Friedrich Merz, the politician likely to become Germany’s next chancellor, has vowed to restore Germany’s industrial competitiveness by putting climate policy on the back burner.
In a campaign speech in the western industrial city of Bochum on Monday, Merz, leader of the CDU, stated that Germany’s economic policies under Chancellor Olaf Scholz had been “almost entirely oriented towards climate protection.” He added, “I want to say this clearly: We will and must change that.”
Germany’s traffic-light coalition government, which collapsed in November over differences of opinion on spending and economic reforms, had pledged to “ideally” phase out coal by 2030, eight years ahead of the official target date. To achieve this goal, the coalition, which included Scholz’s Social Democratic Party (SPD) and the Greens, greatly expanded renewables and subsidized energy-intensive companies to help them achieve climate neutrality.
As a result, Germany is the European Union’s industrial leader in the production of green infrastructure, with the largest number of plants for solar and wind technology. In heat pump production, it has the second-largest number of plants, behind Italy.
However, Merz suggested that he would radically change course. Referring to both coal and nuclear power during his speech, he argued that they had “agreed enough” in recent years on which energy source to phase out, but that decommissioning was out of the question unless there was “something to replace it.”
“If we continue to do so, we would greatly jeopardize Germany as an industrial center, and we are not prepared to do that,” Merz said.
Merz and his conservative alliance CDU-CSU are likely to win the early elections on 23 February, with 31 percent support in the polls. The right-wing Alternative for Germany (AfD) party is in second place with 21 percent support. However, since Merz has closed the door to an alliance with the AfD, he may have to form a coalition with the SPD and the Greens, who oppose his economic policies.
During his visit to Bochum, Merz also expressed skepticism about the previous government’s focus on “green steel”—steel mills powered by hydrogen from renewable energy—and told a panel that he “does not believe that the rapid transition to hydrogen-powered steel mills will be successful.”
ThyssenKrupp, once the national steel giant, received around €2 billion in state subsidies in 2023 to accelerate its shift away from CO2-emitting production by replacing its coal-fired steel furnaces with new hydrogen-fired ones.
In Bochum, Merz proposed carbon capture instead of completely avoiding emissions from steel mills with hydrogen. His main concern with hydrogen from renewable sources is cost. However, experts warn that carbon capture, an electricity-consuming technology, also has a high price tag and is not yet available on the scale needed to decarbonize the steel industry.
Robert Habeck, the Greens’ candidate for prime minister, disagreed with Merz’s comments about hydrogen-powered steel mills. “No one should believe that coal-fired electricity and coal-powered steel still have a chance on the world market,” Habeck told reporters on Tuesday.
SPD leaders also criticized Merz. Anke Rehlinger, premier of the southwestern state of Saarland, where the steel industry is a key sector, told the German daily Stern that anyone who wanted to back down now would destroy billions of euros in investments and tens of thousands of jobs.
