From Coal to Innovation: Germany’s €40 Billion Investment in Ex-Mining Regions
It´s only logical that any serious agenda for fulfilling the Paris Climate Agreement will entail new jobs and new value chains in many regions and economic sectors. In Germany, phasing out coal is part of this agenda. The federal German government has specified that the phase-out must open up new opportunities for the people and the economies of coal-producing regions.
By Flérida Regueira Cortizo, Germany Trade & Invest
© Pixabay/Peter H
Consensus at its best
In late August 2019, the German government approved draft legislation earmarking €40 billion for stimulus, innovation and infrastructure to help affected regions deal Germany’s phase-out of coal mining. The German parliament, the Bundestag, is expected to pass the law by the end of the year. The measures are based on a broad consensus regarding a coal-exit strategy emerging from a commission of industry, government and civil society representatives established in 2018. The aim of the federal government together with the states of Brandenburg, Saxony, Sachsen-Anhalt and North Rhine-Westphalia, which all have impacted regions, is to develop coal-producing parts of Germany into regions of innovation. This requires structural change, in which environmental and construction technologies will play a central role.
Political, legal and financial frameworks pave the way
Companies interested in setting up businesses in one of the impacted regions will not only benefit from a forward-thinking legal and political framework, but will also be potentially eligible for financial assistance as well. Of the 40 billion euros earmarked for the coal phase-out, 14 billion will go to major regional investments and 26 billion to concrete projects.
Several project proposals are currently being considered. The federal government has said that wherever possible, it will accelerate the implementation of the priority projects and simplify the necessary planning processes. German Economic Affairs and Energy Minister Peter Altmaier stated: “Structural change is a major opportunity for the coal regions concerned.”
Federal and regional projects – some insights of the key points
A number of research and development projects have been already prioritized, including a competence center for climate protection in energy-intensive industries and a research and demonstration facility for innovative water and wastewater technology at a sewage treatment plant. In addition, the government has fast-tracked infrastructure projects including the construction, extension, modernization and upgrading of railways, motorways and federal roads in all four affected states. These infrastructure measures will not only trigger a considerable volume of investments, but they will definitely stimulate the use of modern technologies such as Building Information Modeling (BIM). The German Ministry of Transport and Digital Infrastructure (BMVI) has developed a “Road Map for Digital Design and Construction” to promote the development and utilization of BIM as a standard planning tool for all federal infrastructure projects as of next year.
The individual states also have ideas of their own regarding projects. Lusatia (Lausitz), which spans parts of both Saxony and Brandenburg, aims to become a model for successful structural change. Its central location and ability to bridge the cities of Dresden, Leipzig, Berlin, Wrocław, Poznań and Prague give it a unique selling point. In addition, Lusatia wants to establish itself as a location for future-oriented production processes and recycling technologies among other things.
With its modern glass industry, the Central German region within Saxony and Sachsen-Anhalt has a promising future. In order to strengthen this industry further, the creation of the Glascampus Torgau Professional School, which specializes in the glass, ceramics and building materials industry, should be supported. Furthermore, in Schkopau, a tire-recycling center for sustainable rubber and rubber technology is to be highlighted. These are just two in a long list of projects.
The Rhineland region, near Germany’s borders with Belgium and the Netherlands aims to become a model for energy supply and resource security with a focus on developing sustainable industrial value chains further. To that end, the region plans to host a major international construction and technology expo to showcase possible measures.
Turning strategy into opportunity
A lot of change is necessary to transition from coal production to innovation. So it’s worth companies’ while to find out about the different business opportunities available in the impacted regions. Enterprises planning to set up shop in the German market can take advantage of a wide range of financing and incentives. Direct grants and other funding instruments such as public loans and guarantees, as well as equity capital, can significantly reduce investment costs. Visit www.gtai.de/incentives for extensive information about the incentives and funding available.
In any case, fulfilling the Paris Climate Agreement will open a spectrum of opportunities for innovative companies.
Germany’s economic development agency Germany Trade & Invest (GTAI) offers free support services for companies planning to expand to this promising market. GTAI’s industry experts Flérida Regueira Cortizo (firstname.lastname@example.org) and Anne Bräutigam (email@example.com) are happy to discuss how you can grow your sustainable business in Germany. Just e-mail them to arrange a call.