EIO Country Brief: Germany 2011 0

EIO Country Profile

2011

Eco-innovation in

Germany

EIO Country Brief: Germany 2011 1

Eco-Innovation Observatory

The Eco-Innovation Observatory functions as a platform for the structured collection and

analysis of an extensive range of eco-innovation information, gathered from across the

European Union and key economic regions around the globe, providing a much-needed

integrated information source on eco-innovation for companies and innovation service

providers, as well as providing a solid decision-making basis for policy development.

The Observatory approaches eco-innovation as a persuasive phenomenon present in all

economic sectors and therefore relevant for all types of innovation, defining eco-innovation as:

“Eco-innovation is any innovation that reduces the use of natural resources and decreases the

release of harmful substances across the whole life-cycle”.

To find out more, visit www.eco-innovation.eu

Any views or opinions expressed in this report are solely those of the authors and do not necessarily

reflect the position of the European Commission.

EIO Country Brief: Germany 2011 2

Eco-Innovation Observatory

Country Profile 2011: Germany

Author

Bettina Bahn-Walkowiak and Dominik Ritsche

Coordinator of the work package

Technopolis Group Belgium

Acknowledgments

We would like to thank Till Ruhkopf for his assistance with the preparation of this country brief.

A note to Readers

Any views or opinions expressed in this report are solely those of the authors and do not necessarily

reflect the position of the European Commission. A number of companies are presented as illustrative

examples of eco-innovation in this report. Their inclusion in this report does not imply that EIO endorses

these companies and, it should also be noted that, the report is not an exhaustive source of information

on innovation at company level.

This brief is available for download from www.eco-innovation.eu/Germany

EIO Country Brief: Germany 2011 3

Table of contents

Summary .................................................................................................................................... 4

1 | Introduction ............................................................................................................................... 5

2 | Eco-innovation performance .................................................................................................... 6

3 | Established eco-innovation areas and markets ..................................................................... 9

4 | New trends and emerging eco-innovation markets ............................................................. 14

5 | Public policy in support of eco-innovation ........................................................................... 19

5.1 Key national strategies promoting eco-innovations ...................................................................19

5.2 Most relevant national measures supporting eco-innovations including regulatory and

market based instruments promoting eco-innovation and application ........................21

6 | Main findings ........................................................................................................................... 24

6.1 Strengths and weaknesses of eco-innovation in Germany .......................................................24

6.2 Opportunities and threats to eco-innovation in Germany ..........................................................25

References .................................................................................................................................................... 27

ANNEX 1. Policy measures addressing eco-innovations in Germany .................................................... 30

EIO Country Brief: Germany 2011 4

Summary

Germany is highly export-oriented with a strong focus on the manufacturing industry (automotive

industry, mechanical industry, etc.) and a relatively resource-poor country at the same time. It has to

import nearly all important resources (such as oil, metals, etc.).

Germany has a strong position in the field of environmental technologies as a result of a traditionally

strong mechanical engineering sector, which has been developed to successfully meet new challenges.

Germany scores above EU27 average in the areas eco-innovation inputs, activities, outputs and

environmental outcomes and below in socio-economic outcomes. The highest result is achieved in eco-

innovation output, which is mainly due to a considerably high number of eco-innovation related patents.

Well established eco-innovation areas and markets are the sectors “recycling management” and

“sustainable water technologies”, which show an extraordinary high world market share (24% and 19%).

The establishment of the German Material Efficiency Agency (demea) in 2006 has served as a starting

point and a driving force for resource efficiency becoming increasingly important in many R&D and in the

SME support programmes. Still, this facility is estimated to be less powerful than the German Energy

Agency (dena), which was established in 2000. However, start-ups such as the Centre for Resource

Efficiency (VDI ZRE) implemented in 2009 and the establishment of the German Mineral Resources

Agency in 2010 further expand the infrastructure, in order to explore the knowledge base more

systematically and move it closer to markets.

New trends and emerging eco-innovation markets are formulated in the German High-Tech Strategy

which supports innovation activities and offers incentives for cooperation between academia and

industry. In particular energy efficient housing and sustainable building materials play a major role

regarding energy and material efficient construction and housing.

Germany can be counted among the eco-innovation leaders with a good performance above the EU27

average. The economic capital and technical and technological capital is high. German patent

applications are leading in Europe (more than 27,000 applications after 40,000 US and ahead of 22,000

Japanese applications). The regulatory and policy framework (legal system, standards and norms, IPR

law, fiscal policies, public procurement, etc.) and infrastructures can be classified between medium and

high performance. A lack of enduring policy integration hampers the pace of progress. An overarching

strategy with binding targets, incentives and roadmaps that mobilise all actors along key areas will have

to become a priority on the agenda for eco-innovation. While the position on climate and energy related

eco-innovation seems far advanced, the new agenda of resource efficiency deserves more attention,

and more needs to be done to maintain the success on international markets, in particular the linkages

of programmes like “ProgRess” (German Programme on Resource Efficiency), the Sustainable

Development Strategy and the High-tech Strategy have to be strengthened with regard to demand side

policies.

EIO Country Brief: Germany 2011 5

1 | Introduction

Germany has a population of 82 million inhabitants and belongs to the most densely populated countries

of the world (230 inhabitants per sq km) associated with high traffic and transport volumes, CO2

emissions, congestions, large net-bound infrastructures and a strong urbanisation. This stock amounts

to 7.3 billion tonnes in the German road infrastructures in 2007 which means a high yearly consumption

of diverse resources for maintenance (Steger et al. 2010). On the other hand, extensive infrastructures

means high stocks of secondary resources. In 2009, 74% of the Germans lived in urban agglomerations

including the largest dwelling stock in Europe (Eco-innovation database 2011). As regards natural

resources, Germany has lignite (brown coal), potash salt, industrial minerals and construction minerals

(sand, gravel, and crushed natural stone). 62% of oil, natural gas and other energy resources and all

metals have to be imported (Eco-innovation database 2011), so that one can speak of a high import

dependency due to resource scarcity.

In contrast to most other Western countries, Germany has a nearly constant high share of

manufacturing in the gross domestic product. Germany’s major economic sectors in terms of their

contribution to GDP are the manufacturing industry (27.9%), in particular the automotive industry,

mechanical engineering, the chemical industry, energy technology, electrical engineering industry,

electronics industry, metal production and processing, food and beverages, shipbuilding, textiles. The

manufacturing sector is vulnerable to supply shortages because it is highly dependent on raw material

imports from the world market, particularly of metals. Services including the information &

communication sector and the waste management industry account for 71.3% and agriculture and

forestry only amount to 0.8% (CIA, 2011).1 The dependence of the German economy on the automotive

industry, the transportation sector and the chemical industry is noteworthy.

Due to possible future supply shortages of non-energy minerals, e.g. critical metals for high-tech

applications the development of new materials, technologies and processes and the substitution of

materials provides a significant challenge for Germany. According to a recent study, approximately 70%

of new products and processes are based on material or material-related innovations benefiting

industries such as mechanical engineering, automotive engineering, electrical engineering, metal

processing and medical technologies. Together they generate annual revenues of around €1b and

employ about 5 million people in Germany (VDI/BAM, 2011). On the other hand, economic and financial

constraints (due to the financial crisis) complicate the conditions for eco-innovations in Germany.

Furthermore, the decision of the German federal government for a nuclear phase-out until 2022 has to

be stressed because it will require and induce radical and transformative eco-innovative solutions in the

energy and building sectors.

1 The labour force is about 43.3 million; i.e. 29.7 million persons are employed in the service sector, 9.9 million in the

manufacturing sector, 0.8 million in the agricultural sector, 2.9 million are unemployed (Federal Statistics Office, 2011).

The R&D personnel of the total labour force was 2.85% in 2008 (Eco-innovation database, 2011).

