In December of 2022, the Transatlantic Climate Bridge hosted a legislative study trip for state and provincial legislators from the Midwest United States and Canada, in collaboration with the Council of State Governments Midwest. The legislators on the trip all came from a background of having engaged with energy and climate. Their experience ranged from acting as shadow ministers for energy and climate, to sitting on energy and environmental subcommittees, to professional experience in the field. The trip provided an opportunity to meet government representatives and industry leaders who work towards the German Energiewende (energy transition), as well as tour organizations and facilities where this work is being put into practice.
Germany has an ambitious climate target to reach net-zero greenhouse gas emissions by 2045 and through its policies, has implicitly enlisted its industries, economic partners, and population to participate. However, Germany continues to rely heavily on fossil fuel-based energy sources, an obstacle further heightened by Russia’s war of aggression. The war has not deterred Germany from its climate promises but rather reinvigorated its desire to reduce dependence on Russian gas. Therefore, the state is committed to long-term targets by rapidly building up its renewable energy capacity and in general, embedding its climate targets across all sectors in its economy and society.
Though Germany can’t do it alone. To increase cooperation and policy coordination with the US and Canada, the recent Transatlantic Climate Bridge study tour gave a group of Midwestern legislators an inside look into Germany’s energy transition and how the government and other actors are working towards these goals, their challenges, and opportunities for collaboration between the three countries. In just under a week this past December, the legislators met national and subnational government representatives, private sector frontrunners, municipal climate solution champions, and policy experts to get a holistic view of the Energiewende in action.
The legislators were particularly impressed with the overall collective ambition towards the energy transition voiced by all the actors they met, serving as a microcosm for German societal consensus at large. As seen by the innovative techniques used by companies and willingness by organizations to create climate-friendly solutions, there is a general consensus by the population that we need to move towards net-zero emissions. In Bottrop, legislators visited the local wastewater treatment facility which, through reclaiming biogas through anaerobic digestion, onsite solar panels and a wind turbine, ends up producing more energy than than it consumes. The bottom-up enthusiasm and willingness to participate is a necessary element that eases the implementation of sectoral targets.
The importance of Hydrogen
Transitioning to net-zero for hard-to-abate sectors like steel manufacturing was a significant topic of discussion as the European Union and Germany commit to tackling industrial emissions. To combat high emissions within large industries, Germany has become a major investor in hydrogen. The country kicked off significant support for the technology in 2020 with its National Hydrogen Strategy, which is set to be updated later this year. In a draft of the Hydrogen Strategy 2.0 released by the Economy Ministry, Germany will continue to invest in green hydrogen production (produced using renewable energies) as a key tool in decarbonizing its prized heavy industry.
In Berlin, delegates met with Jörg Buisset, Chairman of H2Berlin, a consortium of energy companies, utilities, and partners across Berlin motivated towards the use of sustainable hydrogen. With government investment and an expanded hydrogen market, hydrogen has the potential to become very affordable to transport and import into Berlin. But investments into hydrogen will not be possible without the backing of the large industrial players. ThyssenKrupp Steel, one of the largest steel manufacturing companies in Germany has taken on the challenge and committed to fully decarbonizing its steel production using green hydrogen. The legislators had the opportunity to take a personalized tour of a Thyssenkrupp plant given by CEO Bernhard Osburg and learned of the companies plan to save 3.5 million metric tons of CO2 by implementing green hydrogen – cutting almost 20% of their current emissions in a first step (equal to 5% of total emissions in the Ruhr region) with more emission cuts to follow shortly after.
The German government, aware of the teething problems, sees the importance of creating lead markets to make both the production of hydrogen and initial off-taking more affordable – which should help to increase its adoption, as explained to the legislators by H2Global Director Kirsten Westphal. However, this can only be accomplished through collaboration with international actors like Canada and the US who have the resources and capacity to set up the infrastructure to produce green hydrogen at scale. As seen in the most recent Hydrogen Alliance between Canada and Germany, there is promising work being done to create frameworks for energy partnerships to establish the hydrogen market.
Regulation and Funding Barriers
Overcoming red tape for green projects is key to progressing the energy transition both in Europe and North America. From harmonizing standards and definitions for low-emission products to simplifying permitting processes for wind turbines, governments must make it easier for their industries to implement exactly the kind of projects they envision will transition their economies towards net zero. The legislators learned about the particular challenges Germany faces in this regard, as climate policy is governed at the subnational, national and European Union levels. The German private sector in particular voiced this concern to participants and cited the simplicity behind the funding mechanisms in e.g., the Inflation Reduction Act in the US as a step in the right direction. To note, the German government has heard these concerns and Economy Minister, Robert Habeck has made his intention to cut red tape clear. Last January, the Economy Ministry released a dossier with its plans to eliminate bureaucratic obstacles for small to medium sized enterprises. However, subnational governments in Germany are also looking to the federal government to ease the complexity of regulatory processes when building energy infrastructure. Delegates met with representatives from the state of North-Rhine-Westphalia who emphasized the obstacle of navigating the various standards set out by the federal government and the European Union. Here too the Government is listening and toiling away, but there is much work to be done to, for example, reach the ambitious wind on land targets that the government has set.
The Transatlantic Climate Bridge study tour gave the legislators and the participants from Germany the opportunity to dialogue on transatlantic issues of energy and climate.
Specifically, the North American legislators were able to get a keen understanding of the approach to energy transition in Germany, with the climate targets being integrated into all facets of society from local utilities to industrial production to transport. Some of the legislators were able to see opportunities for their communities to assist Germany in its goals and vice versa. The representative from Manitoba, Canada, Adrien Sala spoke on the potential for Manitoba to develop and export green hydrogen to Germany. Manitoba currently generates more renewable hydroelectric power than needed, which it sells to other provinces in Canada and to the United States.
The Transatlantic Climate Bridge Study Tour allowed me to identify a number of opportunities for Manitoba to partner with Germany in tackling our respective energy related challenges. Specifically, it helped to highlight the opportunities for Manitoba to develop and potentially export green hydrogen to support Germany’s ability to meet its energy needs and decarbonization targets in the years to come.
Adrien Sala, Member of the Legislative Assembly of Manitoba
On the other hand, the German participants were able to inquire about the specific processes in North America and learn about the various state and provincial idiosyncratic climate and energy landscapes with a broad swath of relatable and informative experiences.
The Canadian and American participants were able to make (business) connections for their states and provinces, and could take back what they learned about Germany’s energy transition to their constituencies and subnational jurisdictions. As one participant noted – seeing is believing, and with that, the TCB hopes to host more study trips across the Atlantic to continue to facilitate climate policy cooperation between Germany, the US, and Canada.