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Germany Sectors

What is Germanyʼs pathway to limit global warming to 1.5°C?

Emissions from the industry sector decreased by 41% between 1990s and 2021 – only slightly faster than overall emissions.22 Energy-related emissions decreased faster than process-related emissions mostly due to improving efficiency of East German industry after the reunification in the early 1990s.

Electrification combined with energy efficiency measures are the main drivers to decrease energy related emissions in the industry sector according to the 1.5°C compatible pathway. Such scenarios assume an increase in the share of energy consumed as electricity to increase from 34% in 2019 to 47% in 2030 and between 64-67% in 2050, as the sector gets electrified.

Significant reduction of process related emissions will in many cases require different technologies, e.g. application of green hydrogen for steel production. Some German companies are taking positive steps in this direction, e.g. Thyssen Krupp aims to make its steel “climate neutral” by 2045 and is deploying first pilot projects to achieve this goal.25,26 Another option is replacement of existing high carbon materials by low carbon alternatives (e.g. for cement) as well as recycling (e.g. steel scrap). Implementation of some of these measures could accelerate emissions reductions in the sector.

The main policy driver of emissions reduction in Germany is carbon pricing through the EU Emissions Trading System. To decrease the potential threat of carbon leakage, many industry sectors receive from allowances, which reduces the scheme’s effectiveness on decarbonisation. Introducing Carbon Border Adjustment Mechanism, combined with phase-out of free allowances would accelerate decarbonisation of the sector. Using such instruments as Carbon Contracts for Difference could facilitate deployment of low carbon technologies.

1 BMU. Lesefassung des Bundes-Klimaschutzgesetzes 2021 mit markierten Änderungen zur Fassung von 2019. (2021).

2 Climate Action Tracker. Germany | Climate Action Tracker. (2020).

3 Climate Action Tracker. Germany’s proposed 2030 national target not yet 1.5˚C-compatible. (2021).

4 European Environment Agency. Trends and Projections in Europe 2020. (2020).

5 Agora Energiewende. Publication – Towards a Climate-Neutral Germany by 2045 (2021).

6 Deutscher Bundestag. Kohleausstiegsgesetz. 2020, 202 (2020).

7 Deutscher Bundestag. Gesetz für den Ausbau erneuerbarer Energien (ErneuerbareEnergien-Gesetz – EEG 2021). (2021).

8 Statistisches Bundesamt. Jährliche Erdgasimporte – Statistisches Bundesamt. (2020).

9 AG-Energiebilanzen. Strommix. (2021).

10 Handelsblattt. Ende der Windpark-Förderung: Gigantischer Rückbau der Windenergie. (2020).

11 Tagesschau. Energiewende in Deutschland: Der Windkraftausbau stockt massiv | tagesschau.de. (2021).

12 Umweltbundesamt. Previous year’s estimate of German greenhouse gas emissions for 2020. (2021).

13 European Environment Agency (EEA). Member States’ greenhouse gas (GHG) emission projections. (2021).

14 Eurostat. Complete energy balances. (2022).

15 Umweltbundesamt (UBA). Erneuerbare Energien in Zahlen. Umweltbundesamt (UBA) (2022).

16 Agora Energiewende. Die Energiewende im Corona-Jahr: Stand der Dinge 2020. (2021).

17 Eurostat. Complete energy balances. (2020).

19 Sozialdemokratische Partei Deutschland (SPD), Bündnis 90/Die Grünen & Freien Demokraten (FDP). Mehr Fortschritt wagen – Bündnis für Freiheit, Gerechtigkeit und Nachhaltigkeit. 68 (2021).

20 German Government. Entwurf eines Ersten Gesetzes zur Änderung des Bundes-Klimaschutzgesetzes. (2021).

21 Deutscher Bundestag. Deutscher Bundestag – Bundestag verschärft das Klimaschutzgesetz. (2021).

22 Umweltbundesamt (UBA). Treibhausgas-Emissionen. Umweltbundesamt (UBA). (2022).

23 Umweltbundesamt (UBA). Energieverbrauch nach Energieträgern und Sektoren. Umweltbundesamt (UBA). (2022).

24 Umweltbundesamt (UBA). Entwicklung des Heizenergieverbrauchs (Brandenburg, 2002-2020). (2020).

25 Immoor, K. Green hydrogen for green steel made in Duisburg: STEAG and thyssenkrupp are planning joint hydrogen project. (2020).