EIO Country Brief: Germany 2011 6

2 | Eco-innovation performance

The analysis in this section is based on the EU 27 Eco-innovation scoreboard (Eco-IS) for the year

2011. Eco-IS via its composite Eco-innovation index demonstrates the eco-innovation performance of a

country compared with the EU average and with the EU top performers. Eco-IS is based on 16

indicators, which are aggregated into five components: eco-innovation inputs, eco-innovation activities

and eco-innovation outputs as well as environmental outcomes and socio-economic outcomes.

With an overall score of 123, Germany eco-innovation performance is well above EU average (=100)

and it is ranked number seven as illustrated in the bar chart Figure 2.1 below. Compared to 2010,

Germany has dropped three places. However, caution is required in comparing 2010 and 2011 indices,

as the basket of indicators in the 2011 scoreboards has been modified (see EIO, 2011).

Figure 2.1 EU27 Eco-innovation scoreboard 2011, composite index

Source: EIO, 2011

The radar diagram (figure 2.2) shows a more detailed picture and illustrates that Germany scores above

EU27 average in four components (eco-innovation inputs, activities, outputs and environmental

outcomes) and below EU27 average in one component (socio-economic outcomes) of the five

components of the Eco-innovation composite index. In the area of environmental outcomes it is close to

average, but very significantly above in the area of eco-innovation outputs.

EIO Country Brief: Germany 2011 7

Figure 2.2 Components of the eco-innovation composite index for Germany, 2011

Source: EIO, 2011

Eco-innovation inputs

As regards the eco-innovation inputs, measured based on government investments in environmental

and energy R&D, green early stage investments and total R&D personnel, Germany shows again above

EU27 average performance in 2011. It has not advanced in the overall ranking and features seventh

best. The composite eco-innovation input index for Germany values at 129 with the EU average being

100. Compared to Finland (272), Sweden (213) and Ireland (211), the German eco-innovation inputs do

not appear very high.

The financial inputs, the Governments’ environmental and energy R&D appropriations and outlays, were

approximately 7% of GDP in 2009 (150) which was well above the EU27 average of 5% but far away

from countries such as Japan (10%) or South Korea (14%). In 2007, Germany’s share of total R&D

personnel and researchers was 1.73% of the total labour force and total employment (120). The total

value of green early stage of investments in 2007 to 2009 were €8.80 per cap in Germany, which was

slightly above the EU average (117) but only one quarter of what is invested in Ireland and Finland (both

471).

Eco-innovation activities

Eco-IS results demonstrate that Germany is performing above average (125) in its activities for eco-

innovation. Although Germany is (as well as Portugal) best-performing in the two categories “Firms

having implemented innovation activities to reduce material inputs” (score 166) and “Firms having

implemented innovation activities to reduce energy inputs” (164) in 2008, it is poorly scoring in the

category ISO 14001 registered organisations in 2009 (44). This may be explained by the high

preference of the EMAS certification over ISO14001 in Germany.

EIO Country Brief: Germany 2011 8

Eco-innovation output

As regards the eco-innovation output, Germany shows a good above-average ranking. The value scores

at 160 (EU average 100) and ranks sixth after Luxembourg, Austria, Sweden, Finland and Denmark,

and almost equal to Ireland. Compared to the 2010 data, Germany has lost two places and the value

has dropped (from 245). While Germany’s performance is excellent concerning eco-innovation related

patents (287) in 2008, the academic publications related to eco-innovation are only slightly above

average (114) and, in particular, the coverage of "eco-innovation" in electronic media does not perform

well (78) in 2010. The last two variables were not included in the scoreboard 2010.

Environmental outcomes

Concerning the environmental outcomes, Germany is performing middle-rate; it ranks eighth with a

value of 110, whereas the best performer Luxembourg has a value of 145. Germany retained its position

in the ranking compared to 2010.

The material productivity of Germany has grown in the years 2000 to 2007 from a rate of 1.27 to a rate

of 1.8 €/kg (index 119). However, the target of the national Sustainability Strategy of doubling ‘raw

material productivity’ as measured by the German Federal Statistical Office by the year 2020 based on

1994 is not likely to be achieved. As regards energy productivity, it is 6.86 €/tonne of oil equivalents in

2009, which is average in the EU (index 99). The import dependency of Germany as share of imports in

energy supply is 61%, which is average compared to other European countries. With the GHG

emissions intensity of the whole economy of 0.41 kg CO2 equivalent/€ in 2009, Germany is now

performing below average (index 96), while the water productivity, or the value of gross domestic

products produced using one cubic meter of water equal to 14.96 €/m3 in 2001, is 20% above the EU

average indicator.

Socio-economic outcomes

Regarding the performance in socio-economic outcomes measured by the exports of products from eco-

industries (% of total exports), employment in eco-industries (% of total workforce) and turnover in eco-

industries, Germany is below average (score 95). The ranking shows position 14 (after position 6 in

2010), while the best performer Slovenia scores 233.

The exports of the eco-industry in 2010 have been steadily increasing since 1999 and amount to a 1.5%

share of the total exported goods and services in 2010 (rank 5). 0.79% of the total workforce was

employed in the eco-industries in 2008. The turnover of the eco-industries in 2004 was 2.79% of total

GDP.

EIO Country Brief: Germany 2011 9

3 | Established eco-innovation areas and markets

Germany is strong in the production of environmental goods (technologies, machinery and equipment)

and has world market share of more than 15% (BMU, 2011, BMU/UBA, 2009a, 2009b). Two sectors

show extraordinary high world market shares: recycling management (24%), including waste separation

technologies where the share is 64%, and sustainable water technologies (19%), both achieving

together a turnover of €85b in 2008 (Germany Trade & Invest, 2011). 2 million persons are employed in

the environmental sector (BMU, 2011). The share of environmental protection goods of the German

industrial goods exports was nearly 7%. Since the contribution of environmental technologies within the

German export has always been exceptionally high, the environmental technology industry kept this

position at a steady high level. As a part of the path of systemic innovations, research and development

spending has increased from 2.5% in 2007 to 2.8% of the gross domestic product (GDP) in 2009. The

state share grew from 30.7 to 32.3% while almost two-thirds of R&D expenditure is financed by industry

(Destatis, 2011). Over 15% of the applications to the European Patent Office came from Germany in

2010, which thus ranks second worldwide and has outstanding values in the fields of transport, electrical

machinery, apparatus, energy and organic fine chemistry.

Germany’s good performance in the eco-innovation area is shaped by a mixture of radical innovations in

the waste and recycling sector, by incremental eco-innovations which amount in high total potentials in

the industrial sector through strong promotion of clean and resource efficient production and

transformative innovation such as the nuclear phase-out inducing a overall societal shift to alternative

electricity generation accompanied by an extensive introduction of renewable energy technologies.

Energy efficiency and renewable energies

Since 1974 Germany has been promoting research and innovation in the field of renewable energies. A

very important driver for the development of renewable energies in the electricity sector was the

Renewable Energies Act (EEG) of 2000. Here, Germany had an unprecedented and radical national

growth of renewable energies and a noteworthy diffusion of the policy instrument could be observed

internationally. In Germany, a doubling in the share of renewable energies in electricity production in the

period 1991 to 2000 was the result (BMU, 2009).

Further policies, such as a market incentive programme for the utilisation of heat from renewable

sources (1999), the Renewable Energies Act (2000), its new formulation (2009), the Renewable

Energies Heat Act (2009) and the Act to promote combined heat and power (2009), have supported the

share of 17% of renewables in electricity supply. The nuclear phase-out of Germany will be a historical

and in terms of innovation transformative milestone and will further push the renewables sector,

especially when subsidies for coal fired power plants and energy intensive companies would be phased-

out. A gradual but slight reduction in tax exemptions for energy intensive companies has been decided

in 2011 (Bär et al., 2011).

