German federal states and utilities are urging state energy ministers in a position paper to expand Germany's power grid and renewable energies as part of an economic stimulus package. The aim is to speed up investments in hybrid power sources, energy storage and hydrogen – much of which would have become necessary anyway over the course of the next decade anyway.
Delay national CO2 price on transport?
Several states want to put climate policy on the back burner, arguing that projects like the Green Deal would pose additional obstacles to economic recovery. Likewise, industry associations have said tighter environmental standards could hinder their ability to react to the coronavirus crisis, calling for some stringent rules to be relaxed.
The pro-business party FDP questioned the introduction of a national price on carbon emissions in heating and transport, and some conservatives call for suspending the aviation tax planned in Germany's Climate Action Programme for at least one year.
Merkel remains firm on climate targets
German Chancellor Angela Merkel, in contrast, remains committed to climate action. She stressed “this issue has not gone away during the pandemic.” Finance minister Olaf Scholz said a stimulus package oriented toward international climate targets and Germany’s goal of becoming carbon neutral by 2050 would "make sense," as soon as the most pressing phase of the pandemic has ended.
Proposals include clean energy tax credits, requirements that bailed-out industries like airlines commit to emissions cuts, and investments in green infrastructure. This approach could both ensure that climate action is not neglected during the crisis, and help Germany stay competitive in energy transition technologies, a sector that could be worth about 23 trillion dollars by 2030, according to the World Bank.