Article written by: Federico Lucchi and Julia Galusiakowska
European countries have been among the most hit by the health, economic and social crisis brought about by the Covid-19 pandemic. The European Union, through the Recovery and Resilience Facility (RRF), commits a total of €1.8 trillion to sustain the post-pandemic recovery and to improve the long-term prospects of Europe and its citizens. NextGenerationEU (also branded Recovery Fund) was agreed upon on 21 July 2020, becoming the largest stimulus package ever financed through the EU budget. By submitting a comprehensive national plan, every Member State is eligible to obtain RRF funds to enhance resilience, mitigate impacts of the crisis, as well as support the green and digital transitions.
European Generation believes in the historical significance of this project, and realizes how big of an opportunity this is. Hence, we believe it is crucial, for all European citizens, to understand what national and European leaders are doing to seize such an opportunity. This is the final aim of this series of articles, which we have entitled “YOU are the Next Generation” as to underline the direct impact the decisions taken in the Recovery and Resilience Plans will have especially on younger generations, as well as the responsibility each and every one of us has in shaping the present and the future of Europe.
Germany’s recipe for long-term prosperity
Germany plays by the rules: the first draft of the German Recovery and Resilience Plan (GRRP) was submitted to the European Commission (EC) in December 2020 and officially approved by the Bundestag on 25 March 2021. The plan takes into account country-specific recommendations (CSRs) issued in the context of the European Semester. With an object to force the biggest European economy out of recession, the German government prepared a multidimensional GRRP: the plan covers a broad spectrum of issues, ranging from green transition to digitalization, to strengthening social values, cohesion, and resilience. Yet, digital transformation and climate change remain the main challenges in the current environment.
Focus Area 1: Sustainability and Green Transition
The GRRP addresses the significance of large-scale reorganization of energy sources in grinding to a halt human contribution to global warming. Consequently, it strives to accomplish the Sustainable Development Goals and the Paris Agreement’s targets. By joining forces, the German government and the EU aim to achieve net-zero greenhouse gas emissions by 2050. In effect, 40% of the total budget has been allocated to decarbonization using renewable hydrogen, climate-friendly mobility, and climate-friendly construction.
The main component of the green transition project includes the National Hydrogen Strategy, responsible for undertaking research and fostering innovation to decarbonize the economy and society. Using sustainable CO2-free hydrogen produced with renewable energy is supposed to make Germany an industry leader; at the same time, it requires massive investments in manufacturing, infrastructure, R&D, and technology. Within the framework of an IPCEI (Important Project of Common European Interest) for Hydrogen, Germany plans on undertaking various concrete projects. For instance, the government formulated a plan to build large-scale electrolysis capacity to produce and use sustainable hydrogen, to eventually develop a European value-added chain for fuel cell systems for vehicle drive systems. The build-up of infrastructure will be necessary to transport hydrogen, being key to pursue the overall aim of establishing a European market for green hydrogen. The energy system transformation will involve mainly small and medium-sized enterprises (SMEs) that produce high amounts of carbon, local authorities, and urban regions.
In planning their energy transition, Germany specifically emphasized climate-friendly mobility, centering on the sustainable transport and implementation of the EU flagship initiative Recharge and Refuel. Subsidies for infrastructure are to promote the market ramp-up of battery- and hydrogen-based electric vehicles, such as buses with alternative drives and alternative drives in rail transport. As a part of the National Hydrogen Strategy, heavy goods vehicles are to be supplied with hydrogen and fuel cell technology. Eventually, Germany established the Hydrogen Technology and Innovation Centre for improving the value-added chain of hydrogen and fuel cell technologies for mobile applications with a focus on fuel cell systems. The center would focus on SMEs and start-ups, allowing them to compete internationally.
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