Although the policy area of resource efficiency is far from the degree of complexity and detail the energy

sector has reached, success stories such as the high share of renewables in electricity generation and

the implementation of the raw materials productivity target of the National Sustainability Strategy

(2002/2004) will serve as a good starting basis for increasing and incremental innovation activities of

different actors around resource efficiency (UBA/BMU, 2008).

EIO Country Brief: Germany 2011 10

Figure 3.1 Eco-industry Exports by Sector in Germany, 2004

Source: Ernst & Young, 2006

Recycling and waste management

In the recycling and waste market segment, German companies are very well positioned compared to

other European countries. The private waste management industry has a crucial role in ensuring that

Germany has a very good performance in recycling, more than three-quarters of municipal waste is

recycled (UBA, 2009). Separately collected fractions such as glass, waste paper, plastic packaging, and

bio waste are recycled by almost 100%, electronic devices by 85% (UBA, 2009). The overall municipal

waste recycling quota per capita for 2009 is stated to be at 48% which ranks first within Europe (Eco-

innovation database 2011)2. This is a consequence of the Recycling and Waste Management Act

established in 1994 providing incentives for recycling and resource-efficient developments and is an

example for a radical innovation. The regulations for the take-back system of packaging, batteries, end-

of-life vehicles and wood in Germany were later established at European level (BMU/UBA, 2009a).

Increasing the recycling rates to a high level is crucial for Germany especially for metals, which have to

be imported, in order to reduce risks associated with import dependencies.

At national scale, the recycling sector offers high economic opportunities for Germany. It has 6,000

companies, employs 200,000 people and generates an annual turnover of about 50 billion EUR (Federal

Ministry for the Environment, 2010). At international scale, the Export Initiative Recycling and Efficiency

Technologies (ReTech) platform, supported by the Federal Ministry for the Environment, reports a

growing demand for recycling and waste management technologies from Germany and hence a

considerable international market share of about 25% in this sector (Federal Ministry for the

Environment, 2010). The global market for waste management and recycling plants is estimated to

comprise €35b. Knappe and Blazejczak (2007) quantify an export potential of €5.7b for the German

recycling industry until 2020. Hence, sectors such as mechanical and electrical engineering,

measurement and control technology and automotive engineering will profit from the high future

demand.

2 According to the Federal Environment Agency the recycling share of the municipal and industrial waste is 63% in 2009.

EIO Country Brief: Germany 2011 11

Mechanical-biological waste treatment (MBT)

Mechanical biological waste treatment is applied on

mixed organic/carbon rich waste with the aim to achieve:

1) a stabilisation and minimisation of the risk potential

together with a significant weight and volume reduction

through biological decomposition which could count

towards the diversion of biodegradable waste from

landfill, and in conjunction therewith

2) the processing of waste in order to generate separate

material streams, recover recyclable materials and

improve the suitability for subsequent treatment processes.

Source: http://www.retech-

germany.net/english/topics/waste_management_made_in_germany/technologies/selected_technologie

s_municipal_waste_management/dok/697.php

Picture source: http://www.retech-

germany.net/english/topics/waste_management_made_in_germany/technologies/selected_technologie

s_municipal_waste_management/dok/697.php

Sustainable Water Management

Germany’s water management comprises various principles on different levels (federal, state and

municipal levels). The Federal Water Act represents the frame for drinking and wastewater ordinance,

water purification and distribution systems and prices for drinking and wastewater. These strict

regulations force the German water management to implement innovative technologies, addressing the

above issues. As a result, for example, only the Netherlands (95% in 2007) shows a higher share of

resident population connected to a wastewater collection and treatment system (tertiary wastewater

treatment system) than Germany (93% in 2007) (BMU, 2011c, Eurostat, 2011b).

The German water management sector (collection, purification and distribution) employs 40,000 direct

staff members and generated a turnover of about €10b in 2008 (Eurostat). Future opportunities are high.

The worldwide investment needs in the fields of water supply, sewage treatment and water-efficiency

technologies are estimated to add up to €480b until 2020 (UBA/BMU, 2007, 2008, 2010). The German

water management sector (including for example technical firms for plant and facility installations,

construction companies and producers of components) benefits from national and international

collaboration. The German Water Partnership aims to reinforce the competitiveness of the German

water economy on international markets. The German manufacturers and suppliers of equipment and

systems for water, wastewater and sludge treatment reported a successfully running business in 2010.

With a volume of €837m, the production of components and systems for water treatment and

wastewater treatment nearly achieved the previous year result of €850m in 2010. The positive

development is reflected by a high world market share of German sustainable water technologies of

about 19% (Germany Trade & Invest, 2011).

EIO Country Brief: Germany 2011 12

Decentralised water management - eco-efficient recycling of gray water (e.g.

AquaCycle 2500)

The shower and bath water is recycled in a patented bio-

mechanical process without chemical additives. The result

is hygienically clean process water. The gray water is

purified in a multistep process, and sterilised by ultraviolet

irradiation - a gentle, energy-saving manner. Shower and

bath water that is consumed in residential buildings,

hotels, swimming pools, or fitness centres can be recycled

with a decentralised water management system so that it

can be used for toilet flushing, cleaning or for irrigation of

green spaces. To save even more heat energy, the

system allows for recovering the residual heat of the gray water (such as from showering or bathing).

By the end of 2010, a newly developed optional heat exchanger module will be provided. The resulting

heat generated in the order of 10-15 kWh per cubic meter resulting gray water is supplied to the heat

storage of the hot water heating or heating.

A fully automatised, closed recycling system with a patented cleaning process that works with low

maintenance and operating costs and is weather-independent. The system AquaCycle 2500 can also

be combined with a rain water system.

Information Source: http://pro.hansgrohe-int.com/assets/global/pontos_ac2500_brochure.pdf

Picture source: http://pro.hansgrohe-int.com/assets/global/pontos_ac2500_brochure.pdf

Clean production – Resource and material efficiency in enterprises

The distribution of information and know how is most important in order to meet efficiency goals.

Therefore German policy (federal and state level) supports various efficiency agencies that help

identifying resource efficiency potentials in German companies and induce incremental innovation.

The Efficiency Agency North Rhine-Westphalia (EFA) has been advising companies in the areas of

production, product and cost accounting with proven tools as to a resource-efficient in-house

management since 1998 at federal level. The counselling takes place on the basis of a cooperation

agreement between EFA, businesses, and a freely chosen consultant. Proportionally, public funding can

support the company.

At state level, the German Material Efficiency Agency (demea) was established in 2006 and advises

German companies concerning material saving potentials. A consultant visits the company and prepares

a list of possible efficiency rising measures. An average company can save materials worth €210,000

per year (Schmidt/Schneider, 2010). Analysis within the EIO confirm this value; the calculated material

saving potentials for five selected manufacturing sectors are €196,000 per company per year with only

low or no investments (EIO, forthcoming).

In 2009, the Association of German Engineers (VDI) established the Centre for Resource Efficiency (VDI

ZRE), which has since developed a number of very good advice and training services, aimed specifically

at small and medium enterprises. Based on the experiences gained through consulting services and

financial assistance, the VDI ZRE revealed an average material saving potential of about 20%. Hence,

the ZRE material efficiency programme aims at the reduction of risks (such as rising material prices),

rising competitiveness and security of company locations in Germany. Besides the above named

organisations, there are several other German efficiency agencies: The German Mineral Resource

EIO Country Brief: Germany 2011 13

Agency, the Agency for Renewable Resources, the Effizienznetz Rheinland-Pfalz, etc. To conclude, the

institutional set-up in respect of material and resource efficiency counselling can be considered good

compared to many other European countries (EEA 2011). The relatively new institutional setting of

resource efficiency agencies and research institutions can also be viewed as a radical innovation within

Europe.

