already investing heavily in CCS projects. At the end of November, the EU adopted the first rules for the certification of voluntary carbon storage.
The evaluation report from the Ministry for Economic Affairs and Climate Action envisages to
Furthermore, the government wants to develop a “Carbon Management Strategy“. Following an initial meeting with interested parties in October, a concept is to be developed in a transparent process by mid-2023 to clarify questions on the application of CCS and CCU, including
These considerations fulfill an urgent demand from the industry regarding legal certainty. “We need more clarity from policymakers,” says Antje Schünemann from the Wintershall/DEA energy group. At the moment, the export of carbon dioxide is not even permitted in Germany, although her company is already making plans: In Wilhelmshaven and on the Danish coast, the company plans to set up “CO2 hubs” where ships carrying carbon dioxide cargo will be able to dock, among other things. And from 2032, these plans envision a pipeline that will transport up to 20-40 million metric tons of carbon dioxide a year over 900 kilometers from the North German coast to the “Luna” field in the Norwegian North Sea, among other places. “We want to offer various options for the safe storage of CO2,” Schünemann said.
Wintershall/DEA is also active in Denmark. Just last Tuesday, the Danish government gave the green light for the “Greensand” pilot project. Following a trial phase, the Group and its Danish partners plan to store CO2 from Denmark and other European countries there starting in 2027/2028. By 2030, four to eight million tons of carbon dioxide are expected to disappear under the sea there each year. There is still no official information on German customers and prices – but there is great interest from German steel and chemical companies, for example, who seek to advance their decarbonization this way.
In the North Sea in particular, the construction of carbon storage facilities is already well underway. For example, the Norwegian consortium “Northern Lights,” operated by energy companies Equinor, Shell and Total, has been planning a storage facility off the Norwegian west coast at a depth of 2,700 meters since 2019: Starting in 2024, tankers are to be used to inject loads of liquid CO2 into storage facilities from all over Europe, primarily from Germany. The construction of specialized vessels for Northern Lights began at a shipyard in China as recently as November.
There is a lot of stir about Joe Biden’s billion-dollar climate change program. Emmanuel Macron called the Inflation Reduction Act (IRA) “super aggressive” and is promoting a “Buy European” act in response. Robert Habeck also argues for his own “robust industrial strategy.” The EU Commission called the IRA “clearly discriminatory” in its statement. European industries would be disadvantaged, jobs and growth endangered.
Trade experts are less critical of the law. “The US subsidies are unlikely to lead to a major wave of tech companies settling here from abroad,” says Holger Görg of the Kiel Institute for World Economy (IfW). Already in 2017, the US had “significantly reduced” its profit tax for entrepreneurs from 35 to 21 percent. That “did not lead to masses of new foreign companies setting up shop,” according to the head of international trade and investment research. Many industries are also more relaxed. Only the automobile and hydrogen industries see risks.
The IRA focuses on expanding renewable energy and operating climate-friendly power plants. US companies are only slightly favored:
However, European plant manufacturers will also benefit from these subsidies. According to Holger Görg, the “buy local” tax bonus “doesn’t make a big difference”. That alone is not the reason why any company migrates.
Companies do not share the EU’s complaints either. At Wacker Chemie, the Inflation Reduction Act is actually viewed quite positively. The company, which was also present at the launch of the new “Clean Tech Europe” platform, produces polysilicon for solar modules in the US and Germany. “The Inflation Reduction Act will increase polysilicon demand outside China, which is positive – even for our production site in Germany,” says a spokeswoman.
The association Wind Europe writes on inquiry, the “Inflation Reduction Act will accelerate the global energy transition to renewable energies”. European companies could also benefit from increased demand, adds the German association WindEnergie. However, the European states would have to keep pace: “Instead of a withdrawal of the IRA, we advocate for a replication at the European level,” writes Wind Europe.
Meyer Burger, a manufacturer of solar cells and modules, is currently already investing in the US. The investment decision was made before the IRA was passed. The law has made the US an “immense growth market for the solar industry,” a spokeswoman said.
The Biden administration is also awarding tax incentives to attract green industries. With 37 billion US dollars, the dependence on global supply chains is to be reduced. However, because the incentives are to run for nine years, this amounts to only about 4 billion US dollars annually.
Trade expert Görg is skeptical that this will trigger a major wave of business expansions. Fundamental weaknesses are more important, he says: “Above all, uncertainties in the political system, increasing protectionism and the question of whether a Republican president will continue to push climate protection are scaring off investors. IRA subsidies won’t change that.”
The German chambers of commerce do not see it quite as negatively, but generally agree on the impact of the IRA. A survey by the AHK Chamber of Foreign Trade shows that business prospects in the USA are among the best. Low energy prices, a good supplier network and the availability of skilled workers all speak in favor of the US, says Volker Treier, DIHK head of foreign trade: “The tax incentives in the Inflation Reduction Act can create additional incentives in the US once again.”
