Today we are on the threshold of a mobility revolution, as the Chancellor has put it. You are the drivers of this revolution. The vehicles and technology you are producing and developing are changing the way we get around and the energy sources that feed our mobility. This change involves much more than “just” replacing internal combustion vehicles with electric cars or electrically powered buses.
It is not just a transformation of cars – what we need is a holistic transformation of mobility and the whole energy system.
Replacing an oil-powered combustion car by a coal-fired electric car will not get us there.
The mobility revolution is an important part of the more encompassing transformation we are undergoing.
I came here to share with you from an international climate perspective why your industry, your technological and innovative drive are highly important if we are to keep the limit of 1.5 degrees global warming in reach.
And I came here to listen to your ideas on what we can do as governments to help you make this transformation a reality.
You all know very well that this transition is a major task. We also know we have to continue to address bottlenecks - the price of electricity, batteries and the lack of charging infrastructure.
No company and no government will be able to master this transition alone. The public and the private sector need to work hand in hand to drive forward the e-mobility transformation. Companies have the ingenuity, the creativity and the business mindset to know what customers want. Governments are responsible to create the conducive regulatory framework for entrepreneurial investment, to provide tailwind for the pace of change we need.
I talk to people all around the world, most recently at the Africa Climate Summit on Monday and Tuesday this week, and for me it is clear that the “Zeitgeist” is moving towards more sustainable and climate friendly solutions, especially amongst young people.
They want a car that no longer smacks of air pollution, but is part of a circular, sustainable economic system. They want to bring their children to school without emitting any GHG emissions. The new consumers give sustainability an important place in their purchasing decisions. In many places, it is cool to drive a car that is climate friendly.
It is your engineering and your innovation that are shaping the future of mobility.
You all know that being at the forefront of the green transformation will be a tangible business advantage in the years and decades to come. Beyond the size of a market that is rich in potential, it is in the interest of the brand value of your companies to be a pioneer of this transformation.
Car commercials typically are about a certain attitude to life; Elegance coupled with groundedness and the freedom to discover the beauty of the world. CO2-neutral cars are your chance to bring this promise into the 21st century.
Bringing truly green and clean cars to the market is a unique opportunity for your companies to re-brand what they stand for. It is your chance to be agents of change.
In the future we will likely not only use vehicles to get from A to B;electric cars will likely contribute to the storage of electricity, feed into the grid, making every single car owner part of the transformation.
Your companies can contribute to addressing the climate crisis because the cars that you produce will be an important part of the solution. Part of the solution to the biggest and most important task of our generation: To stabilize our climate, which is currently in a crisis. A crisis that, unless we succeed in profound and rapid transformation, threatens to destroy much of what makes up our prosperity today.
It requires our courage, our determination, our leadership to make this vision a reality. If we continue on the path we´ve taken, or do not move at the scale and speed required, this future is out of reach.
The transformation we need to keep our lives and the lives of our children and grandchildren on this planet worth living is profound. It will be drastic, as it will radically change our economic and energy system. It will be challenging. With disruptive impacts on markets and industries. With effects on jobs, on industrial locations, on social cohesion. How we work through this just transition together is fundamental. But – as you all know – in change and disruption, comes great opportunity.
We cannot close our eyes to the necessity and urgency of this transformation. Let´s take a look at what is at stake if we fail.
We are already experiencing severe climate impacts around the world - also in both of our countries.
Last summer, the German river Rhine, a crucial shipping lane, was on historically low water levels with devastating impacts for inland shipping, industry and tourism as well as for the river’s own ecosystem. Ships got stuck, the riverbed almost dried up and many fish were dying. Something very similar happened in China, where the water levels at the Yangtse river went so low, that it was causing power shortages in Sichuan und many industries had to reduce or even stop production.
Thousands of kilometers away from each other, the two rivers suffered from the same problems – record temperatures, droughts and low water levels. So far away, yet so connected…
The crisis is a direct threat to human life: Extreme heat this summer once again killed people; it put entire societies in check for days because it simply was too hot to work. It is a threat to food security as rising temperatures are withering crops, more frequent floods are destroying them. As happened just a few months ago in China´s northeastern provinces, known as the country´s “grain basket”. The indirect effects of the climate crisis go even further: it destabilizes societies, fuels conflicts and disrupts peace and stability.
And clearly, the crisis puts our prosperity at risk: Business as usual will come with enormous economic losses. It is estimated that unchecked climate change could cost the global economy 178 trillion USD over the next 50 years. In China, the annual costs of climate change amount to 50 billion annually, that is 0.4 percent of GDP. In Germany, according to experts, the climate crisis could cost our economy up to 900 billion EUR by 2050. And right now iEvery 18 days have a 1 billion climate event on this planet.
While things are starting to move, we are still far off-track. If we continue business as usual, we are heading towards a 2.5 – 2.7 degree pathway with all its consequences for life on this planet.
