Seizing The Initiative To Create Better Cleantech Policies In Germany
With their disruptive ideas and unconventional approaches, startups and young companies can make a decisive contribution to turning around the energy, mobility, and resource (recycling) sector, as well as ecological modernization worldwide. However, they are often hampered by regulatory hurdles that can provide protection for conventional business models and technologies for many decades.
The Eco Innovation Alliance is not an association, but an international platform to improve the direct exchange between politics, investors and market participants in order to:
- Eliminate these hurdles and making room for innovative solutions and fair competition
- Give the investor community confidence in investing in the cleantech space
- Provide startups with more visibility in the market to enable them to better and more effectively enter the market
Broadly, the Eco Innovation Alliance supports policy measures and legislative measures that encourage and facilitate deep decarbonization across global economies. In the present German Coalition Agreement negotiations, it is advocating for a range of positions including:
- Sunset schedule for the internal combustion engine for transportation and heating
- Tax incentives and favorable depreciation schedule energy efficiency renovations and distribution generation and storage investments
- Reduction in subsidies for sectors that are contrary to pursuing Germany’s climate goals
- Favorable conditions for investors into early-stage cleantech companies
With change comes opportunity. This is true of a range of innovative industries, market opportunities, and companies that have arisen as a result of our efforts to decarbonize the economy. And it is equally true of the political realm in Germany at present — as the so-called Jamaica Coalition currently taking shape of conservatives, free market boosters and greens attempt to thrash out a coalition agreement.
Given the importance of these negotiations and the opportunity to advance policy settings and an agenda that facilitates cleantech innovation and businesses, the Eco Innovation Alliance was formed in late October. Already 60 young cleantech companies such as sonnen, Thermondo, Mobisol, Ubitricity, tado, Sunfire, sono motors and other supporters like ClimateKic, Start Up Energy Transition, The Beam, and CleanTechnica have joined the Alliance, which is advancing a suite of policy initiatives that will deliver opportunities along with profound greenhouse gas reductions right across the economy.
Eco Innovation Alliance members come from a range of fast-growing and highly innovative companies right across the cleantech spectrum. Some are focused on the German or DACH markets, while others are engaging in developing economies, and there are a small number of global players.
The coalition negotiations between the conservative CDU/CSU parties, the free market FDP and the Greens are developing. However, climate and energy policy remains a major sticking point and a highly contentious issue among the negotiating teams.
The timeline towards resolving these issues is also tight, requiring an urgency to the Eco Innovation Alliance efforts. The new government, formed by the Jamaica Coalition partners, is set for December 21. The coalition agreement itself must be signed off on both by the negotiating teams of the respective parties, but also of their memberships — through party congresses, which are scheduled to occur through mid-and-late November.
Shutting coal-fired power plants remains a central bone of contention within the raft of issues relating the climate change and energy provisions. As it currently stands, the Greens advocate the retiring of 8-10 GW of coal generation by 2020, while the conservative parties want 6 GW and the FDP a measly 3 GW. Further, setting a sunset for the use of the internal combustion engine — both for heating and transportation — as advanced by the Greens is facing strong opposition from its Coalition partners. A compromise solution along the lines of more ambitious emission standards for passenger cars is shaping as a likely outcome.
This top-level policy will no doubt remain contentious, and the Eco Innovation Alliance is advancing the argument for an ambitious schedule of coal generator retirement. However, there are a number of other policy fronts that are of high relevance for Eco Innovation Alliance members and their business outlooks.
Headway has been made for the provision of tax incentives for energy efficient renovation of buildings, as a part of the common taxation policy negotiations. This includes improvements in depreciation schedules for investments that deliver efficiencies, or C02-free generation sources. The winding up or reduction of subsidies for industries or sectors that run counter to Germany’s climate goals is also an area in which progress has been made.
Tax settings to incentivize investments into startup companies is an agenda item that would be of value to Eco Innovation Alliance members, and is being actively advanced. Not only would it benefit the Alliance, but also it would be extremely valuable in unlocking the significant potential of cleantech innovation across a number of economic segments. This is an issue that has been made clear to and advanced by coalition negotiators.
This relatively broad spectrum of policy issues touches on something bigger underpinning the efforts of the Eco Innovation Alliance. It is something that also speaks to the life of the Alliance beyond the coalition negotiations. As decarbonization is a continuous process, so too are the endeavors to which the 60-plus Alliance members can involve themselves in beyond the swearing in of the new German government in December.
There are shared interests among the Eco Innovation Alliance members, and also a shared purpose and experience. Beyond December, the Alliance will form into an international platform in which these experiences and business learnings can be shared. This platform, taking the shape of a website, schedule of roundtable events, seminars and information sharing sessions, cleantech innovators across different segments and with various business activities can come together, collaborate and build the momentum needed to meet the enormous challenge that is economy-wide decarbonization.
Climate change is a global problem and energy economies are frequently international. As such, while Germany is the launching point for the Eco Innovation Alliance, the ambition of the organization is to become international in scale and global in ambition.
As contentious as energy and climate policy is to the coalition parties, so too is the range of solutions being developed and deployed by our Eco Innovation Alliance members. The coalition process is proceeding fast, and the input of the Alliance is informing the discussion and making an important contribution.
You too can get involved and join the agenda setting Eco Innovation Alliance. Contact me (David Wortmann) and do your part to unlock Eco Innovation now. Change is happening. Be a part of it.
Article contributed by David Wortmann, founder & CEO of DWR Eco
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