However, the subsidies are “not a central point in the investment decisions of many German companies,” adds Matthias Hoffmann, AHK managing director for Atlanta. Measured against the ten-year term, the volume of the IRA is too small for fundamental changes. In addition, certain sectors of the economy are only eligible for subsidies to a limited extent, says the AHK representative.
How do the subsidies work?
The Biden administration is taking a clear Buy America approach to the promotion of EVs. Tax rebates are only available for EVs that are assembled in the USA, Canada or Mexico. From 2024 and 2025 on, the batteries may no longer be manufactured in countries that are problematic for the USA, such as China – or even contain materials from these countries.
The clauses on local precursors and final assembly are expected to have the greatest impact on Europe’s industry. The exact effects of the IRA are not yet foreseeable, says Hildegard Müller, President of the German Association of the Automotive Industry (VDA). But: “Exports from Germany have less of a chance as a result of the regulation.” The association calls for “open and non-discriminatory promotion.” A Mercedes-Benz spokeswoman says various aspects of the law are “a challenge for the industry and, in the short term, also for Mercedes-Benz.” Subsidies, however, are only one factor when it comes to investment decisions. BMW adds that it produces “local for local” anyway; vehicles for the local market are produced locally wherever possible.
Karsten Neuhoff, a climate expert at DIW Berlin, does see “negative effects of the protectionist orientation” of EV subsidies. At the same time, “US investments in the production of green products could also create opportunities, for example for mechanical engineering in Europe.”
How do the subsidies work? Buyers of new an EV are eligible for a tax credit of up to 7,500 US dollars, and buyers of used EVs are eligible for a tax credit of up to 4,000 US dollars. The incentive is tiered: 3,750 US dollars in tax credits are granted if the batteries in the new cars contain a certain amount of critical minerals mined or processed in the United States or in a state with which the United States has a free trade agreement. Buyers receive another 3,750 US dollars in tax credits if at least 50 percent of the value of the battery components were manufactured in the United States.
Clean hydrogen also only receives subsidies if the hydrogen is produced in the US. The European hydrogen association Hydrogen Europe sees a risk that US manufacturers will gain a competitive advantage as a result “if the EU does not act quickly to create its own regulatory framework for hydrogen.” It is “certainly a possibility” that European manufacturers will migrate to the US if the EU does not also create a better framework. The coming year will be crucial for the European hydrogen industry, the association said.
How do the subsidies work?
The majority of the IRA’s subsidies are not necessarily tied to the purchase of North American goods. Investors and suppliers from Europe can also benefit from the subsidy. Many experts agree that the IRA hardly raises new trade barriers. But the EU is under pressure to improve the framework conditions for green investments. Karsten Neuhoff, head of the climate policy department at DIW Berlin, suggests three measures:
Earlier this week, sherpas from G20 member states and nine host countries met in Udaipur in the western state of Rajasthan. From government documents seen by Climate Home, this is the picture that emerges: The Modi government is taking a broad approach to climate policy, including biodiversity loss, land degradation, water stress, resource efficiency, oceans, agriculture, energy transition and development needs. There needs to be adequate technological and financial support for this, he said.
“India has made climate action and finance a central pillar of its G20 presidency. It will aim to develop mechanisms through which a far greater volume of sustainable investment will flow at lower cost to countries where sustainable infrastructure is most needed,” said Arunabha Ghosh, executive director of the Delhi-based think tank Centre for Energy, Environment and Water (CEEW).
To that end, India’s proposals call for all the outcomes of the planned leaders’ summit to come together in a green development pact. It consists of five pillars:
India has introduced a new G20 working group on “disaster resilience.” This is because G20 countries also face estimated annual losses of $218 billion, or 9 percent of their annual infrastructure investments, from climate-related disasters.
To implement the global energy transition, India has identified six priority areas:
In general, India aims to drive collaborations among G20 countries. These include:
On the drivers and impacts of climate change, India has made a number of calls on land degradation, oceans, and resource efficiency.
The issue of climate finance is a “challenge” for India’s Sherpa Amitabh Kant. This is because “almost 80% of the carbon space available for 1.5°C has been occupied by developed countries.” But the $100 billion per year promised from 2020 has not been met.” As presidency, India is looking at various ways to close the funding gap.
It is estimated that $100 trillion to $150 trillion in global investment will be needed by 2050, most of which will be needed in developing countries to achieve net-zero emissions. “India’s G20 chairmanship is focused on increasing investment in climate action, collaboration on new clean technologies and rules for these technologies,” Ghosh said.
The priorities do not include an explicit emissions reduction target, though India has mentioned 1.5°C as a temperature target.
IEA chief Fatih Birol said India’s G20 presidency provides an excellent opportunity to show that “developing countries can deliver a clean energy transition.” India could build on its recent success stories, such as the Ujjwala clean cooking program, the LED lighting program, and the expansion of photovoltaic production. “It’s a good opportunity for India to showcase this and share the experience with the rest of the world.”
Shortly before the start of the UN Biodiversity Summit in Montreal, more than 600 researchers have appealed to the world’s leading politicians: They must ensure that no more trees are burned for energy. Using wood to heat and generate electricity would destroy important habitats and contradict climate protection. The Guardian reported on the open letter.
