In Germany, there’s going to be a lot less energy soon. And less can mean more, according to new government guidelines that spell out how industries can better use the energy that they need to meet ambitious carbon reduction targets.
The proposals and incentives presented today are set by the economics and environment ministries and target the energy, transport, construction and agricultural sectors.
In all, the government aims to cut carbon emissions by 40 percent by 2020, compared to 1990 levels, in line with the targets set this summer by the European Union.
If no changes are made and people keep consuming energy at the current rate, it will only manage to achieve a reduction of 32 to 35 percent.
Next week the government will present measures to help hit E.U. targets to representatives from the federal states.
The guidelines are set by the economics and environment ministries and include incentives for increasing the energy efficiency of buildings through renovation, for example. The economics ministry made an extra €4 to €6 billion, or $4.9 to $7.4 billion, available to support the measure.
The government hopes the money will also trigger private sector investments of up to €40 billion. “We want to set the strongest incentive possible for private investment,” said Sigmar Gabriel, economics minister.
One of the main measures planned is a tax incentive for the modern insulation of buildings. People who renovate their homes to reduce their heating and energy consumption will be able to write off 10 percent of the costs over ten years, according to sources close to the government. The incentive would extend for five years and is planned for 2015.
The German government had tried to pass this legislation before, but federal states blocked the move, complaining that the central govenrment was not paying enough to properly fund the incentive program. This time Chancellor Angela Merkel and Mr. Gabriel hope to persuade the states’ minister presidents to support the plan with a sweetener in the form of a €200 million boost regional modernization programs, run by the state owned development bank KFW which is owned by the German government.
The government is also calling on electricity providers to reduce the amount of carbon emissions during the production of coal-fired power. The target is to cut 22 million tons of CO2 between 2016 and 2020 in this area.
A reform of emissions trading is also planned ahead of 2020. The government will also extend renewable energy production and continue to develop combined heat and power production, or cogeneration.