The carousel of climate conferences is spinning again: After the World Bank/IMF meeting and the Major Economies Forum (MEF), the Petersberg Climate Dialogue is coming up next week. Behind closed doors, the focus will be on what is possible at the COP in Dubai – and of course, as always, on money.
But Germany is currently playing an unsavory role in this, as we report. Because if the German budget for 2024 is cut as planned, there will probably be less money left over for international climate action. At the Climate Dialogue, Chancellor Olaf Scholz would have the chance to put something substantial on the table – just as his predecessor Angela Merkel often did. Our op-ed by the environmental think tank E3G warns: he should do just that. Perhaps Scholz really will reveal how he intends to keep his promise of handing out a total of six billion euros for climate finance in 2025.
Elsewhere, too, there is a lot to report on climate issues: Austria is struggling for the path to net zero; the oceans report a new heat record; EV sales are booming. Things stay interesting and exciting
One week before the high-level Petersberg Climate Dialogue in Berlin is held, which will also focus on international climate financing, Germany’s contribution remains uncertain. Although Germany has pledged a strong increase for 2025, the flow of money from Germany will initially be lower next year, according to current plans. There is currently a gap of about 1.4 billion euros to the 6 billion euros the German government has pledged for 2025. Whether and to what extent this gap will be closed in the 2024 federal budget is still disputed in the government coalition.
At this year’s traditional 14th Petersberg Climate Dialogue, around 40 delegations will meet in private to prepare for the negotiations of the next UN Climate Change Conference. In addition to the current and upcoming COP presidents, government representatives of the most important countries from the EU, the USA, China and other emerging and developing countries will be attending. At the time, German Chancellor Angela Merkel announced in 2015 that she would double Germany’s international climate financing from 2 to 4 billion euros by 2020. It is not yet clear whether Chancellor Olaf Scholz will also address the topic in his speech at this year’s Petersberg Conference next Wednesday.
This year, climate finance issues are once again at the top of the agenda, as the details of loss and damage are to be resolved at COP28. The poorer countries, in particular, are still expecting the developed countries to fulfill their 2020 pledge to mobilize 100 billion dollars annually for climate action and adaptation. So far, only about 83 billion have been raised.
According to current plans, however, Germany’s contribution to international climate financing could decrease in this decisive phase. In 2021, Germany spent about 5.34 billion euros on international climate action, according to the German Ministry for Economic Cooperation and Development (BMZ). There are no final figures for 2022 yet, but experts expect the sum to roughly remain the same. Germany’s climate spending is generally difficult to forecast because it depends on how high the BMZ’s budget is, how much other ministries contribute and which projects are signed with emerging and developing countries.
Even in the current year 2023, the BMZ budget has hardly changed, with a good 12 billion euros, and the share of climate finance could thus roughly maintain the level of 5.3 billion. But according to the German government’s medium-term budget plans, things are looking much worse for 2024: The BMZ budget will only reach 10.7 billion according to the current budget plans. With the same distribution in the budget of BMZ and other ministries, this would leave only about 4.6 billion euros for German climate spending.
Finance Minister Christian Lindner (FDP) put the submission of the 2024 budget on hold in March until all details have been clarified. In response to a query, his ministry stated that it could not “comment on the ongoing budget negotiations on the 2024 federal budget“. In these negotiations, the Ministry of Finance is now urging the respective ministries to internally reallocate their funds toward more climate action, the government states.
To reallocate funds, the ministries could divert money for education or agriculture into climate finance. About 88 percent of international climate financing is channeled through the BMZ, the rest is divided between the ministries of economics, environment and foreign affairs. “We will make an effort to contribute something from our resources,” Jochen Flasbarth, State Secretary at the BMZ, told Table Media, “but it is impossible that we can close the gap this way”.
Jan Kowalzig, a financial expert at the development organization Oxfam, fears that the pressure from the Ministry of Finance could lead to cuts of urgently needed funds, for example in education. “We are also hearing that the ministries are indirectly being asked to do some creative accounting – that is, to declare funds as climate funds that are not actually climate funds, to improve the government’s balance sheet.”
For 2025, however, the German government has promised to significantly increase financing: At that point, Germany is expected to provide “at least 6 billion euros” in international climate financing. Development groups and also the ministries for development, climate action and environment argue that a “steady build-up path” is necessary to achieve this, reducing the step between the 4.6 billion now forecast and the six billion promised in the 2024 budget.
Oxfam, for example, is demanding Germany increase its international climate aid to a total of eight billion euros – arguing that it would be the fair share of the world’s fourth-largest economy on climate financing.
Compared to other developed countries, however, Germany is one of the most important donors. The US government, for example, faces great problems in securing funds for international climate financing from Congress. The UK has also drastically cut its official aid.
The next conference on the regular replenishment of the UN’s Green Climate Fund is scheduled for autumn in Bonn. Since 2014, about three dozen countries have voluntarily contributed a total of about 17 billion dollars to this fund for climate action and adaptation in developing countries.
Germany has paid about 2.3 billion into the GCF so far. In the current draft budget, up to 2 billion euros are earmarked for replenishment this year. Whether it all flows out will also depend on how the other developed countries open their coffers – and whether, for the first time, wealthy oil states like COP28 host the United Arab Emirates will do the same.