The appeal shows that climate will also be a topic when the 196 signatory states to the Convention on Biological Diversity (CBD) will negotiate a new global agreement on the protection of biological diversity at the CBD-COP15 from December 7 to 19. Because trees, peatlands and other natural environments store carbon dioxide. If they are protected and allowed to regenerate, this increases their capacity as carbon sinks and helps the climate. The greater the species diversity of an ecosystem, the more resistant it is to the effects of global warming.
Past biodiversity targets were all missed. But now the destruction of natural habitats is to be finally stopped and reversed at CBD-COP15. Ecosystems are to be renatured, harmful subsidies stopped and funding for nature conservation increased. This is what the ambitious draft of the Global Biodiversity Framework (GBF) envisages.
Echoing the far-reaching 2015 climate agreement, the negotiations are expected to deliver a “Paris moment” for biodiversity. But the Montreal conference comes at a difficult time.
Although COP27 in Sharm el-Sheikh gave species protection a tailwind by stressing the importance of healthy ecosystems for climate protection, many countries have recently put their environmental ambitions on the back burner in the fight against multiple crises and to secure energy and food supplies. The question surrounding financing proves to be particularly controversial. And the positions of the individual countries are sometimes far apart in the run-up to the negotiations.
But a weak agreement could once again delay biodiversity protection for years. In the run-up, the EU campaigned for an ambitious agreement: “An agreement with too low a level of ambition and without a solid and real possibility of implementation would be a red line for the EU,” Commissioner for the Environment, Oceans and Fisheries Virginijus Sinkevičius, who will lead the EU delegation, told French news service Contexte.
EU environment ministers also call for an ambitious approach. In its latest decision, the Council supports the demand of the High Ambition Coalition, which includes around 100 countries, to place 30 percent of the total area of each country under protection by 2030. This equates to doubling the land area and quadrupling the ocean area. 30×30 is a catchy equivalent to the 1.5-degree target.
The global targets are to be translated into National Biodiversity Strategies and Actions Plans (NBSAPs). The countries will also negotiate in Montreal on uniform monitoring and regular reporting obligations.
However, unlike greenhouse gas emissions, it is difficult to quantify the state of ecosystems. Questions about suitable indicators are unanswered; several countries criticize the required administrative burden, and in Europe, too, municipalities and regional administrations fear a flood of bureaucracy.
According to the Commission, the conservation status of around 80 percent of all ecosystems in the EU is poor. The draft biodiversity agreement provides for renaturation measures on 20 percent of the degenerated areas. But their definition is also unclear.
The EU council of ministers sees great potential in nature-based solutions in this context. Artificial coral reefs, the cultivation of seagrass and algae, the rewetting of moors or reforestation create habitats and bind carbon dioxide on a large scale. The EU wants to set a good example here, for example, with the planned Nature Restoration Law, but still debates about its implementation.
Similar to the climate conferences, the biggest debate in Montreal is expected to revolve around funding. Target 19 of the draft biodiversity framework convention provides for an increase of the total environmental protection budget to at least 200 billion US dollars per year. At least ten billion is to be raised from wealthy countries to support poorer countries. Some countries in the Global South are calling for significantly higher sums.
In addition, the draft proposes to redirect or completely eliminate environmentally harmful subsidies of at least 500 billion dollars per year. However, many countries recently increased these subsidies to ensure energy and food security.
The private sector is also expected to play its part. The GBF goals include ensuring that all companies and financial institutions monitor, assess and disclose their impacts on biodiversity. Under the umbrella of the Business for Nature initiative, around 330 corporations and financial institutions support this. They call for mandatory reporting for companies along the entire supply chain. How exactly this might look will be the subject of negotiations. The Taskforce on Nature-related Financial Disclosures (TNFD), among others, has drawn up possible guidelines over the past few years.
Germany has now been governed by the new “traffic light coalition” for a year. After 16 years of government by the conservative CDU, the traffic light parties promised to reform climate policy and form a progressive coalition in this area. Robert Habeck, Minister for Economic Affairs and Climate Action, in particular had big plans. But then Russia’s attack on Ukraine changed the priorities.
We asked various stakeholders how they rate the climate policy of the German government. Most of them are not exactly full of praise.
Tony Rinaudo was about to give up and go back to his homeland Australia with his family. It was the early 1980s. Rinaudo, at the time still a young agronomist with big goals, was driving a trailer full of tree seedlings across an empty, windswept plain in Niger, West Africa. For two and a half years, he had tried to reforest the country to help farmers make a better living. With little success.
But then he saw something that looked like a bush on the side of the road, which turned out to be a tree, and he had an epiphany: Instead of planting new saplings, he could work with the existing remnants of old trees, protect them and prune them so that they could regrow into tall trees. After all, their roots, some of which extended more than 40 meters into the ground, were still there. “I had the image of an underground forest in my mind, just waiting to grow to the surface,” says Rinaudo in Volker Schlöndorff’s film “Der Waldmacher.” (The Forest Maker). In it, the German Oscar director tells the life story of Rinaudo.
