German industry will need to swiftly implement a “massive” reduction in greenhouse-gas emissions to conform with targets in the ruling coalition’s new climate protection law. According to a draft seen by Bloomberg, industry will need to cut annual CO2 emissions to 118 million tons by 2030, from 186 million tons last year, as Germany seeks to achieve carbon neutrality by 2045. The energy sector’s target is even more ambitious, with a requirement to slash emissions to 108 million tons from 280 million tons.

Chancellor Angela Merkel’s government last week pledged to eliminate greenhouse gas emissions by 2045, five years earlier than its previous goal and the shortest timeline among major economies. Her cabinet is due to sign off on the law on Wednesday before it goes to parliament for approval.

The coalition’s hand was forced after Germany’s highest court ruled last month that the existing climate protection law put young people’s futures at risk by leaving most emissions cuts until after 2030.

Germany’s Emissions

Reaching net zero by 2045 will require sharp reductions 2025 onward

Source: Agora Energiewende

The text of the draft law says that since the legislation will provide more climate protection in the short to medium term, it will prevent the burden of cutting greenhouse gas emissions being shifted to future generations. It will also provide “more orientation and planning security” for society and industry.

Getting to net zero by 2045 will be a huge challenge for Europe’s biggest economy, a manufacturing powerhouse that is home to companies like Volkswagen AG and Bayer AG and emits proportionally more carbon than its peers on the continent.

Carbon Intensive

Germany’s economy creates more carbon dioxide emissions than peers

Source: OECD

* Figures reflect CO2 emissions per unit of GDP based on 2019 figures

Germany will have to cut emissions not just from the electricity sector, but also from transport, agriculture and factories making steel and cement that don’t yet have economical clean alternatives. The nation’s exit from coal power by 2038 and its expansion of renewables such as wind and solar energy would have to be accelerated.