The Fit-for-55 package contains a lot of market economy, some regulatory law and a great deal of hope for innovation, with the aim of paving the way for the EU Climate Goal 2030. The reform of the European Emissions Trading System (ETS) and the introduction of the Carbon Border Adjustment Mechanism (CBAM) are the major market-based instruments of the climate protection package and the heart of the Green Deal. On Tuesday, the Council adopted the ETS reform and the CBAM final. The two laws can now be published in the EU Official Journal and thus come into effect. The CO2 fleet targets for cars and the ramp-up of the EU-wide charging infrastructure (AFIR) are regulatory measures, and the efficiency requirements in the battery regulation rely mainly on technological advancement in the future.
However, as soon as the essential parts of the package are cast into law in final form and accepted by all EU institutions, the question arises about the next goal and which instruments are suitable for it. If the target for 2030 is still around 55 percent CO2 reductions, it could be up to 90 percent for 2040, as dictated by Brussels. The European Commission has already begun discussions on this goal and the measures needed. An impact assessment will be published in the spring of 2024, and a draft law for the new climate goal is expected to be proposed in 2026.
One important question already raised by the Commission’s announcement is the role of CO2 removals for the Climate Goal 2040. The EPP’s demand is clear: Negative emissions must be integrated into the ETS. ETS rapporteur Peter Liese even wanted to anchor this in the current reform, as ambitious climate goals would be difficult to achieve without carbon removal technologies, he says. Liese could not prevail. And the discussions are unlikely to be easier with the next intermediate goal on the way to climate neutrality by 2050, as resistance is unbroken.
Michael Bloss, environmental policy spokesman for the Greens in the European Parliament and former ETS shadow rapporteur, fears a weakening of climate action if negative emissions in the ETS can be monetized. The ETS is not a money-printing machine for the economy. “The fixed cap on emissions in the ETS is intended to ensure CO2 reductions.” Otherwise, the ETS would be worthless, and a CO2 tax should be introduced instead, says Bloss.
Liese argues that demand for negative emissions would increase if companies could use them to achieve their climate goals. Investments in technologies such as Direct Air Capture (DAC) and long-term carbon storage (Carbon Capture and Storage, CCS), as well as storage in products (Carbon Capture and Utilization, CCU), could thus increase massively and become profitable. “How do we plan to achieve negative emissions on a large scale in 20 years if we do not improve the technology now?” asks Liese.
While it may make sense from a business perspective, according to Anne Gläser, CO2 price expert at Germanwatch, CO2 reductions must take priority from a climate action perspective. “Before 2040, we should not focus on investing resources in the development of carbon removal technologies that we then lack for investments in emission reduction.”
There is no doubt that these technologies are needed to achieve climate goals. The Intergovernmental Panel on Climate Change (IPCC) explicitly points to this possibility. Michael Bloss does not want to ban them but rather wants to use them to compensate for emissions from sectors that cannot be fully decarbonized after 2050. However, he believes that diluting the fixed cap on CO2 emissions in the ETS is the wrong way to go, as Bloss says it only concerns “3 percent of the sectors that are not fully decarbonizable.”
Liese also does not want to soften the cap, at least in the short term. But the CDU politician argues that incentives for CO2 removals must be given long before 2040 if Germany wants to be climate neutral by 2045 and Europe by 2050. “Especially since the technology is currently very expensive and not yet market-ready, we must start quickly.”
It is important to distinguish between permanent removals, such as the production of bricks from captured carbon or the underground storage of CO2, and non-permanent removals. “Permanent removals should be fully recognized, while for non-permanent removals, of course, deductions must be made.” Carbon farming, which involves storing carbon in soil or wood, as well as storing it in chemical products, is also considered a non-permanent storage method.
Michael Bloss doubts the effectiveness of such methods and recalls the Clean Development Mechanism (CDM) from the Kyoto Protocol. Companies had the opportunity to purchase certificates for external CO2 reductions or CO2 avoidance to achieve their own climate goals. The system is now considered a failure because it did not provide the desired emissions reductions and enabled greenwashing. Stored CO2 was not permanently bound, yet companies could at least neutralize their emissions on paper.
Although CO2 price expert Gläser believes that the EU has learned from the mistakes of the CDM and now realizes that stricter certification requirements are needed, the problem that carbon removals in the ETS reduce incentives for the green transition, as was already the case with the CDM, still exists, according to Gläser.
Liese has an idea for solving the problem. He suggests an insurance system to create compensation for stored amounts of CO2 that may be released back into the atmosphere earlier than planned due to unforeseen events such as forest fires. An ETS market participant and certificate buyer would pay a higher amount to the provider of carbon removals than would be typical for a CO2 certificate in the ETS. The difference would go into an insurance fund. If the bound CO2 were to leak back into the atmosphere earlier than planned, the insurance would buy the corresponding amount of CO2 certificates back from the market. Liese believes this would guarantee reductions.