Rinaudo’s work benefits nature in the Sahel and the global climate. The trees store carbon dioxide, and species-rich forests are better able to withstand the effects of warming than degraded landscapes.
Tony Rinaudo was born in Australia in January 1957. He grew up in the countryside and had an idyllic childhood. But the natural paradise was destroyed for tobacco plantations, Rinaudo recalls. “Why were adults so bent on making money while destroying the environment that was actually our future?”
He studied agriculture and went to Niger directly after his graduation at the age of 24. He was joined by his wife Liz, also an agronomist of the same age and a believer like him, and their six-month-old son Ben. The couple’s three younger children were born in Niger.
But everything he tried failed – until he discovered the underground forest. Even after that, it took a while to convince the farmers of his method. What eventually brought a turning point: During the 1984 famine, which killed more than a million people, Rinaudo was in charge of aid distribution. He tied it to one condition: Those who received food had to take care of a certain number of trees in return. Tens of thousands participated.
But something else was probably just as important. He spent a lot of time with the people, Rinaudo recalls in an interview with the German newspaper ZEIT. “One reason our work was so successful was that I wasn’t flown in as an expert, but I learned as much from them and with them as they learned from me. We experimented together.” Those who meet the 65-year-old Rinaudo see an approachable, modest person with watchful eyes, a bright voice and a gentle smile who is still passionate about his mission.
In Niger alone, Rinaudo’s technique, which he calls FMNR, Farmer Managed Natural Regeneration, is said to have restored five million hectares of forest at a cost of less than two US dollars per hectare. Conventional reforestation costs about 8,000 US dollars, he calculates.
And this is how FMNR works: The trees are pruned with the sickle every few weeks. A main shoot grows into the trunk of the tree. If thicker branches fall during pruning, they can serve as firewood, but foliage and thin twigs remain under the trees. They cool the soil and provide additional nutrients, and serve as food for termites, which, in turn, attract birds and lizards. They protect the villages from sandstorms and the soil from the effects of erosion. The soil is also wetter under the trees. As a result, the forests provide farmers with better harvests. Smallholders in about two dozen countries already use FMNR.
In 2018, Rinaudo received the Alternative Nobel Prize for his work, along with farmer Yacoub Sawadogo, another pioneer against desertification in the Sahel. Since he received the prize, interest in FMNR has grown around the world. At the climate summit in Sharm el-Sheikh, Rinaudo presented his work and spoke with German government officials. Previously, he traveled to countries including Germany and answered questions from MPs in the German Bundestag.
In Schlöndorff’s film, Rinaudo speaks at village meetings, to elders and on the radio; he shows children how to prune trees properly. Instead of lecturing people, he prefers to ask questions: How many shoots do you leave on the tree? Are the harvests better under the trees? Only to laughingly reply to their answers: “You are the teacher now. I am unemployed, I have nothing more to do.”
But Rinaudo’s work is far from done. He said he wants to start a movement that restores a billion hectares of destroyed land: “If I can be a voice for that, encouraging, informing and inspiring, then I am happy.” By Alexandra Endres
The term sounds academic and abstract, but it actually describes the web of life on our planet: For nearly two weeks, biodiversity will be the topic of the UN conference COP15 in Montreal. The threat to this web of life is as dangerous as the climate crisis – and closely related to it: Without a reasonably functioning nature, there is no hope for curbing global warming. And if greenhouse gas emissions do not decrease, biodiversity is beyond saving. It is that simple and that complicated.
Because the species and climate crises are closely intertwined, we are keeping a close eye on this issue as well. Our colleague Timo Landenberger is on the ground, and describes in this Climate.Table issue what can be expected in Montreal. But today’s other topics are also related to biodiversity: India, which now holds the G20 presidency, places great importance on the conservation of natural resources, because the poor are particularly dependent on them, writes our colleague Urmi Goswami from New Delhi. A loss of the Amazon rainforest would be not only an ecological but also an economic disaster, warns a new study. And the German Federal Court of Auditors criticizes Germany’s poor forest policy.
And in other respects, too, the climate situation does not follow our hopes for a peaceful Advent season. The problem is far too urgent for that, and there is too much to do. And we all know that the climate crisis is far more than the question of whether we will have a white Christmas or not. But it still would be nice.
To achieve its climate targets, the German government wants to use the controversial technologies of carbon capture and storage (CCU/CCS) sooner and on a larger scale than expected. As early as 2030, the use, capture and storage of carbon dioxide will have to be used “on a megaton scale“, especially from industry, according to the Ministry of Economics, which is in charge of the issue.
According to relevant studies, “the use of CCS and CCU on a significant scale is necessary to achieve climate targets,” the ministry writes in the evaluation report on the Carbon Capture and Storage Act (KSpG). The report is currently being coordinated in the government and is available to Climate.Table. It also promises a comprehensive government “carbon management strategy” by mid-2023. And it provides detailed proposals for the rapid amendment of laws and regulations, for example, on the infrastructure of carbon transport in pipelines.
