Climate strategy
A sustainable and climate-friendly formation of export financing.
The Federal Government as partner for the transformation
The Federal Government actively supports the internationally agreed goal of capping the global anthropogenic rise in temperatures at 1.5 degrees Celsius. This calls for a comprehensive decarbonisation of the global economy. As a central pillar of the German economy, the German export industry is already making use of this transformation as an opportunity and thus making an important contribution to achieving climate protection. Decarbonisation and the swifter development of renewable energies pose major challenges. They call for significant investments and, thus, an efficient capital market capable of providing the necessary finance. Transformation requires technological innovations, new business models and a regulatory framework. With its climate strategy for the guarantee instruments of foreign trade promotion, the German government is bringing them into line with the 1.5-degree path.
Phasing out fossil fuel sectors and facilitating climate-friendly exports and investments
With the introduction of the climate strategy, two immediate measures for Hermes cover and investment guarantees will take effect: Exports and investments in climate-friendly projects will benefit from immediate cover relief, i.e. the conditions for securing exports or investments in climate-friendly technologies will be improved. This mobilizes private capital for the transformation and strengthens German exporters and investors in the international competition for green technologies. On the other hand, business and projects that are not compatible with a 1.5 degree path will be excluded from support.
Additional incentives for climate-neutral foreign trade
The aim of the climate strategy is to stimulate innovation and climate-friendly technologies, support development and promote exports and investments in green technologies. Green and innovative exports and investments in renewable technologies can be covered on much more attractive terms in the future. This will strengthen the competitiveness of German industry in the long term, as the necessary decarbonization of the economy will lead to higher demand for these technologies worldwide.
Strategic support for foreign projects
The German foreign trade promotion instruments have proven their worth. However, competitors from third countries are increasingly competing with political support and comprehensive financing offers, particularly in tenders for large-volume foreign projects. This creates competitive disadvantages for German providers.
The key points of the Federal Government's strategy paper provide new impetus for international competition for major strategic projects in order to improve opportunities for Germany.
Habeck: "We are strengthening the resilience and competitiveness of the German economy in climate-friendly technologies"
Climate assessment based on sector guidelines
Climate policy guidelines for foreign trade promotion have been developed for three key sectors. In the future, the sector guidelines will apply to the three sectors of energy (climate-friendly energy as well as fossil fuel extraction, processing, transport, storage and power generation), industry (chemicals and metals) and transport with civil aviation and shipping as well as passenger cars and light commercial vehicles.
These guidelines are used to decide which future technologies are eligible for cover relief and which other technologies are affected by exclusion. In all other sectors, a climate assessment will be conducted in the future as part of the USM assessment.
Net zero - the long-term goal in the promotion of foreign trade
In line with the Paris Climate Agreement, the greenhouse gas footprint of instruments is to be reduced to net zero by 2045 in advanced economies and by 2050 in developing and emerging economies. Progress toward this goal is measured by what is known as the greenhouse gas footprint. The footprint captures the emissions associated with the use of the covered supplies and services in the target countries.
Climate UFK closes supply gap
With the introduction of a "climate UFK" (untied financial loans), the German government will in future be able to support the financing of transformation projects abroad to supply the German economy with climate-friendly intermediate products. The UFK guarantee instrument, which has so far focused on raw materials, is thus being expanded. The scope of application is broad and can include projects in the fields of energy generation, infrastructure and storage. The climate UFK is a substantial lever for mobilizing private capital and represents a decisive contribution to the development of new markets and technologies.
The climate strategy for all
promotion instruments at a glance
The climate strategy for export credit guarantees
With its climate strategy for Export Credit Guarantees, the Federal Government is improving the cover available for climate-friendly projects. By the same token, cover for projects that are not in line with the 1.5°C pathway will be restricted. This not only supports the decarbonisation of the German export industry but also the transformation of the target countries. Climate categories will determine the transactions that are excluded as well as those for which improved cover is available.
Security of supply through the climate UFK
For the transformation toward climate neutrality to succeed in Germany, the supply of intermediate products and raw materials for low-emission technologies must be guaranteed. German companies are facing massive investments to secure the procurement of these supplies from abroad and need appropriate support. The Climate-UFK creates suitable incentives for their participation.
The climate strategy for the investment guarantees
Investment guarantees offer German companies protection against political risks in direct investments in developing and emerging countries.
With the climate strategy for investment guarantees, the German government actively supports German investors in managing the transformation toward a climate-neutral and competitive economy. Green and innovative investments can be covered on much more attractive terms in the future.
