(birds chirping)
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- The BDI is the Federation of German Industries.
From cars to the chemical industry and manufacturers,
we represent about 100,000 companies
with about 8 million employees,
and represent around a quarter of the German GDP.
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We decided to tackle climate change because first of all,
it's one of the major challenges humanity is facing.
But there is another case, so we think that German industry
has always been strong on complex technology systems,
and we think that we can provide a lot of solutions
for a world which has to switch to climate neutrality.
(cheerful music)
We chose BCG as a partner because there was ample experience
and cooperation with BCG.
BCG is a real global player,
and has been focusing on this issue, clearly visibly.
- In our study we focused on one key question,
how can Germany achieve its ambitious new climate targets
that it just adopted in 2021?
Germany wants to halve emissions by 2030
and achieve net zero by 2045.
Currently, we are not on track to achieving this.
What we wanted to find out is, what would a program need
to look like that achieves these targets?
Which technological levers would need
to be implemented, by when,
and how can we ensure a fair transition?
- We chose a very collaborative approach.
We worked together with representatives
of the entire German economy,
and as you can imagine, they had,
at the start of the project, very diverse opinions of
what Germany needs to do to get to net zero.
We had 40 day-long workshops.
We had hundreds of bilateral alignments.
We had drafts of our report
that were commented on by hundreds of people.
And after half a year, we converged together with them
on one consistent set of policy instruments
to get to net zero.
- [Elisabeth] Germany is facing its biggest transition
since the Second World War.
And in order to achieve our ambitious climate targets,
we need to take a lot of decisions very differently
than we have been taking them in the past.
We need to stop investments
in fossil assets wherever possible, now.
We need to build up a new national hydrogen infrastructure.
We need to shut down a third of our blast furnaces
and rebuild them using green technologies.
We need to double the speed of our building renovation.
Already by 2030, essentially all newly sold cars need to be electric.
And of course, very importantly,
we need to massively increase our renewables capacities.
We need to build more renewable grids than ever,
and we need to build more thermal capacities
than have ever been built in Germany before.
We need to invest around 860 billion euros by 2030 alone.
- It's a huge amount of money that needs to be allocated,
but Germany has mastered such challenges before.
The real challenge is to make this all happen.
To coordinate the infrastructure build out
with the regulations, that's I think the much larger
challenge that we face compared to the financial challenge.
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- [Elisabeth] Germany has the fourth largest
economy in the world.
And while we are currently still a net importer
of fossil fuels, we are at the same time an exporter
of technologies and industrial assets.
If Germany manages the transition to a net-zero economy
while remaining competitive globally,
I believe we could serve as a blueprint
for many more other countries in the world.
- I'm very optimistic about the future of this work.
We have with this study, an approach,
which is absolutely fact-based, realistic,
to keep our economies intact,
and to reach those common goals of climate protection.
(pleasant music)