Scientists are still cautious about how useful the integration of CO2 removals into the ETS is. Although the researchers at the Potsdam Institute for Climate Impact Research (PIK) generally believe that integration is feasible in the near future, carbon farming and permanent storage in products should not play a role, only stored CO2 volumes. The PIK researchers also point to the problem of supply uncertainty in the ETS through the issuance of negative emission certificates. This could “destabilize the market and lead to excessive price volatility”.
No country currently emits as much greenhouse gases per year as China, the world’s second-largest economy. Global climate action can only succeed with China. But China is using the climate and energy transition to serve its own interests. And in certain areas, it is now the more powerful partner. This is one of the conclusions of the China Strategy 2023 conference hosted by Table.Media on Tuesday.
On the path to a net-zero global economy, China is a crucial player for several reasons:
China is the driving force behind the global energy transition, said Roland Roesch, Acting Director at the Innovation and Technology Center of the International Renewable Energy Agency (IRENA). A large part of the global investments in renewables are made on the Chinese market, he said. And as soon as China decides to invest in important technologies such as hydrogen, batteries or smart meters, this will enable considerable economies of scale and thus open up the opportunity for manufacturers to sharply reduce costs.
German companies could therefore not afford to be absent from the Chinese market, said Roesch. At the same time, China has thanks to its role in the refining and processing of many raw materials critical for the energy transition a “strong position that makes cooperation necessary”.
How equal can cooperation be under such circumstances? IRENA gives governments a platform to consult each other on the progress of the energy transition. On the podium, Roesch praised the “transparent manner” with which China is involved in the talks. The country attaches importance to cooperation and “fair ways“.
Christian Hochfeld, on the other hand, was reluctant to speak of cooperation at eye level: The German economy is “massively dependent on the German car manufacturers that are active on the Chinese market,” said the Director of the think tank Agora Verkehrswende. As soon as “any vehicles are not registered there, we don’t just have a fever, but a serious illness in the German economy.”
The trend in the Chinese car market is currently toward electric mobility. Not so much because of regulation, according to Hochfeld – but simply because many customers now prefer EVs. German car brands are having a hard time competing. China is no longer dependent on cooperation with Germany when it comes to electric mobility, Hochfeld emphasized.
Another requirement for cooperation on an eye-level basis is “that we credibly stand for climate action,” Hochfeld said. At the moment, that is not the case: “The fact that we in Germany are breaking the law, not taking our own climate action law seriously, absolving ministers of their legal obligations,” and then placing demands upon the Chinese side: “I don’t consider that to be eye level.”
Geopolitical interests – in addition to national climate efforts – shape Chinese climate policy, said Margot Schueller, a China researcher at the German Institute for Global and Area Studies (GIGA). Since January 2017, when President Xi Jinping announced that China would stick to the Paris Agreement despite the US withdrawal, the country has also used climate diplomacy to strengthen its geopolitical position, she said.
Western donor countries, by contrast, have repeatedly broken their climate finance promises. This has led to a loss of trust in the countries of the Global South, lamented Belinda Schaepe, a policy advisor on climate diplomacy and EU-China relations at the think tank E3G.
Schaepe praised cooperation with China at the technical level, for example regarding the design of emissions markets or the creation of eco-friendly financial standards. But this technical cooperation has its limits, for example, wherever China completely dominates supply chains for goods important to climate policy. These include solar cells and batteries. Here, she unequivocally calls for “de-risking”.
In our own interest, the search for new partners must “move much more strongly in the direction of the Global South,” Schaepe demanded. However, the industrialized countries should not see the developing countries as mere sources of raw materials, but as equal partners in order to be able to keep up in the competition for global influence. Climate policy also plays a major role in this regard, she said.
Lithium is a key element in the global energy transition and is of national importance to Chile. The Chilean government is now planning to nationalize the sector. To this end, President Gabriel Boric presented his “National Lithium Policy” last week.
Chile, which is currently the world’s second-largest lithium producer after Australia and holds the largest known reserves, exported lithium carbonate worth 7.7 billion dollars in 2022. The left-wing politician Boric, who was elected as president in March 2022, now wants to transform Chile into the world’s largest lithium producer.
In a televised speech, he outlined the five pillars of his policy. The plan is to:
State-owned CODELCO, the world’s largest copper producer, will be tasked with setting up the new state-owned lithium company, which will have a majority stake in all future lithium projects. The existing mining licenses with SQM (Sociedad Quimica y Minera de Chile) and Albemarle, which expire in 2030 and 2043 respectively, will remain valid, Boric said. However, CODELCO will be instructed to renegotiate the contracts.
His plans need to be approved in the second half of 2023 by Congress, where the president’s party does not hold a majority.
What exactly the planned nationalization means for international companies is still uncertain. Obtaining Chilean lithium could become more difficult in the future. Companies that require lithium must diversify more. And focus more on alternatives such as sodium-ion batteries that do not require lithium – which the first car manufacturers are already doing. Lithium recycling could also become more important in the future. At the moment, however, it is still in its infancy. se/maw
Austria originally wanted to reach net zero as early as 2040 – at least that’s what the current coalition agreed to in a government agreement in 2020. But a forecast by the Austrian Environment Agency suggests that some 33 million tonnes of CO2 would still be emitted in 2040 if the current measures for the sectors not covered by the EU emissions trading system (transport, buildings, agriculture and waste) will remain in place. The 2030 climate target of 29 million tonnes of CO2 emissions would also be missed according to the calculations – almost 42 million tonnes are projected.
