How Do German Manufacturers React to the Increasing Societal Pressure for Decarbonisation?

Abstract

From the perspective of manufacturing companies, the political, media and economic discourse on decarbonisation in the recent years manifests itself as an increasing social expectation of action. In Germany, in particular, this discourse is also being driven forward by powerful companies, respectively sectors, most notably the automotive industry. Against this background, the present paper examines how German manufacturing companies react to rising societal pressure and emerging policies. It examines which measures the companies have taken or plan to take to reduce their carbon footprint, which aspirations are associated with this and the structural characteristics (company size, energy intensity, and sector) by which these are influenced. A mix methods approach is applied, utilising data gathered from approx. 900 companies in context of the Energy Efficiency Index of German Industry (EEI), along with media research focusing on the announced decarbonisation plans and initiatives. We demonstrate that one-size-serves-all approaches are not suitable to decarbonise industry, as the situation and ambitions differ considerably depending on size, energy intensity and sector. Even though the levels of ambition and urgency are high, micro and energy intensive companies, in particular, are challenged. The present research uncovers a series of questions that call for attention to materialise the ambitions and address the challenges outlined.

What Motivates Companies to Take the Decision to Decarbonise?

“…Table 1 provides an overview of the sample by company size (as defined by the European Commission [32]). As explained by Buettner et al [33] (pp. 3-4), we aim for an approximately even distribution across company sizes for EEI's samples instead of following the actual size distribution of manufacturing companies in Germany [28].…”

“…Automotive industries and mechanical engineering are two of the eleven sectors of high importance for German industry. When taking a sectoral viewpoint in this paper, only sectors with at least 20 companies providing answers to the respective questions are considered [33].…”

Roadmap to Neutrality – What Foundational Questions Need Answering to Determine One’s Ideal Decarbonisation Strategy

“…The present article addresses this gap by illustrating what seven foundational questions matter and need answering to provide practical guidance on how to shape an effective and tailored decarbonisation strategy. Derived from professional practice and applying a mix-methods approach building on data gathered via the Energy Efficiency Index of German Industry (EEI) [29], the work addresses underlying motivations and spans across (socio-)economic, technical, regulatory, strategic, corporate culture and environmental factors and further underlines the necessity of a mutual understanding, clarity and communication of definitions and targets.…”

“…By when do companies plan to reach net carbon neutrality? [29][30] Taking the likely impact of the COVID-pandemic into consideration and addressing the apparently important milestone year 2025, the first iteration of EEI in 2020 found that the 611 participating companies on average, and based on 2019 figures, aim at reducing their GHG emissions by 22.09 % by then [31]. Asking for their 2030 ambitions at the time when the enhanced target of the European Commission for 2030 was being discussed (autumn 2020), 415 companies participating in the 2 nd data collection of EEI in 2020 expressed to aim for a 26.43 % GHG reduction (based on 2019) [32].…”

“…In essence, it now matters-building on the answers to the seven foundational questions -to determine the proportion to which the goal is to be achieved through measures that can be implemented locally and measures that are to be implemented externally or by others. As described by Buettner et al [29] internal measures can include:…”