PIUS-Check®

The PIUS-Check is a process-oriented material flow analysis of the efficiency

agency (EFA) North Rhine-Westphalia for the determination and use of

economic and ecological potential in production. The EFA has a team of 10-

20 engineers who conduct the initial audit in order to identify material and

resource efficiency potentials. External process experts are used to conduct

the technical audits and make suggestions for potential changes. The total

costs of an audit are EUR 10-15,000. Up to two-thirds of these costs can be

covered by the national clean production programme Verbesserung der Materialeffizienz (VerMat)

organised by Demea (Deutsche Materialeffizienz Agentur) under the Federal Ministry of Economics and

Technology. Since the PIUS-Check was initiated in year 2000, more than 500 PIUS-Checks have been

conducted. 216 of the companies involved have implemented measures (which corresponds to more

than 40%).

Information Source: http://www.pius-info.de/en/index.html

Picture source http://www.pius-info.de/en/index.html

The level of innovativeness varies considerably between sectors. The chemical and pharmaceutical

industry was the industry with the highest share of innovators in 2008 (83%), followed by electrical

engineering (79%), IT/telecommunications (78%), transport equipment (75%) and machinery and

equipment (68%) (ZEW, 2010). Innovations are most important in these sectors to stay competitive. It is

the supply industries (energy, mining, water, waste disposal, and recycling) that currently show rather

low innovation rates (between 34 and 37%) as well as other services such as wholesale, transport

services and business services (between 31 and 36%) (ZEW, 2010).

EIO Country Brief: Germany 2011 14

4 | New trends and emerging eco-innovation markets

In 2006, Germany launched a comprehensive national strategy, known as the High-Tech Strategy

(HTS), aiming to put Germany at the forefront of innovation and new markets. For the first time a

national strategy on innovation policy has been developed with the aim to give new impetus to a direct

implementation of research results into products, processes and services. New incentives for

cooperation between academia and industry were put in place and a more innovation-friendly

environment and a positive culture of innovation was created. After a Cabinet decision in 2010 to pursue

this successful approach, the German High-Tech strategy lays down the following technologies as future

key technologies: biotechnology and nanotechnology, micro- and nano-electronics, optical technologies,

microsystems, materials and production technology, the service research, space technology and

information and communication technology (High-Tech Strategie, 2010).

Today, the German government is investing more than ever in research and development. The annual

funding under the High-Tech Strategy is about €4b (Germany Trade & Invest, 2011).3 Targeted funding

for the 17 selected cutting-edge fields has now given new impetus to the transfer of ideas into practice.

Every eighteen months, the Federal Ministry of Education and Research (BMBF) selects one of the 17

cutting-edge research sectors as the core campaign of the High-Tech Strategy’s internationalisation

initiative. Following the “Nanotechnologies” and “Environmental Technologies” campaigns, the new

campaign on “Green Production Technologies” started in spring 2011 and will run until autumn 2012.

The following topics are in the focus of the Germany High-Tech Strategy: production technologies,

medical technologies, environmental technologies and nanotechnologies. Within the field environmental

technologies special focus is given to environmental protection, air pollution control, water conservation

and water resources management, waste management, soil conservation and the protection of limited

resources. Within the topic resource efficiency there are three major research projects running: “High-

Performance Building Materials made from Renewable Resources”, “Innovative lightweight components

and Saving Raw Materials” and “Reducing Pollution in the Production of Steel”4.

While the Masterplan Umwelttechnologien (Master Plan for environmental technologies) of 2008 mainly

refers to two lead markets, one for technologies to increase the resource productivity and one for the

circular economy (BMU/BMBF, 2008), the Federal Ministry for the Environment (2011) highlights

research support programmes for the so-called energy transition, renewable energies, -such as wind

and geothermal energy, photovoltaic, storage technologies-, and recently turns to the recycling of

phosphate (BMU, 2011b).

A survey of the Forschungszentrum Karlsuhe (on behalf of the German Environment Ministry) among

440 experts from different backgrounds shows that solutions for the increase in resource productivity

and recycling rank second after the climate protection (Forschungszentrum Karlsruhe, 2009). Given the

increasing scarcity and insecurities of supply of primary raw materials, the improvement of separation

processes, optimisation of material features of secondary raw materials recovered from waste, and the

preparation for higher-value uses and product design for recycling, are especially considered as

important fields for future technological development (Forschungszentrum Karlsruhe, 2009).

3 The total gross domestic expenditure on R&D (GERD) as a percentage of gross domestic product (GDP) was 2.63% in

2008 (Eco-innovation database, 2011). 4 See http://www.research-in-germany.de/main/research-areas/environmental-technology/68520/research-projects.html

EIO Country Brief: Germany 2011 15

The growth of the key market resource and material efficiency is partly driven by the increasing

importance of biotechnology. A volume of €95b in 2007 and a high world market share of 40% are also

resulting from biofuels, which are controversial in Germany at the same time because of the land use

conflicts associated with food and an assumed harmfulness for car engines. In October 2011, the

Federal Ministry for the Environment submitted the draft of a national resource efficiency programme.

The objective of the programme is to make the German industry less dependent on the use of new raw

materials and to reduce environmental pollution associated with the use of resources while aiming to

become the world leader in resource efficiency (BMU, 2011b).5

Bio-based materials

Bio-based products are considered as to having a large market potential which has not been fully

exploited yet (Federal Ministry of Education and Research, 2011). Bio-based polymers have been on the

markets for a about a decade but only recently the first standard polymers such polyethylene,

polypropylene, PVC or PET, but also high-performance polymers such as nylon or polyester are

increasingly being replaced by biomass. Here, the petrochemical plastics can be completely or partially

substituted by renewable bio based plastics. The raw materials usually used are sugar or starches,

partially recycled materials from the food processing and wood. A European study reveals that it is

technically feasible to replace up to 90% of the global plastics consumption by renewable raw materials

(Shen, Haufe and Patel, 2009).

There are more than 20 policy initiatives in Germany providing incentives for the production of bio-based

products in Germany. However, the measures address primarily R&D activities, and a comprehensive

policy support for market penetration is still missing (Wydra, 2011). According to a recent study, there is

a large scope of bio-based products, such as bio-chemicals, bio lubricants, biopolymers or bio-based

building materials, etc. that should achieve a good market acceptance in the future (Fraunhofer, 2010).

Liquid wood - ARBOFORM ®

Lignin is solid substance in wood emerging as by-product in

the pulp and paper production. There are many sources of

lignin. The paper industry produces around 60 million

tonnes a year. It is usually burned or processed into animal

feed and cement. In combination with resins, flax or other

natural fibres, lignin can form a mass that can be processed

like any other thermoplastic material.

In 2009, TECNARO produced 275 tonnes of Arboform and

a host of other biodegradable and renewable polymers. The

company has also succeeded in setting an attractive price

point. Regular plastics cost between €1 and €5 per kilogramme, while the price for Arboform starts at

€2.50 per kilogramme, a figure that is expected to drop as sales increase (European Patent Office,

2010).

Information Source: http://www.tecnaro.de/Tecnaro-Shop/index.htm?section=shop

Picture source: © Tecnaro GmbH

5 See press release, http://www.bmu.de/english/current_press_releases/pm/47870.php

EIO Country Brief: Germany 2011 16

Energy efficient housing – intelligent homes

An undisputed future trend in construction and housing is sustainable energy supply, comprising the use

of high efficiency heating technologies, the use of renewable energy sources and the minimisation of

energy consumption (IZT, 2011). In addition, the term intelligent living is used for technical procedures in

the private residential area, where devices are used that have additional functions. Others, not

necessarily synonymous terms used for intelligent living are "eHome", "Smart House", "Smart Home",

"Smart Living", and others.