The dramatic aspect of these numbers is the discrepancy between the CO2 reductions already achieved and those still outstanding. In 2005 – the reference year against which CO2 reductions are measured – Austria emitted 56.2 million tons of CO2 equivalent. In 2021, the figure was still just under 49 million tons – only slightly less than the targets. Whereas in the 16 years until 2021, only 7 million tonnes were saved (-13 percent), in the 9 years until 2030 it would have to be another almost 20 million tonnes cut to reach the EU’s climate target (-47.5 percent).
An even further look into the future and the forecast for 2050 also give little reason for hope. Just under 30 million tons of CO2 equivalent would still be emitted – and that in the year in which the entire EU already plans to have reached net zero. luk
The supposed “climate chancellor” is not making Germany look good. Olaf Scholz announced that Germany intends to develop new gas fields off the coast of Senegal, supported Transport Minister Wissing’s week-long blockade of negotiated EU-wide emissions standards for cars, and pressed for watering down the CO2 sector targets in the Climate Change Act. He has also so far failed to give further impetus to the economic momentum behind renewables with his political support.
This sobering conclusion jeopardizes Germany’s international climate policy reputation. The efficacy of Germany’s climate diplomacy is also at stake. Because it will be difficult to persuade global partners to make more ambitious climate commitments or to enter into the urgently needed raw materials, hydrogen and energy partnerships if the German government fails to deliver back home.
In the coming week, Foreign Minister Annalena Baerbock is co-hosting the 14th Petersberg Climate Dialogue (PKD) with the presidency of this year’s COP28 climate conference in the United Arab Emirates (UAE). Former Chancellor Angela Merkel had traditionally used the PCD stage to display Germany’s credibility through strong climate policy announcements and new international climate finance pledges. But Chancellor Scholz missed this opportunity last year.
This year’s PCD is his chance to make up for this and change course. The forum is an essential milestone in the run-up to the COP; it offers ministers the chance to exchange constructive proposals in an informal setting. Scholz’s speech at such an important juncture for Germany’s foreign climate policy will be watched internationally with great attention.
Scholz can use the spotlight to boost his climate credibility by making ambitious announcements:
Jule Koenneke is a Policy Advisor in the think tank E3G’s Geopolitics, Diplomacy and Security team. Steffen Menzel is Programme Lead for Climate Diplomacy and Geopolitics at E3G
Sebastian Seiffert’s birthday is September 23, 1979, the last day of the first-ever world climate conference – so it is fitting that the professor for physical chemistry of polymers is committed to climate action. And he has done so successfully that he was now honored for it on April 25: With the Ars-Legendi Faculty Award 2023 for excellent university teaching in the chemistry faculty. The award is primarily for the interactive teaching of the professor at the Johannes Gutenberg University in Mainz.
His interest in the subject was sparked by an email: In 2019, Scientists for Future called on lecturers at universities to combine a lecture with a focus on climate change. “Physical chemistry is a great fit,” Seiffert says. “I held a special lesson in my introductory lecture.” The dean’s office liked the idea; a suggestion to post the lecture on YouTube followed. “I then thought to myself that it needs to be really good now,” Seifert recalls. “Then, when I delved deeper into the topic, the penny dropped.”
Seiffert records many of his lectures in advance and reviews them online every week. In the auditorium, he has students work in small teams to discuss the questions that were most frequently answered incorrectly. “The right one prevails because there are better arguments for it,” Seiffert says. The method is well received on campus, he says: “Students have nominated me for the award on their own, and that’s what matters most to me about it.”
Seiffert’s passion for passing on knowledge also shapes his perspective on the climate crisis: “I keep hearing that we don’t have a knowledge problem, but an action problem,” says Seiffert. He can only agree with that to a limited extent, he says. “Mankind has the knowledge, but just not all humans. That’s true even for academics and decision-makers.” Just a few years ago, the chemistry professor himself regularly traveled the globe for lectures, but that has changed now, he says. “There used to be only one problem for me on an eight-hour flight: jet lag.”
In 2021, Seiffert ran for the climate list in the German parliamentary elections. Currently, he is shifting his research focus to water technologies, including topics such as seawater desalination. “Climate adaptation is still much less in the limelight than climate change mitigation,” Seiffert points out. ” Yet we have to be prepared to live with what’s coming.”
He is most concerned about methane: Many people have understood the effect of CO2, but this awareness is still lacking when it comes to methane. The problem: “Over 20 years, methane is more than 80 times as greenhouse-active as CO2. Unlike CO2, it’s not exactly clear where all the methane is coming from,” Seiffert says. “Also, drought is completely underestimated.” Seiffert says he reads a lot about heat waves or floods, but far too little is explained. “I believe that communication should be focused almost entirely on the consequences and impacts of drought.”
