Concretely, this means that the automotive industry, for example, must set up competitive and carbon-neutral vehicle and battery production within Europe. With a turnover of € 436 billion, it is Germany’s main industrial sector. By way of comparison: in Germany, the automotive sector employs 833,000 people, or 11.8% of the workforce in the manufacturing industry, against 7.4% in France. But German production lines are designed for combustion engines, which are slated to disappear from our roads in the course of the 2030s. This is the climate imperative, and it puts Germany in a difficult situation. Countries like Japan, which began making electric vehicles early on, are now market leaders, and even battery production is based primarily in other parts of the world. Europe is therefore right to want to set up its own production. However sustainable battery production also involves skills and capacities for battery recycling. This recycling must be envisioned on a Europe-wide scale if the EU is to remain a leader in this technology, and take advantage of synergies and economies of scale.
Basic industries, heavy consumers of energy, also face challenges that are primarily economic in nature, as shown in a study by the Berlin think tank Agora Energiewende. Technically speaking, manufacturing CO2 neutral steel is already possible, for example, but it is far from being competitive. Yet by 2030 many production facilities will need to be updated. In the chemicals industry, industrial process heat must be produced in a way that does not impact the climate - it can be done with electricity, but the process is very expensive. In the aluminum industry, innovative approaches are currently being developed, such as the flexible electrolysis of aluminum; and the cement industry is moving towards carbon neutrality thanks to increases in the proportion of recycled materials used, and more recently, through carbon sequestration. Still, key technologies that are low in CO2 emissions are currently suffering in the face of weak demand for climate-neutral products, and the costs of reducing emissions remain well above the price of CO2 on the emissions market. Since climate protection cannot wait for emissions trading to raise prices sufficiently, it is up to states to set this dynamic in motion by creating the right mix of market incentives, subsidies and regulatory requirements all along the industrial value chain, to accelerate the innovation cycle and encourage investments for the future. These might be new catalysts, innovative processes using biomass, e-crackers, cement recycling, heating processes based on current and hydrogen, or even digital processes.
The development of these new technological and climate-neutral processes is in itself an opportunity for German and European industrial facilities to position themselves against global competition. After all, the EU’s goal should be to set new global standards for carbon-neutral products and technologies, and to supply the constantly growing market for environmentally friendly products.
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