Through the diversification of power generation and the increasing networking and remote control of

energy supply, the issue of smart metering -in order to measure and display energy consumption data-

is becoming increasingly important. The internal network in a smart home is an ideal condition of

modern apartments to react to current energy supply and prices and interactively optimise the energy

use without affecting the resident. Intelligent homes aim at an integration of electric household

appliances (stove, refrigerator, washing machines, etc.), multimedia devices (TVs, VCRs, tuners, a

central server, etc.), Internet and building services such as lighting, alarms, heating, etc.

Another ground-breaking example is the functional integration of energy and material savings in the

fields of buildings. Buildings are resource-intensive. Up to 40% of the total final energy consumption are

caused by the operation of buildings. New technologies can help to realise energy savings of up to 80%.

Future building materials and facade systems could be multi-functional: innovative glazing and thermal

insulation systems protect from heat and cold, absorb sound, produce and save solar energy and control

supply of daylight and fresh air at the same time. New technologies like adaptive facades, vacuum

insulated panels (VIP), phase change materials (PCM) and building-integrated photovoltaics (BIPV)

save costs, preserve resources and open up innovative fields in architectural design (Association for

Transparent Insulation - FVTWD e.V.). The functional and aesthetic building integration will play a major

role in the future.

The German Future Award 2011 (Deutscher Zukunftspreis 2011) went to organic electronics, organic

LED and organic PV developed at the Technical University Dresden, Europe’s leading cluster for green

photonics.

Multi-functional building facades

Multi-functional building materials and facade systems

include innovative glazing and thermal insulation systems

protect from heat and cold, absorb sound, produce and

save solar energy and control supply of daylight and fresh

air - all at the same time. The building envelope, i.e. facade

and roof, is of particular importance: It serves as interface

between the internal and external environment and thus

has major impact on material and thermal flows. Current

research aims at integrating various functions

constructionally and architecturally into the building

envelope without using more material due to increasing thickness. Both the energetic and material

optimisation of the building envelope as a functional and creative element is an ambitious aim.

Information Source: Association for Transparent Insulation (FVTWD e.V) - http://umwelt-

wand.de/ti/owner/ti-insulate.html

Picture Source: © gap-solar GmbH

EIO Country Brief: Germany 2011 17

Building materials

The mineral resources sector is the main supplier to the construction industry and the construction

sector is the largest industry in Europe. It therefore has a prominent economic importance. Based on the

absolute weight of the extracted and further processed amounts of sand, gravel, crushed rock and

limestone, the mineral resources-sector is the most resource-intensive sector.6 Life-cycle impacts of the

materials (cement and concrete production) and their applications (housing, CO2-emissions,

maintenance, etc.) further contribute to environmental pressures. Eco-innovation in the construction

sector may thus strongly impact on the overall environmental performance of a country.

In Germany, interesting material-saving developments can be observed in the field of building materials.

Cement, for example, forms the basis for building materials such as concrete and mortar and it is

indispensible for the entire construction and building industry because it keeps the components together.

The construction sector is globally most important. The world cement production induces 5% of the

global CO2 emissions, which is more than three times as much as the air traffic emissions (Geibler et al.,

2011). Green cement is a good practice example for a new and resource emission saving material. The

so-called slim slabs are an example of a new technology saving concrete and similarly using recycled

materials as a substitution. Finally, a widespread dissemination of building materials made from

renewable resources further contribute to lower environmental impacts of a prevalent high input of

resource intensive concrete and cement.

"Green cement", a new type of hydraulic binder

A new group of hydraulic binding agents, named

Celitement, seems to be a promising improvement of the

energy and environmental balances in the cement

production. Celitement is based on hydraulically active

calcium hydrosilicates, which needs less lime lime during

the production process and the burning temperature can

be reduced to 300°C (usually a temperatur of approx.

1450°C is needed). During the entire production process

up to 50 % of the required energy can be saved

compared to the production of conventional cement. In

addition. 50 percent of the emissions can be reduced

Information Source: www.celitement.de

Picture source: Wuppertal Institute

Slim slabs

The Cobiax Technologies GmbH of Darmstadt has

developed components that make reinforced concrete

slabs up to 35% lighter. The principle of the Cobiax flat

slab is to leave out as much concrete as possible whilst

maintaining the full flexural strength of the slab and

allowing a bi-axial load transfer. The Cobiax cage

modules are either directly built into the semi-precast

slab elements in the precast factory and delivered to site

as a whole or only placed on the semi-precast slab

6 This applies to the indicator of Total Material Requirement as well as for the direct material input, and the data from

Destatis to environmental economic accounts.

EIO Country Brief: Germany 2011 18

elements on the construction site. In both cases the top reinforcement can be directly laid on the

Cobiax cage modules which act as wire chairs. The hollow bodies are made of recycled plastic to

replace the heavy concrete inside a reinforced concrete ceiling. Thus less excavation is required. The

quality does not decrease: The flat slab has the same mechanical load bearing behaviour as a solid

flat plate slab. Up to 35% concrete and 20% steel can be saved with this technology.

Information Source: http://www.cobiax.ch/en/

Picture source: ©Cobiax

High-Performance Building Materials made from Renewable Resources

Researchers of the Dresden University of Technology, in

cooperation with HESS Wohnwerk, the Institute for Applied

Science in Civil Engineering (IaFB) and the GWT Dresden

set out to investigate, develop and construct high-

performance composite wood structures (HHT). Such

materials could become a sustainable alternative to similar

steel and reinforced concrete-based products, which are

currently predominant. Wood combined with plastics and

textiles - The idea is to improve the performance of wood

constructions by combining compressed wood with fibre-

reinforced plastics and technical textiles. This improves the wood structures in terms of stiffness,

strength, ductility and durability. The researchers hope to introduce these composite wood structures

in real-world applications and pave the way for a new image of wood in the construction industry.

Information Source: http://www.research-in-germany.de/research-areas/environmental-

technology/research-projects/11366/resource-rp-high-performance-building-materials.html

Picture source: : © Technische Universität Dresden

EIO Country Brief: Germany 2011 19

5 | Public policy in support of eco-innovation

In general, the policies in Germany can be characterised as mainly following an industry-oriented

approach by supporting eco-innovation in production processes, resulting in greater energy and

resource efficiency in the industry, and promoting the development and export of environmental-friendly

technologies. The assessment that eco-innovation can have both economic and environmental benefits

is undoubtedly increasing at political level. Even though there are policies supporting systemic

(transformative and radical) eco-innovations, the examples are still niche projects and their political and

economic assertiveness remains to be seen.

5.1 Key national strategies promoting eco-innovations

“ProgRess” is an ambitious new programme of the German Ministry for the Environment, Nature

Conservation and Nuclear Safety promoting the understanding of resource efficiency as a competitive

advantage. The draft has to be voted on in January 2012 within the Federal Government and is

expected to launched shortly (BMU, 2011a). Other ministries have also committed to the promotion of a

more efficient use of resources, including the Ministry of Economics and Technology, the Ministry of

Education and Research, the Ministry of Economic Cooperation and Development or the Ministry of

Food, Agriculture and Consumer Protection. Many key initiatives and national strategies are linked to

eco-innovation but there is no uniform definition of eco-innovation in the set of programmes, initiatives

and measures provided. The inherent usage of the term is mixed and usually refers to the contexts

described, frequently referring to different fields of innovation activities, such as energy efficiency,

resource efficiency, sustainable mobility, etc. However, the EIO definition of eco-innovation is included in

the measures mentioned below.

The German National Sustainable Development Strategy of 2002 frames the overarching vision of

sustainable development and introduces a wide range of indicators, quantitative targets and timetables.

