Chancellor Merz warns climate measures must not trigger deindustrialisation

German Chancellor Friedrich Merz has stated that climate protection initiatives must not impede economic progress or precipitate deindustrialisation. Speaking at the Petersberg Climate Dialogue in Berlin, the Chancellor warned that a transition leading to the hollowing out of industry would lack public acceptance and ultimately hinder innovation.

While affirming Germany's commitment to reducing climate change, Merz insisted that such efforts require multilateral policies that are both ambitious and effective. He argued that retaining public support for a green transition is contingent upon maintaining competitiveness and ensuring that economic growth is not sacrificed for environmental goals.

The Chancellor highlighted the potential for clean energy to act as a driver of economic expansion. He noted that the global market for green technology is projected to nearly triple by 2035, reaching approximately $2 billion. In Germany specifically, the clean-tech sector has grown 50 per cent faster than the overall economy since 2010.

Merz expressed support for emissions trading, describing the market-based approach as technology-neutral. However, he called for an update to the European Union's emissions trading system rules with a clear focus on maintaining competitiveness. He stated that such reforms are necessary to ensure the scheme remains fit for the future.

The German government has set a target of achieving climate neutrality by 2045. Despite Merz's insistence that the country will meet its targets, his coalition government has faced criticism from environmental groups for rolling back certain green policies.

Recent government proposals include calls to loosen the EU's ban on combustion engines and to push for the construction of gas-fired power plants. These moves underscore the administration's attempt to navigate the tension between aggressive climate goals and the preservation of industrial capacity.