To deal with rising temperatures in the future, he believes it is crucial to establish robust water management today. At the same time, the professor also takes a critical view of his own claim: “Climate adaptation carries the risk of becoming a filibuster argument to avoid having to deal with the climate crisis.” Svenja Schlicht
The carousel of climate conferences is spinning again: After the World Bank/IMF meeting and the Major Economies Forum (MEF), the Petersberg Climate Dialogue is coming up next week. Behind closed doors, the focus will be on what is possible at the COP in Dubai – and of course, as always, on money.
But Germany is currently playing an unsavory role in this, as we report. Because if the German budget for 2024 is cut as planned, there will probably be less money left over for international climate action. At the Climate Dialogue, Chancellor Olaf Scholz would have the chance to put something substantial on the table – just as his predecessor Angela Merkel often did. Our op-ed by the environmental think tank E3G warns: he should do just that. Perhaps Scholz really will reveal how he intends to keep his promise of handing out a total of six billion euros for climate finance in 2025.
Elsewhere, too, there is a lot to report on climate issues: Austria is struggling for the path to net zero; the oceans report a new heat record; EV sales are booming. Things stay interesting and exciting
One week before the high-level Petersberg Climate Dialogue in Berlin is held, which will also focus on international climate financing, Germany’s contribution remains uncertain. Although Germany has pledged a strong increase for 2025, the flow of money from Germany will initially be lower next year, according to current plans. There is currently a gap of about 1.4 billion euros to the 6 billion euros the German government has pledged for 2025. Whether and to what extent this gap will be closed in the 2024 federal budget is still disputed in the government coalition.
At this year’s traditional 14th Petersberg Climate Dialogue, around 40 delegations will meet in private to prepare for the negotiations of the next UN Climate Change Conference. In addition to the current and upcoming COP presidents, government representatives of the most important countries from the EU, the USA, China and other emerging and developing countries will be attending. At the time, German Chancellor Angela Merkel announced in 2015 that she would double Germany’s international climate financing from 2 to 4 billion euros by 2020. It is not yet clear whether Chancellor Olaf Scholz will also address the topic in his speech at this year’s Petersberg Conference next Wednesday.
This year, climate finance issues are once again at the top of the agenda, as the details of loss and damage are to be resolved at COP28. The poorer countries, in particular, are still expecting the developed countries to fulfill their 2020 pledge to mobilize 100 billion dollars annually for climate action and adaptation. So far, only about 83 billion have been raised.
According to current plans, however, Germany’s contribution to international climate financing could decrease in this decisive phase. In 2021, Germany spent about 5.34 billion euros on international climate action, according to the German Ministry for Economic Cooperation and Development (BMZ). There are no final figures for 2022 yet, but experts expect the sum to roughly remain the same. Germany’s climate spending is generally difficult to forecast because it depends on how high the BMZ’s budget is, how much other ministries contribute and which projects are signed with emerging and developing countries.
Even in the current year 2023, the BMZ budget has hardly changed, with a good 12 billion euros, and the share of climate finance could thus roughly maintain the level of 5.3 billion. But according to the German government’s medium-term budget plans, things are looking much worse for 2024: The BMZ budget will only reach 10.7 billion according to the current budget plans. With the same distribution in the budget of BMZ and other ministries, this would leave only about 4.6 billion euros for German climate spending.
Finance Minister Christian Lindner (FDP) put the submission of the 2024 budget on hold in March until all details have been clarified. In response to a query, his ministry stated that it could not “comment on the ongoing budget negotiations on the 2024 federal budget“. In these negotiations, the Ministry of Finance is now urging the respective ministries to internally reallocate their funds toward more climate action, the government states.
To reallocate funds, the ministries could divert money for education or agriculture into climate finance. About 88 percent of international climate financing is channeled through the BMZ, the rest is divided between the ministries of economics, environment and foreign affairs. “We will make an effort to contribute something from our resources,” Jochen Flasbarth, State Secretary at the BMZ, told Table Media, “but it is impossible that we can close the gap this way”.
Jan Kowalzig, a financial expert at the development organization Oxfam, fears that the pressure from the Ministry of Finance could lead to cuts of urgently needed funds, for example in education. “We are also hearing that the ministries are indirectly being asked to do some creative accounting – that is, to declare funds as climate funds that are not actually climate funds, to improve the government’s balance sheet.”
For 2025, however, the German government has promised to significantly increase financing: At that point, Germany is expected to provide “at least 6 billion euros” in international climate financing. Development groups and also the ministries for development, climate action and environment argue that a “steady build-up path” is necessary to achieve this, reducing the step between the 4.6 billion now forecast and the six billion promised in the 2024 budget.
Oxfam, for example, is demanding Germany increase its international climate aid to a total of eight billion euros – arguing that it would be the fair share of the world’s fourth-largest economy on climate financing.
Compared to other developed countries, however, Germany is one of the most important donors. The US government, for example, faces great problems in securing funds for international climate financing from Congress. The UK has also drastically cut its official aid.
The next conference on the regular replenishment of the UN’s Green Climate Fund is scheduled for autumn in Bonn. Since 2014, about three dozen countries have voluntarily contributed a total of about 17 billion dollars to this fund for climate action and adaptation in developing countries.
Germany has paid about 2.3 billion into the GCF so far. In the current draft budget, up to 2 billion euros are earmarked for replenishment this year. Whether it all flows out will also depend on how the other developed countries open their coffers – and whether, for the first time, wealthy oil states like COP28 host the United Arab Emirates will do the same.