It looks at innovation as a driving force for sustainability and sustainability as a driving force for

innovation. It also introduced new research and development programmes at that time such as

PROINNO (innovation partnerships for small and medium enterprises) and industrial joint research such

as ZUTECH (future technologies for SMEs), and InnoNet (support of innovative networks, phased out in

2008). The indicators report from the German Federal Statistical Office complements the progress

reports from the Federal Government to the German sustainable development strategy (2005, 2008).

First published in 2006, it was supposed to publish progress reports every two years. However, there

was no progress report in 2010, a new one is planned for 2012 (BMU, 2010a).

The National High-Tech Strategy was first released in 2006 and renewed in 2010 to support the

developments of innovative environmental technologies, products and lead markets by promoting

partnerships between enterprises and research institutes in order to bring together institutional research

and entrepreneurial expertise. It was set up as a strategy on innovation policy to systematically promote

research in various fields, such as health, climate change, use of natural resources and energy, mobility,

and cross-cutting technologies like nano- and bio-technology (Loewe and Schepelmann, 2010). For the

first time the High-Tech Strategy introduced new instruments such as the innovation alliances - strategic

long-term cooperation between industry and public research in key technology areas that require strong

funding.

EIO Country Brief: Germany 2011 20

Table 1: Examples of innovation alliances………………………………………………………………………..

Innovation alliance Funding volume

EENOVA innovation alliance for

automotive electronics

€100m Federal Government, €500m industrial funding

OLED initiative for energy-efficient

lighting

€100m Federal Government, €500m industrial funding

Organic Photovoltaics for the use of

renewable energy

€60m Federal Government, €300m industrial funding

LIB Lithium-ion Battery for the storage of

energy

€60m Federal Government, €360m industrial funding,

€15m from the Helmholtz Association

Source: European Commission 2009; http://www.research-in-germany.de, 2010-11-09

Another instrument is the cluster competitions where companies, scientific institutions and policy-makers

form clusters. The Federal Ministry of Education and Research (BMBF) launched the Leading Edge

Cluster Competition in 2007, as part of the High-Tech Strategy. Eco-innovation examples are the

Solarvalley Mitteldeutschland7 which is one of Europe’s leading centres of photovoltaic research and

development; or the EffizienzCluster LogistikRuhr8 The funding for the High-Tech Strategy in the years

2006 to 2009 within the 17 high-tech sectors were in total €11,940m out of which €420m for

environmental technologies and €420m for materials technologies (BMBF, 2010).

The Integrated Energy and Climate Package (2007) sees eco-innovation as playing an important role

in the integrated energy and climate protection to achieve the goal of 40% CO2 reduction by 2020. 29

fields of specific policy measures are addressed, such as market incentive programmes on renewable

energy and energy efficiency in buildings, CCS technologies, the reform of the vehicle taxes, energy

research and innovation, etc. The Climate Protection Initiative, the National Energy Efficiency Plan

(2008) and the Energy Policy Roadmap (2009) complement the package. In summer 2011, and as a

reaction to the Fukushima disaster, the German Government decided on the gradual phase-out of

nuclear power by 2022, greater energy efficiency and an accelerated switch to renewable energies. To

this end, the German government drew up a concrete programme of measures and a sound financing.

The central element is the expansion of wind energy, electricity grids, smart grids and storage facilities,

and the restructuring of fossil fuel power plants. The funding for energy-related modernisation of

buildings - the CO2 Building Rehabilitation Programme - will be increased to €1.5b per year for the

period 2012 to 2014 (2011: €936million). Additionally, depreciation options for the buildings sector will

be introduced9

Last but not least, the Master plan on Environmental Technology (2008) was set up to bundle

different policy measures in the field of research and innovation policy and environmental policy, such as

ecodesign, technology procurement, and market diffusion programmes for eco-innovation (Loewe and

Schepelmann, 2010). The target technologies of the Master plan are water technologies (e.g., Integrated

Water Resources Management - IWRM, German Water Partnership - GWP, Water Strategy Initiative

Office - IBWS), resource efficiency technologies and climate protection technologies. Finally, the

7 See www.solarvalley.org

8 See www.effizienzcluster.de

9 See www.bmu.de/english/transformation_of_the_energy_system/resolutions_and_measures/doc/48054.php

EIO Country Brief: Germany 2011 21

German ETAP roadmap is a compilation of the main programmes and initiatives concerning

environmental technologies and, as such, it does not introduce any special or new programmes as

regards eco-innovation (BMBF, 2004, BMU, 2008).

5.2 Most relevant national measures supporting eco-innovations including regulatory and market based instruments promoting eco-innovation and application

The institutional public support provided in Germany does not only finance individual research projects,

but also research institutions. There are four major associations, the Helmholtz Association (16 research

centres and an annual budget of around €3b), the Max-Planck-Gesellschaft (80 research institutions and

approx. €1.3b), Leibnitz-Gemeinschaft (86 institutions and ca. €1.3b) and the Fraunhofer Institutes (one

of those called the Fraunhofer Institute for Systems and Innovation Research ISI) which cover a large

spectrum of basic and applied research. This sort of public funding does not target specific technology

tracks but it aims at capacity building in various research fields (FFU, 2010). In addition, further public

cross-institutional and cross-research fields are funded.

As regards eco-innovation, the Ministry for the Environment does not have a very strong role in the

strategic programming of institutional research support (FFU, 2010); however, it supports large-scale

projects on R&D, especially on climate and energy as a result of the ETS revenues and it has supported

collaborative research on material efficiency. The German Federal Environmental Foundation –

comparatively very strong– supports the development and use of new environmentally friendly

technologies and products especially at the level of companies (SMEs) in order to push a preventive

integrated environmental protection and strengthen the environmental awareness of people through

measures of environmental education aiming at behavioural change, especially by taking into account

small and medium enterprises. The focus is the promotion of environmental pioneers with innovative

ideas.

The Environmental Innovation Programme, first introduced in 1979 by the Federal Ministry for the

Environment, calls for innovative plants, process technologies and products which significantly reduce

environmental pollution such as emissions, waste, waste water and noise and contribute to the

advancement of technologies and technical environmental specifications. Over 700 pilot projects have

been carried out. The current focus of the programme is on energy efficient information technologies,

energy efficient waste water facilities and – as a nationwide competition – energy efficient street

lighting.10

The Central Innovation Programme (ZIM) of the Federal Ministry of Economics and Technology

(BMWi) is a nationwide funding programme not limited to certain sectors or research themes, and

geared to SMEs and research institutions working closely with industry. Since 2008, over 9,500

innovative projects have been supported with some €1.2b funding. Funding is provided to cooperation

projects (projects between SMEs or SMEs and public or private non-profit research institutions), network

projects (external management and organisation services in order to develop market-oriented networks

of innovative SMEs) and individual projects (Fraunhofer, 2010).

International partnerships for sustainable climate protection and environmental technologies

and services (CLIENT) support international collaborative projects to develop and implement specific

applications of appropriate environmental technologies, including prototypes or pilots to partner

countries. The main focus is on technologies and service innovations for sustainable development in the

10

See www.bmu.de/foerderprogramme/pilotprojekte_inland/doc/2330.php (in German only)

EIO Country Brief: Germany 2011 22

areas of climate, resource use, land and water management. Co-operations with partners in Brazil,

Russia, India, China, South Africa and Vietnam are favoured.

