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Germany's offshore wind, hydrogen, and electric vehicles (EVs)
technology has a role to play in advancing the US towards its
net-zero target.
US Special Presidential Envoy for Climate John Kerry signed the
joint declaration of intent on
a German-American climate and energy partnership in Berlin during
the G7 Climate, Energy, and Environment Ministers meetings on 27
May.
Building on a July US-German climate and energy partnership, the new
declaration details which technologies will be chosen for
technology transfer between the two countries.
Since then, the countries have set up working groups on offshore
wind, hydrogen, and zero-emissions vehicles, three technologies
that the US Ambassador to Germany Amy Gutmann called "really
important" for preventing climate change at the press conference
that hosted the signing.
The declaration will help Germany and the US reach their
respective deadlines for net-zero by 2045 and 2050. Kerry hoped
they could serve as examples for other countries.
Gutmann praised Germany's "remarkable steps [taken] to diversify
energy sources away from Russia," indicating its pledge to reach
nearly 100% renewable power under the Easter Package of
policies.
"Our two counties have held multiple discussions on how the US
can help Germany achieve its energy security goals," she said.
Kerry acknowledged Germany's leadership in renewable energy.
"The fact is that Germany was a first mover. It was a nation that
took a significant chance on investment in renewable energy way
before it was fashionable, or even before it was economic," said
Kerry at the press conference.
"Germany as a result has been a huge contributor to the global
capacity for wind and solar and is making a huge difference today,"
Kerry added.
"What Germany and the US have both shown is that, if you're a
country that is a first mover and that invests now … there are
enormous economic, social, and security benefits, and we are
anxious to grow this by working in this partnership," said
Kerry.
Offshore wind technology transfer
As part of the declaration, a German-American climate and energy
partnership could transfer some of Germany's world-leading offshore
wind technology to US interests.
In June, a US delegation was invited to Germany to visit a wind
farm near Helgoland.
Germany commissioned its first offshore wind farm, 60 MW Alpha
Ventus, in 2010, while the first US project, 30 MW Block Island,
didn't start until 2016.
Germany has the third-most offshore wind capacity of any country
after the UK and China, according to the Global Wind
Energy Council.
In offshore wind, the countries also plan to produce a joint
paper on tackling sector "bottlenecks."
Trade group WindEurope has criticized permitting problems
in the EU. It also warned European wind turbine manufacturers were
struggling with high prices for steel and other commodities.
Germany has also announced plans to follow the
Netherlands by offering subsidies for renewable hydrogen production
using a mechanism known as carbon contracts for a difference.
Certifications that define what hydrogen production can be
considered renewable is a crucial step for enacting hydrogen
subsidy schemes.
The executive arm proposed raising the bloc-wide target for
renewable hydrogen production and pledged subsides under the March
REPowerEU policy package.
Electric, zero-emission vehicles
The pair of countries will continue with their working group on
zero-emission vehicles, which includes both all-electric and
all-hydrogen-fuel-cell varieties.
Germany also offers some of the highest EV subsidies in Europe,
the report found.
But in the US, S&P Global expects sales and registrations of
EVs to be limited by 2022 and likely into 2023 due to both constrained production and
availability.
Investing in net-zero globally
Central and Eastern Europe and Southeast Asia, which the White
House called a "growing emitter," were the regions the US had
singled out for clean energy investment in July's climate
pledge.
The US and Germany also sought to boost the energy security of
Ukraine in the pledge, made months before Russia's invasion.
Countries that invest in energy transition will enjoy an
economic boost while avoiding long-term costs, said Kerry at the
press conference.
As part of the declaration, Germany and the US will keep working
together on existing projects to fund net-zero tech in emerging
economies.
The pair will continue to support the existing First Movers Coalition, a group
of companies including Microsoft and Boeing committed to green
procurement, established at COP26 climate conference last
November.
Another effort is the Net-Zero World Initiative, a net-zero
investment project led by the US Department of Energy and American
philanthropists, targeting decarbonization in places like
Argentina, Chile, Egypt, Indonesia, Nigeria, and Ukraine.
Separately, G7 member UK released a statement calling on countries
to fulfill their pledges in the COP26's Glasgow Climate Pact, which
called for more climate finance for developing countries.
Since the start of the year, German Chancellor Olaf Scholz has
used Germany's G7 presidency to urge for the creation of a "Climate
Club," an international bloc that would impose costs on countries
failing to do their share to reach global net-zero.
Posted 27 May 2022 by Cristina Brooks, Senior Journalist, Climate and Sustainability
This article was published by S&P Global Commodity Insights and not by S&P Global Ratings, which is a separately managed division of S&P Global.