This is a truly decisive time. This decade will determine whether we will be able to limit the destructive effects of the climate crisis and keep the 1.5 degree in sight. That is a key take-away from the sixth synthesis report by the IPCC issued in March this year.
The IPCC report says there’s a “rapidly closing time window for actions to secure a liveable and sustainable future for all. The choices and actions we take now will have impacts for thousands of years”. Let me repeat that: The choices and actions we take now will have impacts for thousands of years.
So it is on us, my generation – your generation – to take that responsibility and to make the right decisions and change things for the better.
We can do that. We have sufficient knowledge, tools and global capital available to tackle the challenges of the climate crisis. The IPCC-report shows that it is possible to halve our emissions by 2030 at an affordable cost.
Public attention tends to focus too much on the costs of the energy transition – solar panels, heat pumps, EV-charging infrastructure – but we don’t focus enough on the money that we can save through ambitious climate action. And on the opportunities that new markets, such as the EV market, hold - once we manage to overcome remaining hurdles.
You know there is a strong business case in putting your companies at the forefront of the green transformation. Trends show that electric cars are the future. The market for e-vehicles is growing significantly.
E-mobility can make a real difference. (In 2022) globally, transportation accounted for 20 percent of total emissions.
Passenger cars accounted for nearly 40 percent of the CO2 emissions generated by the transportation sector worldwide. Together, vehicles produce around two thirds of global CO2 emissions in the transportation sector. Two thirds of 20 percent of total emissions is a lot.
What does this mean for the level of change we need to prevent the worst-case scenarios of global warming?
According to the sixth IPCC report, in scenarios that limit warming to 1.5°C with no or limited overshoot, global transport-related CO2 emissions must fall by 59% by 2050 relative to modelled 2020 emissions.
Let me repeat this: to keep 1.5 °C within reach, transport-related CO2 emissions must fall by nearly 60 percent within three decades.
The task ahead of us is huge. But it is doable. A recent analysis (International Council on Clean Transportation ICCT) stated that the shift to battery electric vehicles would reduce total lifecycle CO2 emissions by around 65 percent based on the current average energy mix in Europe and by 83 percent with entirely green electricity.
As business leaders, you will shape the depth and speed of this transition.
For me the key question is this:
How can we harness the full potential of e-mobility? What does it need to make the whole transportation sector a future-looking part of the transformation?
On this, we must think and act systemically, because we have no time to lose. It is key that we bring e-mobility together with the energy transition. (E-cars powered by coal will not carry us far)
In order to be truly transformational electrification must go hand in hand with scaling up renewables – and phasing out fossil fuels.
We have to eliminate greenhouse gas emissions from all phases of the car’s life cycle and charge them using renewable energy. The transformation we need must encompass the entire value chain with a systematic shift to green raw materials and recycling. We must look at the supplier industry. As the electricity supply evolves and charging a larger fleet of electric vehicles with green energy becomes feasible, materials and production will become more important sources of emissions in the life cycle of an electric vehicle.
There are ideas out there that are truly inspiring; the commitment to build a climate neutral vehicle by 2030, for example. Or the ongoing research and development aiming to turn cars into bi-directional energy storage devices – and thus upgrade it from an individual commodity to a public good.
Looking at the pace and scale of change that are necessary, we need radical collaboration amongst the private sector and governments to make it happen.
We need forward looking and far-sighted business leaders whose investments reflect that ambitious climate action is an integral part of their business strategies. And your efforts must go hand in hand with ambitious climate and energy policies.
It is the role of us governments to create proper framework conditions to incentivize the kind of investments we need and to lead the financial flows in greener and more sustainable directions. For reliable, affordable and clean energy and a reliant supply of taw materials we are working at a national level, we are developing our bilateral and plurilateral relations with energy partnerships and raw material partnerships. And we are working hard to make progress at the international level as well. In this way, we want to give tailwind to the industries that are actually implementing the green transformation.
To get the necessary pace and scale of the mobility revolution going we need to look beyond Germany, and beyond China. We need to think this globally. Regulatory pressure and consumer pull toward electric vehicles vary from region to region. Of course, the ambition of countries regarding e-mobility is closely related to their overall ambition on climate and on the energy transition. As climate negotiators, we are working to do our part to improve the framework conditions for transformative industries globally.
At COP28 this year in Dubai we will aim for a phasing out of fossil fuels and we will try to anchor a global renewable energies target that will include energy efficiency and adequate financing. IRENA suggests that we need at least an annual addition of 1 TW to stay on the 1.5 degree path. The IEA says a tripling of the global expansion rate is needed. The G7 have already set their own collective targets for solar and wind capacity. And the designated president of the COP28 is calling for a tripling of renewable energy generation by 2030.
Together, we have a chance to build a world where both renewable energy and mobility are reliable, accessible and affordable for everyone.
To get there we need your courage and your leadership. With the innovative capacity and the economic and political influence assembled at this conference, we can shift the transportation sector from being part of the problem to being part of the solution.
I am open to any ideas on how governments can help you make this vision a reality.