The German Chamber of Commerce: Energy Transition Threatens the Industrial Base of Germany

The German Foreign Trade Association said that Germany's exports to China and the United States, its two most important markets, will still be difficult to recover to pre-pandemic levels in 2026. The business community has called on the government to change its current energy transition policy.

Peter Adrian, chairman of the German Chamber of Commerce (DIHK), called on the government to shift its climate and energy policies. He told Deutsche Presse-Agentur, "We have now realized that if not corrected, the current path will destroy important parts of German industry."

He pointed out that Germany may face the danger of deindustrialization, with extremely absurd consequences. "At that time, some products that we could originally produce in an efficient and climate-friendly way would have to be purchased from countries with inefficient and higher carbon emissions."

Adrian said that Germany needs a different approach to climate protection and energy policy. "Germany can no longer arrogantly guide the world. We must do better by cooperating with other countries."

He emphasized that the German Chamber of Commerce does not criticize the goal of achieving carbon neutrality, but rather "the path to achieving this goal and the high costs associated with the transition, especially in the energy sector."

Germany Will Not Achieve Its Climate Goals "Leads Far Ahead"

A study commissioned by the German Chamber of Commerce concluded that if the energy transition continues at the current pace, the costs will be too high for businesses to bear. Factors driving up costs include large investments required for expanding the grid, upgrading industrial processes, and building new power plants. In addition, Germany's energy costs are also high compared to other countries.

Adrian said that India plans to achieve carbon neutrality by 2070, China by 2060, the EU by 2050, while Germany aims for 2045, despite the fact that Germany's carbon dioxide emissions account for only 1.5% of the global total. He believes that to get close to the temperature control goals set by the Paris Climate Agreement, it is necessary to "coordinate with major economies."

He pointed out that compared to 1990, Germany's carbon dioxide emissions have decreased by 48%, while emissions in many other industrialized countries are still increasing. "Only through an international coordination mechanism can we achieve climate goals."

Manufacturing and Exports Remain Weak

The German Industry Association (BDI) also warned earlier this month that the German economy is facing the "worst crisis since World War II." After two years of recession, the German economy will barely achieve a slight growth in 2025. However, according to BDI data, Germany's industrial output will decline by 2% in 2025, marking the fourth consecutive year of decline.

Industry organizations expect that Germany's export trade will also remain weak in the new year. Dirk Jandura, chairman of the German Association of Wholesale, Foreign Trade and Services (BGA), told Reuters on Friday, "Until 2026, we expect the export momentum in our two most important markets - the United States and China - will not return to previous levels." A more realistic situation is that the weakness will continue, or at best stabilize at a low level.

The German Federal Agency for Trade and Investment (GTAI) predicts that Germany's exports to the United States will fall by more than 7% in 2025, slightly below 150 billion euros. Germany's exports to China will fall by 10%, to 81 billion euros.

Since 2025, the U.S. has imposed tariffs on goods from the EU, which has hit demand for German products hard. Additionally, the strong euro, as well as Germany's structural competitive disadvantages, such as high energy prices, cumbersome bureaucracy, and weak investment momentum, have exacerbated this dilemma. Jandura warned, "Germany is further losing export market share."

As for the situation in the Chinese market, the German Foreign Trade Association considers it more complex. "China's industrial policy has always focused on import substitution and developing domestic leading enterprises," Jandura said. Therefore, the market share of key industries such as German automobiles, mechanical engineering, and chemicals is being eroded by Chinese competitors. Many German companies are responding to this situation by increasing local production in China or investing in other Asian countries. "This usually stabilizes global sales, but leads to a decline in German exports."

Source: DW

Original: toutiao.com/article/1853257508489291/

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