The Fit-for-55 package contains a lot of market economy, some regulatory law and a great deal of hope for innovation, with the aim of paving the way for the EU Climate Goal 2030. The reform of the European Emissions Trading System (ETS) and the introduction of the Carbon Border Adjustment Mechanism (CBAM) are the major market-based instruments of the climate protection package and the heart of the Green Deal. On Tuesday, the Council adopted the ETS reform and the CBAM final. The two laws can now be published in the EU Official Journal and thus come into effect. The CO2 fleet targets for cars and the ramp-up of the EU-wide charging infrastructure (AFIR) are regulatory measures, and the efficiency requirements in the battery regulation rely mainly on technological advancement in the future.
However, as soon as the essential parts of the package are cast into law in final form and accepted by all EU institutions, the question arises about the next goal and which instruments are suitable for it. If the target for 2030 is still around 55 percent CO2 reductions, it could be up to 90 percent for 2040, as dictated by Brussels. The European Commission has already begun discussions on this goal and the measures needed. An impact assessment will be published in the spring of 2024, and a draft law for the new climate goal is expected to be proposed in 2026.
One important question already raised by the Commission’s announcement is the role of CO2 removals for the Climate Goal 2040. The EPP’s demand is clear: Negative emissions must be integrated into the ETS. ETS rapporteur Peter Liese even wanted to anchor this in the current reform, as ambitious climate goals would be difficult to achieve without carbon removal technologies, he says. Liese could not prevail. And the discussions are unlikely to be easier with the next intermediate goal on the way to climate neutrality by 2050, as resistance is unbroken.
Michael Bloss, environmental policy spokesman for the Greens in the European Parliament and former ETS shadow rapporteur, fears a weakening of climate action if negative emissions in the ETS can be monetized. The ETS is not a money-printing machine for the economy. “The fixed cap on emissions in the ETS is intended to ensure CO2 reductions.” Otherwise, the ETS would be worthless, and a CO2 tax should be introduced instead, says Bloss.
Liese argues that demand for negative emissions would increase if companies could use them to achieve their climate goals. Investments in technologies such as Direct Air Capture (DAC) and long-term carbon storage (Carbon Capture and Storage, CCS), as well as storage in products (Carbon Capture and Utilization, CCU), could thus increase massively and become profitable. “How do we plan to achieve negative emissions on a large scale in 20 years if we do not improve the technology now?” asks Liese.
While it may make sense from a business perspective, according to Anne Gläser, CO2 price expert at Germanwatch, CO2 reductions must take priority from a climate action perspective. “Before 2040, we should not focus on investing resources in the development of carbon removal technologies that we then lack for investments in emission reduction.”
There is no doubt that these technologies are needed to achieve climate goals. The Intergovernmental Panel on Climate Change (IPCC) explicitly points to this possibility. Michael Bloss does not want to ban them but rather wants to use them to compensate for emissions from sectors that cannot be fully decarbonized after 2050. However, he believes that diluting the fixed cap on CO2 emissions in the ETS is the wrong way to go, as Bloss says it only concerns “3 percent of the sectors that are not fully decarbonizable.”
Liese also does not want to soften the cap, at least in the short term. But the CDU politician argues that incentives for CO2 removals must be given long before 2040 if Germany wants to be climate neutral by 2045 and Europe by 2050. “Especially since the technology is currently very expensive and not yet market-ready, we must start quickly.”
It is important to distinguish between permanent removals, such as the production of bricks from captured carbon or the underground storage of CO2, and non-permanent removals. “Permanent removals should be fully recognized, while for non-permanent removals, of course, deductions must be made.” Carbon farming, which involves storing carbon in soil or wood, as well as storing it in chemical products, is also considered a non-permanent storage method.
Michael Bloss doubts the effectiveness of such methods and recalls the Clean Development Mechanism (CDM) from the Kyoto Protocol. Companies had the opportunity to purchase certificates for external CO2 reductions or CO2 avoidance to achieve their own climate goals. The system is now considered a failure because it did not provide the desired emissions reductions and enabled greenwashing. Stored CO2 was not permanently bound, yet companies could at least neutralize their emissions on paper.
Although CO2 price expert Gläser believes that the EU has learned from the mistakes of the CDM and now realizes that stricter certification requirements are needed, the problem that carbon removals in the ETS reduce incentives for the green transition, as was already the case with the CDM, still exists, according to Gläser.
Liese has an idea for solving the problem. He suggests an insurance system to create compensation for stored amounts of CO2 that may be released back into the atmosphere earlier than planned due to unforeseen events such as forest fires. An ETS market participant and certificate buyer would pay a higher amount to the provider of carbon removals than would be typical for a CO2 certificate in the ETS. The difference would go into an insurance fund. If the bound CO2 were to leak back into the atmosphere earlier than planned, the insurance would buy the corresponding amount of CO2 certificates back from the market. Liese believes this would guarantee reductions.