The extensive paper summarizes the results of several reports by think tanks and experts. It emphasizes that climate protection should focus primarily on efficiency and renewables. But for a remainder of emissions, export and storage should be made available as quickly as possible. The report bases this conclusion on five comprehensive scientific studies. These studies consider CCS, in particular, essential for the cement, glass, lime, waste and chemical industries, for example, to achieve the mandated carbon neutrality by 2045. By 2030, a few million metric tons of carbon dioxide are to be stored, and by 2045 at the latest, between 34 and 73 million metric tons every year.
This is intended to enable a “transparent and inclusive process and continuous dialogue.” The government considers “public support” for the CCU/CCS economy to be of great importance.
Research institutes also repeatedly call for a debate on CCS. Only one study by the German Federal Environment Agency does not foresee the use of these technologies – albeit under the optimistic assumption that forests will store more carbon and that the behavior of the population will change significantly, for example when it comes to meat consumption.
With the evaluation report, which by law is mandatory every four years, the green-led Federal Ministry for Economic Affairs and Climate Action touches on a delicate subject. Because while the Carbon Capture and Storage Act allows the use of CCS in Germany in principle, it is not actually being utilized due to time constraints and political resistance. The coalition agreement signed by the governing coalition government only tentatively acknowledges the “need for technical negative emissions” and promises a “long-term strategy for dealing with the approximately five percent of unavoidable residual emissions.” However, the report calculates that the amount of stored carbon dioxide in 2045 will be between five and ten percent of Germany’s current emissions.
Internationally, Germany also has yet to create the necessary regulations for CO2 transport for export. CCS/CCU have been virtually on hold in Germany since a major social debate ten years ago. By contrast, the industrial sector and European countries such as Denmark, the Netherlands and Norway are already investing heavily in CCS projects. At the end of November, the EU adopted the first rules for the certification of voluntary carbon storage.
The evaluation report from the Ministry for Economic Affairs and Climate Action envisages to
Furthermore, the government wants to develop a “Carbon Management Strategy“. Following an initial meeting with interested parties in October, a concept is to be developed in a transparent process by mid-2023 to clarify questions on the application of CCS and CCU, including
These considerations fulfill an urgent demand from the industry regarding legal certainty. “We need more clarity from policymakers,” says Antje Schünemann from the Wintershall/DEA energy group. At the moment, the export of carbon dioxide is not even permitted in Germany, although her company is already making plans: In Wilhelmshaven and on the Danish coast, the company plans to set up “CO2 hubs” where ships carrying carbon dioxide cargo will be able to dock, among other things. And from 2032, these plans envision a pipeline that will transport up to 20-40 million metric tons of carbon dioxide a year over 900 kilometers from the North German coast to the “Luna” field in the Norwegian North Sea, among other places. “We want to offer various options for the safe storage of CO2,” Schünemann said.
Wintershall/DEA is also active in Denmark. Just last Tuesday, the Danish government gave the green light for the “Greensand” pilot project. Following a trial phase, the Group and its Danish partners plan to store CO2 from Denmark and other European countries there starting in 2027/2028. By 2030, four to eight million tons of carbon dioxide are expected to disappear under the sea there each year. There is still no official information on German customers and prices – but there is great interest from German steel and chemical companies, for example, who seek to advance their decarbonization this way.
In the North Sea in particular, the construction of carbon storage facilities is already well underway. For example, the Norwegian consortium “Northern Lights,” operated by energy companies Equinor, Shell and Total, has been planning a storage facility off the Norwegian west coast at a depth of 2,700 meters since 2019: Starting in 2024, tankers are to be used to inject loads of liquid CO2 into storage facilities from all over Europe, primarily from Germany. The construction of specialized vessels for Northern Lights began at a shipyard in China as recently as November.
There is a lot of stir about Joe Biden’s billion-dollar climate change program. Emmanuel Macron called the Inflation Reduction Act (IRA) “super aggressive” and is promoting a “Buy European” act in response. Robert Habeck also argues for his own “robust industrial strategy.” The EU Commission called the IRA “clearly discriminatory” in its statement. European industries would be disadvantaged, jobs and growth endangered.
Trade experts are less critical of the law. “The US subsidies are unlikely to lead to a major wave of tech companies settling here from abroad,” says Holger Görg of the Kiel Institute for World Economy (IfW). Already in 2017, the US had “significantly reduced” its profit tax for entrepreneurs from 35 to 21 percent. That “did not lead to masses of new foreign companies setting up shop,” according to the head of international trade and investment research. Many industries are also more relaxed. Only the automobile and hydrogen industries see risks.
The IRA focuses on expanding renewable energy and operating climate-friendly power plants. US companies are only slightly favored:
However, European plant manufacturers will also benefit from these subsidies. According to Holger Görg, the “buy local” tax bonus “doesn’t make a big difference”. That alone is not the reason why any company migrates.