The German Material Efficiency Agency was established in 2006. The German material efficiency

prize is annually awarded by the Federal Ministry of Economics and Technology (BMWi) for best

practice solutions to increase the material efficiency; and finally, the German material efficiency

programme of the Federal Government provides market incentives by giving financial support for

manufacturing firms to increase their material efficiency. Under the topic “Resources and Sustainability”,

the Research for Sustainable Development Programme of the Federal Ministry of Education and

Research (2010) has four priorities for funding including sustainable water management, sustainable

land management, and CLIENT international partnerships (see above), and innovative technologies for

resource efficiency. The latter includes programmes such as “Innovative Technologies for Resource

Efficiency – Resource-Intensive Production Processes” (called r2 programme) and “Innovative

Technologies for Resource Efficiency – Strategic Metals and Minerals” (called r³ programme), but also

“Innovations as a key for sustainability in the economy” which supports innovative projects in business.

r² - Innovative technologies for resource efficiency - resource efficient production processes is a

support programme that was first announced in 2008 focusing on resource intensive sectors with a high

input of primary materials such as minerals and metals or the production of chemicals. The funding

programme supports science and industry to jointly develop and test innovative technologies and

practices. Aim is the optimisation along the whole process chain. Currently 17 collaborative projects

between industry and science are being funded with around €30m. The Federal Ministry of Education

and Research has an additional support strategy for SMEs (KMU-innovativ - Ressourcen- und

Energieeffizienz). As part of the SME innovative programme, research projects in the technology fields

that have special priority for Germany biotechnology, nanotechnology, information and communication

technology, production technology, technologies for resource and energy efficiency, and optical

technologies are funded.

The project WING (Materials innovation for industry and society) of the Federal Ministry of

Education and Research aims to strengthen technologies for sustainable development. The WING

programme is embedded in the interdepartmental High-Tech strategy for Germany. Ten fields address

the important materials-based sectors of the German industry (i.e. automotive, mechanical engineering,

energy technology, chemical products, plastics and rubber products, metal production and processing,

electrical, electronic products, aerospace, life sciences/medical technology). A great leverage effect

within the material relevant industry sectors is confirmed in an interim auditing study (VDI/BAM, 2011).

According to an analysis of the ETAP roadmaps provided by WIFO in 2009, the German policy portfolio

is strongly focused on the supply side of technologies, with an emphasis on R&D programmes and the

demonstration and commercialisation of the technologies (WIFO, 2009). Few demand side instruments

are applied, such as support for networks, partnerships, information services but also the very

successful Renewable Energies Law. The technological focus is on renewable energies.

EIO Country Brief: Germany 2011 23

Figure 5.1 Policy measures addressing eco-innovations in Germany

Group of policy

measures Type of policy measure

Focus of policy measures (tick if applies)

Generic focus on

eco-innovation

Resource efficiency improve

ment

Energy efficiency improve

ment

Reduction of

emissions incl. CO2

Other relevant

areas (e.g. renewable

energy, etc)

SUP

PLY

SID

E FO

CU

S

Equity/business support

Venture capita funds X X X

Public guarantee funds X

Support for R&D in public sector and

industry

R&D funding X X X X X

Collaborative grants X X X X X

R&D infrastructure X X X

Fiscal measures Tax incentives for R&D and start-ups

Tax incentives for R&D personnel

Education, training and mobility

Tailored training courses for companies, entrepreneurs

X

Advise/consulting for start ups, companies, entrepreneurs

X X X X X

Placement schemes for students

Support for R&D workers recruitments

Networks and partnerships

Competence centres, clusters, science-technology parks

X X X X

Technology platforms and innovation networks

X X

Foresight and common vision building X

Market intelligence and other forms of information sharing

X X

DEM

AN

D S

IDE

FOC

US

Regulations and standards

Regulations, targets, cap & trade schemes X X

Performance standards, labelling, certification

X

Public procurement

“Green“ public procurement of goods and services

X

R&D procurement

Pre-commercial procurement

Technology Transfer

Advisory support for technology adopters X X

Financial or fiscal support for technology adopters

(e.g. grants for purchasing new technology) X X X X

Support of private demand

Tax incentives for consumers (e.g. for purchasing environmentally efficient

products) X X

Tax reductions for products and services (e.g. VAT reductions)

Demand subsidies (e.g. eco-vouchers, consumer subsidies)

X

Awareness raising and information provision

A new innovation platform was launched in 2010 for various key figures from business and science: the

“Efficiency Factory” brings together 200 project partners from a total of 31 joint projects, financed by

up to €50m by the Federal Ministry of Education and Research (BMBF) for four years. The German

Engineering Federation (VDMA) will be in overall charge, with input regarding content coming from the

Karlsruhe-based Fraunhofer Institute for Systems and Innovations Research (BMBF, 2011). Five

innovation fields are considered most important: manufacturing technology and process engineering,

scientific evaluation and simulation of manufacturing technology and process engineering, the efficient

production plant, manufacturing-related products, and functional surfaces (BMBF, 2011).

EIO Country Brief: Germany 2011 24

6 | Main findings

A major obstacle for eco-innovation in Germany is a lack of policy coherence. Since eco-innovation and

resource efficiency goals require a medium to long-term orientation, they frequently conflict with

legislative periods. Thus, changing coalition governments in Germany slow down the process because

time and legitimacy questions are raised on whether policy should intervene in the market for

environmental purposes and to what extent. So relatively well-established instruments may lose their

impact because they are softened in the wake of changing coalition governments. A consensus on

whether environmental innovation needs support is not yet fully established and industry lobby aiming to

avoid additional costs is strong. A strategic approach with long-term targets, comprehensive incentives

and roadmaps is largely missing.

Awareness gaps and information deficits must be stated for action levels, e.g. political actors, subsidiary

and intermediate institutions, economic actors, i.e. manufacturers, enterprises using intermediate

products, industrial associations, and consumers. Despite a high environmental awareness there is a

gap between attitudes and behaviour (BMU, 2010b). Many eco labels cannot eliminate a lack of market

transparency, especially regarding social and environmental standards of upstream foreign suppliers

and international companies. The range of products is large, the competition is severe and many prices

are too low, i.e. they do not internalise external costs. Green public procurement in Germany is rather

weak. There is no national scheme (but federal schemes) and it ranks last compared to the other

European countries, a rate 30% of total public procurement (in 2008) does not support the overall eco-

innovation performance (Eco-innovation database, 2011).

However, despite informational and demand-side barriers, Germany can be counted among the eco-

innovation leaders with a good performance above the EU27 average. While the regulatory and policy

framework (legal system, standards and norms, IPR law, fiscal policies, public procurement, etc.) and

infrastructures can be assessed as medium to high, the lack of enduring policy integration hampers the

pace of progress and a long-term strategy with binding targets, incentives and roadmaps that addresses

all actors along key areas will have to move upwards on the agenda for eco-innovation. While climate

and energy related eco-innovation seems far advanced, the new agenda of resource efficiency deserves

more attention. In particular the linkages of programmes like “ProgRess” (German Programme on

Resource Efficiency) and the High-tech Strategy have to be strengthened with regard to demand side

measures. The German innovation landscape is technology and supply side oriented. There is no

overarching strategy aiming for substantial improvements in resource-intensive areas such as food or

mobility. With respect of environmental taxes as a demand side instrument, Germany ranks at the

bottom of the scale with 5.7% in 2009 (2.2% of GDP in 2008) (Eco-innovation database, 2011).

6.1 Strengths and weaknesses of eco-innovation in Germany

The progress of eco-innovation activities in Germany is based on a number of strengths but also

underlies a number of weaknesses. The Eco-innovation scoreboard reveals a widespread and well-

linked research infrastructure and a high number of highly qualified personnel. Germany is an attractive

business location with high export potentials because of a strong manufacturing sector, also in high-

tech. This leads to a dense pool of high-tech enterprises with a high potential of knowledge

accumulation. The country offers a large range of innovation-oriented institutes and other associations

that help to push the German economy to a more energy and resource efficient economy as well as

EIO Country Brief: Germany 2011 25

SMEs in the fields of cleantech, waste management and technologies for renewable energies (European

Commission / DG Research, 2009).