Scientists are still cautious about how useful the integration of CO2 removals into the ETS is. Although the researchers at the Potsdam Institute for Climate Impact Research (PIK) generally believe that integration is feasible in the near future, carbon farming and permanent storage in products should not play a role, only stored CO2 volumes. The PIK researchers also point to the problem of supply uncertainty in the ETS through the issuance of negative emission certificates. This could “destabilize the market and lead to excessive price volatility”.
No country currently emits as much greenhouse gases per year as China, the world’s second-largest economy. Global climate action can only succeed with China. But China is using the climate and energy transition to serve its own interests. And in certain areas, it is now the more powerful partner. This is one of the conclusions of the China Strategy 2023 conference hosted by Table.Media on Tuesday.
On the path to a net-zero global economy, China is a crucial player for several reasons:
China is the driving force behind the global energy transition, said Roland Roesch, Acting Director at the Innovation and Technology Center of the International Renewable Energy Agency (IRENA). A large part of the global investments in renewables are made on the Chinese market, he said. And as soon as China decides to invest in important technologies such as hydrogen, batteries or smart meters, this will enable considerable economies of scale and thus open up the opportunity for manufacturers to sharply reduce costs.
German companies could therefore not afford to be absent from the Chinese market, said Roesch. At the same time, China has thanks to its role in the refining and processing of many raw materials critical for the energy transition a “strong position that makes cooperation necessary”.
How equal can cooperation be under such circumstances? IRENA gives governments a platform to consult each other on the progress of the energy transition. On the podium, Roesch praised the “transparent manner” with which China is involved in the talks. The country attaches importance to cooperation and “fair ways“.
Christian Hochfeld, on the other hand, was reluctant to speak of cooperation at eye level: The German economy is “massively dependent on the German car manufacturers that are active on the Chinese market,” said the Director of the think tank Agora Verkehrswende. As soon as “any vehicles are not registered there, we don’t just have a fever, but a serious illness in the German economy.”
The trend in the Chinese car market is currently toward electric mobility. Not so much because of regulation, according to Hochfeld – but simply because many customers now prefer EVs. German car brands are having a hard time competing. China is no longer dependent on cooperation with Germany when it comes to electric mobility, Hochfeld emphasized.
Another requirement for cooperation on an eye-level basis is “that we credibly stand for climate action,” Hochfeld said. At the moment, that is not the case: “The fact that we in Germany are breaking the law, not taking our own climate action law seriously, absolving ministers of their legal obligations,” and then placing demands upon the Chinese side: “I don’t consider that to be eye level.”
Geopolitical interests – in addition to national climate efforts – shape Chinese climate policy, said Margot Schueller, a China researcher at the German Institute for Global and Area Studies (GIGA). Since January 2017, when President Xi Jinping announced that China would stick to the Paris Agreement despite the US withdrawal, the country has also used climate diplomacy to strengthen its geopolitical position, she said.
Western donor countries, by contrast, have repeatedly broken their climate finance promises. This has led to a loss of trust in the countries of the Global South, lamented Belinda Schaepe, a policy advisor on climate diplomacy and EU-China relations at the think tank E3G.
Schaepe praised cooperation with China at the technical level, for example regarding the design of emissions markets or the creation of eco-friendly financial standards. But this technical cooperation has its limits, for example, wherever China completely dominates supply chains for goods important to climate policy. These include solar cells and batteries. Here, she unequivocally calls for “de-risking”.
In our own interest, the search for new partners must “move much more strongly in the direction of the Global South,” Schaepe demanded. However, the industrialized countries should not see the developing countries as mere sources of raw materials, but as equal partners in order to be able to keep up in the competition for global influence. Climate policy also plays a major role in this regard, she said.
Lithium is a key element in the global energy transition and is of national importance to Chile. The Chilean government is now planning to nationalize the sector. To this end, President Gabriel Boric presented his “National Lithium Policy” last week.
Chile, which is currently the world’s second-largest lithium producer after Australia and holds the largest known reserves, exported lithium carbonate worth 7.7 billion dollars in 2022. The left-wing politician Boric, who was elected as president in March 2022, now wants to transform Chile into the world’s largest lithium producer.
In a televised speech, he outlined the five pillars of his policy. The plan is to:
State-owned CODELCO, the world’s largest copper producer, will be tasked with setting up the new state-owned lithium company, which will have a majority stake in all future lithium projects. The existing mining licenses with SQM (Sociedad Quimica y Minera de Chile) and Albemarle, which expire in 2030 and 2043 respectively, will remain valid, Boric said. However, CODELCO will be instructed to renegotiate the contracts.
His plans need to be approved in the second half of 2023 by Congress, where the president’s party does not hold a majority.
What exactly the planned nationalization means for international companies is still uncertain. Obtaining Chilean lithium could become more difficult in the future. Companies that require lithium must diversify more. And focus more on alternatives such as sodium-ion batteries that do not require lithium – which the first car manufacturers are already doing. Lithium recycling could also become more important in the future. At the moment, however, it is still in its infancy. se/maw
Austria originally wanted to reach net zero as early as 2040 – at least that’s what the current coalition agreed to in a government agreement in 2020. But a forecast by the Austrian Environment Agency suggests that some 33 million tonnes of CO2 would still be emitted in 2040 if the current measures for the sectors not covered by the EU emissions trading system (transport, buildings, agriculture and waste) will remain in place. The 2030 climate target of 29 million tonnes of CO2 emissions would also be missed according to the calculations – almost 42 million tonnes are projected.