Companies do not share the EU’s complaints either. At Wacker Chemie, the Inflation Reduction Act is actually viewed quite positively. The company, which was also present at the launch of the new “Clean Tech Europe” platform, produces polysilicon for solar modules in the US and Germany. “The Inflation Reduction Act will increase polysilicon demand outside China, which is positive – even for our production site in Germany,” says a spokeswoman.
The association Wind Europe writes on inquiry, the “Inflation Reduction Act will accelerate the global energy transition to renewable energies”. European companies could also benefit from increased demand, adds the German association WindEnergie. However, the European states would have to keep pace: “Instead of a withdrawal of the IRA, we advocate for a replication at the European level,” writes Wind Europe.
Meyer Burger, a manufacturer of solar cells and modules, is currently already investing in the US. The investment decision was made before the IRA was passed. The law has made the US an “immense growth market for the solar industry,” a spokeswoman said.
The Biden administration is also awarding tax incentives to attract green industries. With 37 billion US dollars, the dependence on global supply chains is to be reduced. However, because the incentives are to run for nine years, this amounts to only about 4 billion US dollars annually.
Trade expert Görg is skeptical that this will trigger a major wave of business expansions. Fundamental weaknesses are more important, he says: “Above all, uncertainties in the political system, increasing protectionism and the question of whether a Republican president will continue to push climate protection are scaring off investors. IRA subsidies won’t change that.”
The German chambers of commerce do not see it quite as negatively, but generally agree on the impact of the IRA. A survey by the AHK Chamber of Foreign Trade shows that business prospects in the USA are among the best. Low energy prices, a good supplier network and the availability of skilled workers all speak in favor of the US, says Volker Treier, DIHK head of foreign trade: “The tax incentives in the Inflation Reduction Act can create additional incentives in the US once again.”
However, the subsidies are “not a central point in the investment decisions of many German companies,” adds Matthias Hoffmann, AHK managing director for Atlanta. Measured against the ten-year term, the volume of the IRA is too small for fundamental changes. In addition, certain sectors of the economy are only eligible for subsidies to a limited extent, says the AHK representative.
How do the subsidies work?
The Biden administration is taking a clear Buy America approach to the promotion of EVs. Tax rebates are only available for EVs that are assembled in the USA, Canada or Mexico. From 2024 and 2025 on, the batteries may no longer be manufactured in countries that are problematic for the USA, such as China – or even contain materials from these countries.
The clauses on local precursors and final assembly are expected to have the greatest impact on Europe’s industry. The exact effects of the IRA are not yet foreseeable, says Hildegard Müller, President of the German Association of the Automotive Industry (VDA). But: “Exports from Germany have less of a chance as a result of the regulation.” The association calls for “open and non-discriminatory promotion.” A Mercedes-Benz spokeswoman says various aspects of the law are “a challenge for the industry and, in the short term, also for Mercedes-Benz.” Subsidies, however, are only one factor when it comes to investment decisions. BMW adds that it produces “local for local” anyway; vehicles for the local market are produced locally wherever possible.
Karsten Neuhoff, a climate expert at DIW Berlin, does see “negative effects of the protectionist orientation” of EV subsidies. At the same time, “US investments in the production of green products could also create opportunities, for example for mechanical engineering in Europe.”
How do the subsidies work? Buyers of new an EV are eligible for a tax credit of up to 7,500 US dollars, and buyers of used EVs are eligible for a tax credit of up to 4,000 US dollars. The incentive is tiered: 3,750 US dollars in tax credits are granted if the batteries in the new cars contain a certain amount of critical minerals mined or processed in the United States or in a state with which the United States has a free trade agreement. Buyers receive another 3,750 US dollars in tax credits if at least 50 percent of the value of the battery components were manufactured in the United States.
Clean hydrogen also only receives subsidies if the hydrogen is produced in the US. The European hydrogen association Hydrogen Europe sees a risk that US manufacturers will gain a competitive advantage as a result “if the EU does not act quickly to create its own regulatory framework for hydrogen.” It is “certainly a possibility” that European manufacturers will migrate to the US if the EU does not also create a better framework. The coming year will be crucial for the European hydrogen industry, the association said.
How do the subsidies work?
The majority of the IRA’s subsidies are not necessarily tied to the purchase of North American goods. Investors and suppliers from Europe can also benefit from the subsidy. Many experts agree that the IRA hardly raises new trade barriers. But the EU is under pressure to improve the framework conditions for green investments. Karsten Neuhoff, head of the climate policy department at DIW Berlin, suggests three measures:
Earlier this week, sherpas from G20 member states and nine host countries met in Udaipur in the western state of Rajasthan. From government documents seen by Climate Home, this is the picture that emerges: The Modi government is taking a broad approach to climate policy, including biodiversity loss, land degradation, water stress, resource efficiency, oceans, agriculture, energy transition and development needs. There needs to be adequate technological and financial support for this, he said.
“India has made climate action and finance a central pillar of its G20 presidency. It will aim to develop mechanisms through which a far greater volume of sustainable investment will flow at lower cost to countries where sustainable infrastructure is most needed,” said Arunabha Ghosh, executive director of the Delhi-based think tank Centre for Energy, Environment and Water (CEEW).
