Coronavirus: German industrial giants push for green stimulus

Pandemic prompts calls to link economic recovery with climate action

A steel worker stands amid sparks of raw iron coming from a blast furnace at a ThyssenKrupp steel factory in Duisburg, western Germany. Reuters

A group of Germany’s biggest companies on Monday called for state aid to alleviate the economic impact of the coronavirus pandemic to be tied to action on climate change.

More than 60 companies including ThyssenKrupp, Bayer, Allianz and Deutsche Telekom signed a letter pushing German Chancellor Angela Merkel to pursue an ambitious post-crisis policy focussed on cutting emissions.

"We appeal to the federal government to closely link economic policy measures to overcome both the climate crisis and the coronavirus crisis," the companies said ahead of the annual Petersberg climate dialogue which began on Monday.

The leaders of 30 nations convened for the annual conference, held online this year due to the pandemic, with the aim of keeping up commitment to the Paris Climate agreement.

Under the landmark 2015 accord, 189 nations committed to working to stop global temperatures from rising beyond 2 degrees Celsius above pre-industrial levels.

But some of the giants of German industry are concerned that environmental issues will be neglected due to the almost unprecedented economic damaged caused by the virus.

Car manufacturers are already lobbying to prevent the announced tightening of emissions limits on cars,

Airlines, which have been devastated by the pandemic, are also asking for a waiver on jet fuel taxes, and the plastics industry is appealing bans on some products put in place after 2015.

"The pandemic highlights the vulnerability of our globalised economic system to threats that are not limited to regions or industries," the appeal read. "Climate change is a comparable challenge."

The head of ThyssenKrupp's steel unit, Bernhard Osburg, called for a climate economic stimulus programme, while Joerg Fuhrmann, chief executive at Salzgitter, said the state should encourage the replacement of coal with hydrogen in steelmaking.

Markus Steilemann, head of plastics maker Covestro said: "It is about making our economy more crisis-resistant and competitive with a view to a truly sustainable, climate-neutral future."

The German BDI industry association said it was sticking to the European goal of climate neutrality, or net zero greenhouse gas emissions, in 2050, but warned that governments, companies and households will in future have reduced scope for investments.

"The EU's Green Deal must therefore become a Smart Deal, in which growth, employment and ambitious climate protection targets are linked as efficiently as possible via an intelligent investment and relief package," said BDI deputy managing director Holger Loesch.

Germany’s environment minister Svenja Schulze on Monday signalled that green stimulus was not yet a priority as the country is still struggling to overcome the coronavirus crisis.

“Right now we’ve a real crisis and in a first step we must help companies survive,” Ms Schulze said, noting, however, that climate-protection discussions were beginning.

Chancellor Merkel’s cabinet has pledged more than 1 trillion euros (Dh3.98 trillion) to stem economic collapse from the pandemic. But it has shown reluctance to commit to fresh finance on longer-term public programs before the crisis subsides.

The German economy is poised to shrink the most since Second World War as a result of the pandemic.