26 thyssenkrupp. Klimastrategie von thyssenkrupp Steel Premium-Flachstahl, weniger von CO2. thyssenkrupp AG. (2021).

27 ACEA. Fuel types of new cars: battery electric 9.1%, hybrid 19.6% and petrol 40.0% market share full-year 2021. ACEA. (2022).

28 ACEA. Interactive map – CO2 emissions from new passenger cars in the EU, by country. ACEA. (2021).

29 Climate Analytics. Coal Phase Out Germany / Climate Analytics. (2020).

30 While global cost-effective pathways assessed by the IPCC Special Report 1.5°C provide useful guidance for an upper-limit of emissions trajectories for developed countries, they underestimate the feasible space for such countries to reach net zero earlier. The current generation of models tend to depend strongly on land-use sinks outside of currently developed countries and include fossil fuel use well beyond the time at which these could be phased out, compared to what is understood from bottom-up approaches. The scientific teams which provide these global pathways constantly improve the technologies represented in their models – and novel CDR technologies are now being included in new studies focused on deep mitigation scenarios meeting the Paris Agreement. A wide assessment database of these new scenarios is not yet available, thus we rely on available scenarios which focus particularly on BECCS as a net-negative emission technology. Accordingly, we do not yet consider land-sector emissions (LULUCF) and other CDR approaches which developed countries will need to implement in order to counterbalance their remaining emissions and reach net zero GHG are not considered here due to data availability.

31 Benchmarks here provided are derived from the illustrative pathway CEMICS-1.5-CDR8_REMIND_1.7 (28 MtCO₂e) and the 25th percentile (47 MtCO₂e) of the analysis 1.5°C compatible pathways in this analysis, assessed by the IPCC SR1.5. See methodology section for more information.

32 Confirming previous analysis indicating that: “Germany needs to phase coal out of its electricity sector by 2030 to meet its obligations under the Paris Agreement. This is earlier than the dates discussed so far by the Coal Commission, a body established to come up with a coal exit plan by the end of 2018.”29

33 According to the Carbon Contracts for Difference, investor in low carbon technology (e.g. low carbon steel) receives subsidy that amounts to the different between the cost of producing traditional product and the low carbon alternative. This amount is reduced by what the investor would have to pay in carbon price anyway, e.g. in the framework of the EU ETS.

34 Calculations based on new data from Umweltbundesamt (UBA): www.umweltbundesamt.de/themen/klima-energie/treibhausgas-emissionen.

35 This goal reflects the 55% emissions reduction goal. The new goal for the share of renewables is not yet clear.

Germanyʼs energy mix in the industry sector

petajoule per year

Scaling
SSP1 Low CDR reliance
20192030204020502 0003 000
SSP1 High CDR reliance
20192030204020502 0003 000
Low Energy Demand
20192030204020502 0003 000
High Energy Demand - Low CDR reliance
20192030204020502 0003 000
  • Coal
  • Natural gas
  • Oil and e-fuels
  • Biomass
  • Biofuel
  • Biogas
  • Electricity
  • Heat
  • Hydrogen

Germanyʼs industry sector direct CO₂ emissions (of energy demands)

MtCO₂/yr

Unit
05010015020019902010203020502070
  • Historical emissions
  • SSP1 High CDR reliance
  • High Energy Demand - Low CDR reliance
  • SSP1 Low CDR reliance
  • Low Energy Demand

Germanyʼs GHG emissions from industrial processes

MtCO₂e/yr

02040608010019902010203020502070
  • SSP1 Low CDR reliance
  • SSP1 High CDR reliance
  • Low Energy Demand
  • High Energy Demand - Low CDR reliance
  • Historical emissions

1.5°C compatible industry sector benchmarks

Direct CO₂ emissions and direct electrification rates from illustrative 1.5°C pathways for Germany

Indicator
2019
2030
2040
2050
Decarbonised industry sector by
Direct CO₂ emissions
MtCO₂/yr
116
35 to 56
5 to 27
1 to 7
2037 to 2050
Relative to reference year in %
−70 to −52%
−96 to −77%
−99 to −94%
Indicator
2019
2030
2040
2050
Share of electricity
Percent
34
47
58 to 63
64 to 67
Share of electricity, hydrogren and biomass
Percent
39
50 to 61
62 to 83
70 to 80

Footnotes