To that end, India’s proposals call for all the outcomes of the planned leaders’ summit to come together in a green development pact. It consists of five pillars:
India has introduced a new G20 working group on “disaster resilience.” This is because G20 countries also face estimated annual losses of $218 billion, or 9 percent of their annual infrastructure investments, from climate-related disasters.
To implement the global energy transition, India has identified six priority areas:
In general, India aims to drive collaborations among G20 countries. These include:
On the drivers and impacts of climate change, India has made a number of calls on land degradation, oceans, and resource efficiency.
The issue of climate finance is a “challenge” for India’s Sherpa Amitabh Kant. This is because “almost 80% of the carbon space available for 1.5°C has been occupied by developed countries.” But the $100 billion per year promised from 2020 has not been met.” As presidency, India is looking at various ways to close the funding gap.
It is estimated that $100 trillion to $150 trillion in global investment will be needed by 2050, most of which will be needed in developing countries to achieve net-zero emissions. “India’s G20 chairmanship is focused on increasing investment in climate action, collaboration on new clean technologies and rules for these technologies,” Ghosh said.
The priorities do not include an explicit emissions reduction target, though India has mentioned 1.5°C as a temperature target.
IEA chief Fatih Birol said India’s G20 presidency provides an excellent opportunity to show that “developing countries can deliver a clean energy transition.” India could build on its recent success stories, such as the Ujjwala clean cooking program, the LED lighting program, and the expansion of photovoltaic production. “It’s a good opportunity for India to showcase this and share the experience with the rest of the world.”
Shortly before the start of the UN Biodiversity Summit in Montreal, more than 600 researchers have appealed to the world’s leading politicians: They must ensure that no more trees are burned for energy. Using wood to heat and generate electricity would destroy important habitats and contradict climate protection. The Guardian reported on the open letter.
The appeal shows that climate will also be a topic when the 196 signatory states to the Convention on Biological Diversity (CBD) will negotiate a new global agreement on the protection of biological diversity at the CBD-COP15 from December 7 to 19. Because trees, peatlands and other natural environments store carbon dioxide. If they are protected and allowed to regenerate, this increases their capacity as carbon sinks and helps the climate. The greater the species diversity of an ecosystem, the more resistant it is to the effects of global warming.
Past biodiversity targets were all missed. But now the destruction of natural habitats is to be finally stopped and reversed at CBD-COP15. Ecosystems are to be renatured, harmful subsidies stopped and funding for nature conservation increased. This is what the ambitious draft of the Global Biodiversity Framework (GBF) envisages.
Echoing the far-reaching 2015 climate agreement, the negotiations are expected to deliver a “Paris moment” for biodiversity. But the Montreal conference comes at a difficult time.
Although COP27 in Sharm el-Sheikh gave species protection a tailwind by stressing the importance of healthy ecosystems for climate protection, many countries have recently put their environmental ambitions on the back burner in the fight against multiple crises and to secure energy and food supplies. The question surrounding financing proves to be particularly controversial. And the positions of the individual countries are sometimes far apart in the run-up to the negotiations.
But a weak agreement could once again delay biodiversity protection for years. In the run-up, the EU campaigned for an ambitious agreement: “An agreement with too low a level of ambition and without a solid and real possibility of implementation would be a red line for the EU,” Commissioner for the Environment, Oceans and Fisheries Virginijus Sinkevičius, who will lead the EU delegation, told French news service Contexte.
EU environment ministers also call for an ambitious approach. In its latest decision, the Council supports the demand of the High Ambition Coalition, which includes around 100 countries, to place 30 percent of the total area of each country under protection by 2030. This equates to doubling the land area and quadrupling the ocean area. 30×30 is a catchy equivalent to the 1.5-degree target.
The global targets are to be translated into National Biodiversity Strategies and Actions Plans (NBSAPs). The countries will also negotiate in Montreal on uniform monitoring and regular reporting obligations.
However, unlike greenhouse gas emissions, it is difficult to quantify the state of ecosystems. Questions about suitable indicators are unanswered; several countries criticize the required administrative burden, and in Europe, too, municipalities and regional administrations fear a flood of bureaucracy.
According to the Commission, the conservation status of around 80 percent of all ecosystems in the EU is poor. The draft biodiversity agreement provides for renaturation measures on 20 percent of the degenerated areas. But their definition is also unclear.
The EU council of ministers sees great potential in nature-based solutions in this context. Artificial coral reefs, the cultivation of seagrass and algae, the rewetting of moors or reforestation create habitats and bind carbon dioxide on a large scale. The EU wants to set a good example here, for example, with the planned Nature Restoration Law, but still debates about its implementation.
Similar to the climate conferences, the biggest debate in Montreal is expected to revolve around funding. Target 19 of the draft biodiversity framework convention provides for an increase of the total environmental protection budget to at least 200 billion US dollars per year. At least ten billion is to be raised from wealthy countries to support poorer countries. Some countries in the Global South are calling for significantly higher sums.
