Merkel: we live in times of societal change, especially due to climate change and digitalisation, hence we need a future oriented package. That’s the right framing for the 🇩🇪 stimulus package, let’s see what it actually does...
€130bn package - that’s more than most expected. Strong sign but will make European cohesion & solidarity even more important to avoid imbalances.
Cap for renewable energy surcharge as asked for by @AgoraEW and others and support for municipalities. Let’s see whether there are also investments for low carbon technologies in the mix?
🚨 €50bn future package for climate protection and digitalisation. More R&I support, support for EVs and charging, programme for purchase of utility vehicles (but not all combustion engine vehicles?)...
...agreement on the contents of the hydrogen strategy - especially important if there’s investments into hydrogen as part of the future package! cc @number_fortytwo
Finance Minister Scholz (SPD) praising package size, “can do a lot with this”, but will need to take up more debts in the future. His three priorities: benefits for families, support for municipalities, stimulating demand.
“Focusing on one sector isn’t the right path”, need to stimulate demand in all sectors, says Scholz, hence the lower VAT. A subtle reference to the car companies’ calls for state support?
Won’t mobilize all investments necessary for the future in next two years but it’s important that transformation is part of the package, says Scholz. Namechecks EVs, hydrogen...
Side note: I do like Scholz’s tendency to use casual language, after mobilizing the “bazooka” initially he now wants to get out of the crisis with “wums” (hard to translate...)
CSU leader Söder says €130bn package is reasonable - significant given that his party had called for an upper cap on stimulus funding. Now talking about psychology and VAT reductions as a carrier of optimism...
🚨 Here’s the conservative framing on automotive support: VAT reduction applies for all cars regardless of their engine, that’s why there’s no need to support purchases. But an innovation fund to support EVs and hybrid cars as well - details will be interesting...
“Quantum Computing, artificial intelligence, hydrogen” named as key innovation areas where technological leap is needed by Söder. Working on energy (#hydrogen) has never felt as fancy...
Now social democrat leader talking about need for VAT reduction to reach customers. Too soon to draw conclusions about what this means for climate but €50bn future fund is promising, and good that there’s no purchasing support for cars. Research support for hybrid cars...
...isn’t great but it could’ve been worse. (But again, will need to read details before anything can be properly assessed.)
Now head of CDU parliamentary group Brinkhaus up, praising involvement of parliamentary groups in the process (he’s previously complained about parliament being sidelined in the crisis). Praises that the package “shapes the future of our country”...
...on digitalisation and “especially” climate. Mentions the hydrogen strategy again - it’s a big topic tonight, will share some thoughts on that later. Also mentions “economic foreign policy hydrogen strategy”, I wonder what that is?
Questions from journalists mostly about party politics - this one is interesting: why is Conservative party suddenly happy with so much (and it really is a lot) spending? Parliamentary leader says it’s because they greatly enjoy spending for the future, on climate et al...
...admittedly this is somewhat surprising, but clearly very welcome and the right path to choose.
A thought: it’s interesting how few mentions there’ve been re renewables (except lowering of the surcharge). Wind/solar don’t need a lot of direct financial support anymore but the wider energy transition (grids, balancing, etc) does, and its success is needed for...
...the success of hydrogen and EVs, i.e. the green technologies that are being praised tonight. Regulatory barriers for renewables were removed a few weeks ago in a surprising turn but am looking forward to hearing more about accelerated energy transition on demand side...
...can work and what supply side conditions are needed for that to work. (I missed a “how” in the previous tweet!)
Back to the press conference: all questions asked are important but it’d be nice to hear a few more questions and answers on the climate aspects of the package and its alignment with long term (climate) targets.
Journalist challenges whether VAT reduction, EV support threatens German car industry - good response from Merkel stressing that German car industry is integrated into EU market so that there’s no such thing as a “foreign” car company. cc @FactFisching @QuentinGenard @RebekkaPopp
Let's have a look at the paper that all the excitement is about - with climate glasses on. 🤓
Three pillars:
(1) Stimulus and crisis response package
(2) *future package* to strengthen Germany's role as "exporter for high end technologies" through investments in digital & climate technologies
(3) International responsibility
(1) Stimulus and crisis response package
(2) *future package* to strengthen Germany's role as "exporter for high end technologies" through investments in digital & climate technologies
(3) International responsibility
Major item in pillar #1 is the lower VAT, but let's look at something more directly related to climate first: the EEG surcharge for renewables will be subsidised through the federal budget and hence capped at €6.5ct/kWh in 2021 and €6.0ct/kWh in 2022.
Aim of this is to enable transition to electrification & hydrogen solutions. Worth saying at this point that lower energy price indeed helps for that, but it also needs sufficient amounts of renewable energy capacity that can supply electrified processes and electrolysers.
Procurement law is to be simplified on a temporary basis - interesting is the second bit here: Germany will use EU Presidency for a debureaucratisation programme and to reform competition law. Potentially a risk for climate and environmental guidelines? cc @JohannaLehne
This isn't a major investment but still interesting because it illustrates the significance of climate impacts already today: reference to "two drought years" and the threat this poses to German forests, Government is providing €700m for sustainable forestry.
This is good (and a topic that hasn't received as much attention as it deserves previously in terms of economic stabilization in my opinion): financial support (€2.5bn + x) for public transport providers that are obviously badly hit by social distancing requirements.
Now it gets, from a climate perspective, really interesting: we've arrived at the "future package" (better translation tba). It starts off with various support measures for research programmes (cc @Lea_Pilsner)
The car industry has been one of the most vocal voices in advance of today - but as many are observing, the fact that there isn't an as unlimited purchase support for new cars that the industry association has demanded is a significant political shift (and win for the SPD)...
...but what is the automotive sector getting instead? This:
- tax linked more strongly to emissions
- premium for EV purchases doubled
- €2bn funds for transformation of car companies and especially suppliers (!)
- €2.5bn investments in EV infrastructure and battery production
- tax linked more strongly to emissions
- premium for EV purchases doubled
- €2bn funds for transformation of car companies and especially suppliers (!)
- €2.5bn investments in EV infrastructure and battery production
This thread continues here (linking Twitter threads, one of the underestimated challenges of simultaneously reading a new policy document and tweeting about it at nearly midnight):
