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Industrial policy in changed times

The Federal Government’s Industrial Strategy sketches out the future of our industry in times of great geopolitical changes and on the path to climate neutrality. The Strategy was discussed in detail at the Industry Conference at the end of October 2023.

“German industry and industry in the EU as a whole are continuing to face great challenges.” With this message, the moderator set the scene for the Industry Conference at the end of October 2023. Leading representatives of the Alliance for the ‘Future of Industry’, business associations and trade unions, as well as policy-makers from Germany, Europe and around the world, discussed the draft of a new industrial strategy.

In order to address these challenges, the Federal Ministry for Economic Affairs and Climate Action prepared the ground for the conference with a 60-page strategy paper entitled: “Industrial policy in changed times: safeguarding our industrial base, renewing our prosperity, boosting our economic security”.

Industry is part of the country’s DNA

Federal Minister Robert Habeck said: “We want to maintain Germany as a strong industrial centre in all its diversity. From the global corporation to the hidden Mittelstand champion and the small enterprise. From the energy-intensive basic materials industry to mechanical and automotive engineering, to space technology. If we wish to continue to be an economically successful country in future, we must build on our biggest strength: our industry and thus our ability to develop and manufacture first-class products.” You can find the minister’s 45-minute press statement (in German) here.

Transition of our industry climate neutrality

One central focus of the paper is the transition of industry to climate neutrality, which will offer a host of opportunities in the medium to long term, but which also entails great efforts and costs for our industrial sector and its employees. Germany has driven and implemented a clear framework at European level in the form of the revised and expanded emissions trading system and the new carbon border adjustment mechanism. At national level, it is supplemented by the comprehensive measures to decarbonise industry contained in the Climate Action Programme 2030, with carbon contracts for difference being a key instrument.

We also aim to keep developing new technologies for the transition of industry to climate neutrality. In order to attain our climate neutrality goals, the strategy also highlights the need for CCU/S (carbon dioxide capture and utilisation / storage). Hard-to-abate carbon emissions in sectors which have no or hardly any technological possibilities to reduce emissions are to be used by industry or stored securely and permanently in deep-lying geological rock formations.

The Industrial Strategy can be found here (PDF, 6 MB), and a summary here (PDF, 427 KB).