In addition, the draft proposes to redirect or completely eliminate environmentally harmful subsidies of at least 500 billion dollars per year. However, many countries recently increased these subsidies to ensure energy and food security.
The private sector is also expected to play its part. The GBF goals include ensuring that all companies and financial institutions monitor, assess and disclose their impacts on biodiversity. Under the umbrella of the Business for Nature initiative, around 330 corporations and financial institutions support this. They call for mandatory reporting for companies along the entire supply chain. How exactly this might look will be the subject of negotiations. The Taskforce on Nature-related Financial Disclosures (TNFD), among others, has drawn up possible guidelines over the past few years.
Germany has now been governed by the new “traffic light coalition” for a year. After 16 years of government by the conservative CDU, the traffic light parties promised to reform climate policy and form a progressive coalition in this area. Robert Habeck, Minister for Economic Affairs and Climate Action, in particular had big plans. But then Russia’s attack on Ukraine changed the priorities.
We asked various stakeholders how they rate the climate policy of the German government. Most of them are not exactly full of praise.
Tony Rinaudo was about to give up and go back to his homeland Australia with his family. It was the early 1980s. Rinaudo, at the time still a young agronomist with big goals, was driving a trailer full of tree seedlings across an empty, windswept plain in Niger, West Africa. For two and a half years, he had tried to reforest the country to help farmers make a better living. With little success.
But then he saw something that looked like a bush on the side of the road, which turned out to be a tree, and he had an epiphany: Instead of planting new saplings, he could work with the existing remnants of old trees, protect them and prune them so that they could regrow into tall trees. After all, their roots, some of which extended more than 40 meters into the ground, were still there. “I had the image of an underground forest in my mind, just waiting to grow to the surface,” says Rinaudo in Volker Schlöndorff’s film “Der Waldmacher.” (The Forest Maker). In it, the German Oscar director tells the life story of Rinaudo.
Rinaudo’s work benefits nature in the Sahel and the global climate. The trees store carbon dioxide, and species-rich forests are better able to withstand the effects of warming than degraded landscapes.
Tony Rinaudo was born in Australia in January 1957. He grew up in the countryside and had an idyllic childhood. But the natural paradise was destroyed for tobacco plantations, Rinaudo recalls. “Why were adults so bent on making money while destroying the environment that was actually our future?”
He studied agriculture and went to Niger directly after his graduation at the age of 24. He was joined by his wife Liz, also an agronomist of the same age and a believer like him, and their six-month-old son Ben. The couple’s three younger children were born in Niger.
But everything he tried failed – until he discovered the underground forest. Even after that, it took a while to convince the farmers of his method. What eventually brought a turning point: During the 1984 famine, which killed more than a million people, Rinaudo was in charge of aid distribution. He tied it to one condition: Those who received food had to take care of a certain number of trees in return. Tens of thousands participated.
But something else was probably just as important. He spent a lot of time with the people, Rinaudo recalls in an interview with the German newspaper ZEIT. “One reason our work was so successful was that I wasn’t flown in as an expert, but I learned as much from them and with them as they learned from me. We experimented together.” Those who meet the 65-year-old Rinaudo see an approachable, modest person with watchful eyes, a bright voice and a gentle smile who is still passionate about his mission.
In Niger alone, Rinaudo’s technique, which he calls FMNR, Farmer Managed Natural Regeneration, is said to have restored five million hectares of forest at a cost of less than two US dollars per hectare. Conventional reforestation costs about 8,000 US dollars, he calculates.
And this is how FMNR works: The trees are pruned with the sickle every few weeks. A main shoot grows into the trunk of the tree. If thicker branches fall during pruning, they can serve as firewood, but foliage and thin twigs remain under the trees. They cool the soil and provide additional nutrients, and serve as food for termites, which, in turn, attract birds and lizards. They protect the villages from sandstorms and the soil from the effects of erosion. The soil is also wetter under the trees. As a result, the forests provide farmers with better harvests. Smallholders in about two dozen countries already use FMNR.
In 2018, Rinaudo received the Alternative Nobel Prize for his work, along with farmer Yacoub Sawadogo, another pioneer against desertification in the Sahel. Since he received the prize, interest in FMNR has grown around the world. At the climate summit in Sharm el-Sheikh, Rinaudo presented his work and spoke with German government officials. Previously, he traveled to countries including Germany and answered questions from MPs in the German Bundestag.
In Schlöndorff’s film, Rinaudo speaks at village meetings, to elders and on the radio; he shows children how to prune trees properly. Instead of lecturing people, he prefers to ask questions: How many shoots do you leave on the tree? Are the harvests better under the trees? Only to laughingly reply to their answers: “You are the teacher now. I am unemployed, I have nothing more to do.”
But Rinaudo’s work is far from done. He said he wants to start a movement that restores a billion hectares of destroyed land: “If I can be a voice for that, encouraging, informing and inspiring, then I am happy.” By Alexandra Endres