The dramatic aspect of these numbers is the discrepancy between the CO2 reductions already achieved and those still outstanding. In 2005 – the reference year against which CO2 reductions are measured – Austria emitted 56.2 million tons of CO2 equivalent. In 2021, the figure was still just under 49 million tons – only slightly less than the targets. Whereas in the 16 years until 2021, only 7 million tonnes were saved (-13 percent), in the 9 years until 2030 it would have to be another almost 20 million tonnes cut to reach the EU’s climate target (-47.5 percent).
An even further look into the future and the forecast for 2050 also give little reason for hope. Just under 30 million tons of CO2 equivalent would still be emitted – and that in the year in which the entire EU already plans to have reached net zero. luk
The supposed “climate chancellor” is not making Germany look good. Olaf Scholz announced that Germany intends to develop new gas fields off the coast of Senegal, supported Transport Minister Wissing’s week-long blockade of negotiated EU-wide emissions standards for cars, and pressed for watering down the CO2 sector targets in the Climate Change Act. He has also so far failed to give further impetus to the economic momentum behind renewables with his political support.
This sobering conclusion jeopardizes Germany’s international climate policy reputation. The efficacy of Germany’s climate diplomacy is also at stake. Because it will be difficult to persuade global partners to make more ambitious climate commitments or to enter into the urgently needed raw materials, hydrogen and energy partnerships if the German government fails to deliver back home.
In the coming week, Foreign Minister Annalena Baerbock is co-hosting the 14th Petersberg Climate Dialogue (PKD) with the presidency of this year’s COP28 climate conference in the United Arab Emirates (UAE). Former Chancellor Angela Merkel had traditionally used the PCD stage to display Germany’s credibility through strong climate policy announcements and new international climate finance pledges. But Chancellor Scholz missed this opportunity last year.
This year’s PCD is his chance to make up for this and change course. The forum is an essential milestone in the run-up to the COP; it offers ministers the chance to exchange constructive proposals in an informal setting. Scholz’s speech at such an important juncture for Germany’s foreign climate policy will be watched internationally with great attention.
Scholz can use the spotlight to boost his climate credibility by making ambitious announcements:
Jule Koenneke is a Policy Advisor in the think tank E3G’s Geopolitics, Diplomacy and Security team. Steffen Menzel is Programme Lead for Climate Diplomacy and Geopolitics at E3G
Sebastian Seiffert’s birthday is September 23, 1979, the last day of the first-ever world climate conference – so it is fitting that the professor for physical chemistry of polymers is committed to climate action. And he has done so successfully that he was now honored for it on April 25: With the Ars-Legendi Faculty Award 2023 for excellent university teaching in the chemistry faculty. The award is primarily for the interactive teaching of the professor at the Johannes Gutenberg University in Mainz.
His interest in the subject was sparked by an email: In 2019, Scientists for Future called on lecturers at universities to combine a lecture with a focus on climate change. “Physical chemistry is a great fit,” Seiffert says. “I held a special lesson in my introductory lecture.” The dean’s office liked the idea; a suggestion to post the lecture on YouTube followed. “I then thought to myself that it needs to be really good now,” Seifert recalls. “Then, when I delved deeper into the topic, the penny dropped.”
Seiffert records many of his lectures in advance and reviews them online every week. In the auditorium, he has students work in small teams to discuss the questions that were most frequently answered incorrectly. “The right one prevails because there are better arguments for it,” Seiffert says. The method is well received on campus, he says: “Students have nominated me for the award on their own, and that’s what matters most to me about it.”
Seiffert’s passion for passing on knowledge also shapes his perspective on the climate crisis: “I keep hearing that we don’t have a knowledge problem, but an action problem,” says Seiffert. He can only agree with that to a limited extent, he says. “Mankind has the knowledge, but just not all humans. That’s true even for academics and decision-makers.” Just a few years ago, the chemistry professor himself regularly traveled the globe for lectures, but that has changed now, he says. “There used to be only one problem for me on an eight-hour flight: jet lag.”
In 2021, Seiffert ran for the climate list in the German parliamentary elections. Currently, he is shifting his research focus to water technologies, including topics such as seawater desalination. “Climate adaptation is still much less in the limelight than climate change mitigation,” Seiffert points out. ” Yet we have to be prepared to live with what’s coming.”
He is most concerned about methane: Many people have understood the effect of CO2, but this awareness is still lacking when it comes to methane. The problem: “Over 20 years, methane is more than 80 times as greenhouse-active as CO2. Unlike CO2, it’s not exactly clear where all the methane is coming from,” Seiffert says. “Also, drought is completely underestimated.” Seiffert says he reads a lot about heat waves or floods, but far too little is explained. “I believe that communication should be focused almost entirely on the consequences and impacts of drought.”
To deal with rising temperatures in the future, he believes it is crucial to establish robust water management today. At the same time, the professor also takes a critical view of his own claim: “Climate adaptation carries the risk of becoming a filibuster argument to avoid having to deal with the climate crisis.” Svenja Schlicht
