COVID-19

Billions for sustainable investments – Germany’s plan for a green recovery

German Chancellor Angela Merkel attends the weekly cabinet meeting, following the outbreak of the coronavirus disease (COVID-19), in Berlin, Germany, June 24, 2020.

Germany has allocated about $46 billion to sustainable investments in areas like renewable power and electric vehicles. Image: REUTERS/Hannibal Hanschke

Harry Kretchmer
Senior Writer, Formative Content
Share:
Our Impact
What's the World Economic Forum doing to accelerate action on COVID-19?
The Big Picture
Explore and monitor how COVID-19 is affecting economies, industries and global issues
A hand holding a looking glass by a lake
Crowdsource Innovation
Get involved with our crowdsourced digital platform to deliver impact at scale
Stay up to date:

COVID-19

  • One third of Germany’s stimulus plan could help lower emissions.
  • Billions are being spent on ‘green hydrogen’ – an energy source that could help to fuel industry – and to subsidise electric vehicles, creating the EU’s most generous EV subsidies.
  • The package reflects widespread calls for a ‘green recovery’.

Germany wants to lead the green recovery – and it’s prepared to spend to get there.

As part of its $145 billion recovery budget, the country's government has allocated some $46 billion to sustainable investments in areas like renewable power and electric vehicles, according to analysis by Bloomberg.

Petrol- and diesel-powered cars – a lucrative industry for Germany – get nothing. Meanwhile, an industry of the future, green hydrogen, stands to benefit from a $9 billion boost.

Have you read?

The move comes as organizations around the world, including the World Economic Forum, call for sustainable growth following the pandemic.

Green transition
Germany unveils plans for a green COVID-19 recovery. Image: Bloomberg

What’s in Germany’s plan?

If approved by the German parliament, around a third of Germany’s $145 billion spending pledges could help bring emissions down.

The biggest single investment, at around $12 billion, is a commitment to help fund power costs, which have risen steeply in recent years. This is because German consumers have borne the cost of decarbonising the system through green levy surcharges. It’s hoped the investment will translate into more renewable energy.

Perhaps the most eye-catching announcement is a $10 billion bet on “green hydrogen”, or “tomorrow’s petroleum” as the country’s research ministry has described it. Hydrogen stores well as an industrial and vehicle fuel but is energy-intensive to produce – unless sufficient amounts of renewable energy can be used to create it, hence green hydrogen.

Around $9 billion is earmarked for electric vehicle (EV) subsidies, which would – according to Bloomberg – make German EV buyers the most well-supported in Europe.

Loading...

Other major commitments include public transport, and most notably the rail system which can create less carbon per passenger than other major forms of travel.

The sustainable direction of these measures is part of a longer-term plan for Germany, a country that has ambitions to be carbon neutral by 2050.

What about other countries?

While the EU has pledged to spend 25% of its budget on climate action, it is not yet clear exactly how much money this will mean in practice for green industries. South Korea has also made sizeable green commitments.

Many other nations are still working on their stimulus plans.

Discover

What’s the World Economic Forum doing about climate change?

And the time for climate alleviation measures looks pressing. While carbon emissions plunged at the height of the crisis, they are heading back up – and fast.

A sustainable recovery

Germany’s investment priorities echo those of an increasing number of businesses, organisations and individuals highlighting the global importance of sustainability being at the forefront of economic recovery.

Loading...

The World Economic Forum is calling for a Great Reset – a commitment to build a fairer, more sustainable and more resilient future following the coronavirus crisis.

And the decisions impacting the future of power and industry are at its heart.

"We have to decarbonise the economy in the short window still remaining and bring our thinking and behaviour once more into harmony with nature,” says Professor Klaus Schwab, World Economic Forum Founder and Executive Chairman.

The question is now: will nations dig deep, risk alienating fossil-fuel-based industries – and follow Germany’s lead?

Loading...
Loading...
Don't miss any update on this topic

Create a free account and access your personalized content collection with our latest publications and analyses.

Sign up for free

License and Republishing

World Economic Forum articles may be republished in accordance with the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International Public License, and in accordance with our Terms of Use.

The views expressed in this article are those of the author alone and not the World Economic Forum.

Related topics:
COVID-19Sustainable DevelopmentESGDavos Agenda
Share:
World Economic Forum logo
Global Agenda

The Agenda Weekly

A weekly update of the most important issues driving the global agenda

Subscribe today

You can unsubscribe at any time using the link in our emails. For more details, review our privacy policy.

Winding down COVAX – lessons learnt from delivering 2 billion COVID-19 vaccinations to lower-income countries

Charlotte Edmond

January 8, 2024

About Us

Events

Media

Partners & Members

  • Join Us

Language Editions

Privacy Policy & Terms of Service

© 2024 World Economic Forum