However, there are relevant weaknesses for the development of the German eco-innovation

performance. Most strikingly, consumer oriented measures are rare compared with the strong focus on

the supply side oriented initiatives. Second, the research and funding landscape is partly fragmented

(due to federal structures) and focuses too strongly on research excellence compared to teaching and

technology transfer (European Commission, 2009). In addition, the German economy is highly

dependent on resource-intensive non eco-industries, such as the automotive industry. The Eco-

innovation scoreboard reveals weaknesses associated with socio economic outcomes (exports of

products from eco-industries, employment in eco-industries and turnover in eco-industries), which is the

only component where Germany scores below the EU27 average.

Figure 6.1 Strengths and Weaknesses of Germany in the promotion of eco-innovations

Strengths Weaknesses

- Highly qualified personnel

- Strong research infrastructure

- Attractive business location, strong export sector

- Medium-high and high-tech manufacturing

- Patenting

- Innovative SMEs (cleantech, renewables, waste

management)

- Fragmented research and funding landscape; focus on

research excellence

- Federal structures in some policy fields and subsequent

policy incoherence (e.g. in the mobility field) hindering

substantial progress

- Strong focus on supply side oriented measures and

initiatives

- Strong economic dependence on non eco-industry, such as

automotive and freight traffic

6.2 Opportunities and threats to eco-innovation in Germany

The current German situation leads to immense opportunities but also to considerable threats to eco-

innovation. The growing awareness of the society raises the demand for sustainable products and

services. In interaction with the limited availability of important natural resources, in particular energy

resources and metals, demand for renewable resources and sustainable material substitution will

increase. Furthermore, the above-discussed supply side oriented policy focus offers still untouched

potentials with respect to the consumer and demand perspectives.

On the other hand the above-mentioned limited availability of important natural resources might hinder

the positive development of eco-innovations in Germany. Critical resources (such as rare earths

elements) are, for example, crucial for the production of various technologies in the field of renewable

energies. The complex distribution of legislative power in Germany (municipal, state and federal level),

with partly clashing interests might complicate the conditions for eco-innovations and dissemination

activities.

EIO Country Brief: Germany 2011 26

Figure 6.2 Opportunities and Threats for eco-innovations in Germany

Opportunities Threats

- Limited resources increases demand for renewable

resources and material substitution

- Growing awareness in society fosters demand for

sustainable products and services

- Development of demand side measures, e.g. green

public procurement

- Orientation towards non-sustainable areas of needs

(such as mobility, food)

- Supply shortages of non-energy minerals, e.g. critical

metals for high-tech applications

- Economic and financial constraints (financial crisis)

complicate the conditions for eco-innovation

EIO Country Brief: Germany 2011 27

References

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Subventionen, Expertise im Auftrag der Abteilung Wirtschaftsund Sozialpolitik der Friedrich-Ebert-

Stiftung, Berlin.

BMBF, 2010, Germany’s Leading-Edge Clusters, Bonn; Berlin, URL:

http://www.bmbf.de/pub/deutschlands_spitzencluster_de_en.pdf

BMBF (Bundesministerium für Bildung und Forschung), 2010, Ideen – Innovation – Wachstum,

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2012.

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der erneuerbaren Energien, Berlin

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BMU (Bundesministerium für Umwelt, Naturschutz und Reaktorsicherheit), 2010a, Bericht zur

Umweltpolitik des Bundes an die 75. Umweltministerkonferenz, Zeitraum: Juli 2009 bis Juli 2010, Berlin

BMU, 2010b, Umweltbewusstsein in Deutschland 2010: Ergebnisse einer repra sentativen

Bevo lkerungsumfrage, Berlin

BMU, 2009, GreenTech made in Germany 2.0 – Umwelttechnologie-Atlas fu r Deutschland, München

BMU, 2008, Germany’s ETAP Roadmap Speeding up innovation – protecting the environment, A

presentation of selected measures in Germany for stimulating technologies for sustainable development

in line with the objectives of the European Environmental Technologies Action Plan – ETAP COM(2004)

38 final

BMU/BMBF (Federal Ministry for the Environment, Nature Conservation and Nuclear Safety and

Federal Ministry of Education and Research), 2008, Masterplan Umwelttechnologien, Berlin.

BMU/UBA, 2011, Umweltwirtschaftsbericht 2011 Daten und Fakten fu r Deutschland, Berlin.

BMU/UBA, 2009a, Produktionsstruktur und internationale Wettbewerbsposition der deutschen

Umweltschutzwirtschaft, Berlin.

BMU/UBA, 2009b, Umweltwirtschaftsbericht 2009, Dessau-Roßlau.

Destatis, 2011, Forschung und Entwicklung: Ausgaben für Forschung und Entwicklung nach Sektoren -

Mill. EUR

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ngKultur/ForschungEntwicklung/Tabellen/Content75/ForschungEntwicklungSektoren,templateId=render

Print.psml

EIO Country Brief: Germany 2011 28

EEA (European Environment Agency), 2011, 2011 Survey of resource efficiency policies in EEA

member and cooperating countries, Country profile: Germany, Country information on resource

efficiency policies, instruments, objectives, targets and indicators, institutional setup and information

needs, Copenhagen

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EIO, forthcoming, Closing the eco-innovation gap: An economic opportunity for the business; Annual

Report 2011, Brussels, Technopolis et al.

EIO 2011, The Eco-innovation scoreboard, October 2011, http://www.eco-

innovation.eu/index.php?option=com_content&view=article&id=2&Itemid=34

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enlarged EU http://ec.europa.eu/environment/enveco/eco_industry/pdf/ecoindustry2006.pdf.

European Commission / DG Enterprise, 2009, INNO-Policy TrendChart – Innovation Policy Progress

Report Germany 2009, Brussels

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=1 (accessed 8.12.11)

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ntent75/Eckwertetabelle,templateId=renderPrint.psml

Federal Environment Agency, 2009, Data on the Environment, Edition 2009, Dessau-Roßlau.

Federal Minstry for the Environment, Nature Conservation and Nuclear Safety, 2010, Export

Initiative Recycling and Efficiency Technologies, Berlin.

Federal Ministry of Education and Research, 2011, National Research Strategy BioEconomy 2030 -

Our Route towards a biobased economy, Berlin.

Federal Ministry of Education and Research, 2010, Research for Sustainable Development

Framework Programme of the German Federal Ministry of Education and Research (BMBF), Berlin.

Federal Ministry of Education and Research, 2010, Ideen. Innovation. Wachstum, Hightech-Strategie

2020 für Deutschland, Bonn/Berlin.

Federal Statistical Office, 2009, Labour market: Some nine million wishing to work (more),

STATmagazin,

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azin/2010/LabourMarket2010__06,templateId=renderPrint.psml__nnn=true

FFU (Forschungsstelle für Umweltpolitik), 2010, Ländervergleichende Analyse industriepolitischer

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EIO Country Brief: Germany 2011 29

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umwelt.de/umweltdaten/public/theme.do?nodeIdent=2663, assessed 12 January 2012

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EIO Country Brief: Germany 2011 30

ANNEX 1. Policy measures addressing eco-innovations in Germany

Group of policy

measures Type of policy measure

Specific measure Please provide reference to or brief summary of specific measures (national,

regional) add cells if necessary

Focus of policy measure (tick if relevant)

Generic focus on

eco-innovation

Resource efficiency improve

ment

Energy efficiency improve

ment

Reduction of emissions incl. CO2

Other relevant

areas (e.g. renewable

energy, etc)

SUP

PLY

SID

E FO

CU

S

Equity/business support

Venture capital funds

Business Angels Network Deutschland e.V. (BAND) is responsible for the development of the Business Angels culture in Germany, organizing the exchange of experiences and supporting cooperation among business angels.

there are several specific private funds (http://www.bvkap.de/media/file/292.rz_broschuere_cleantech_web.pdf )

X X X

Public guarantee funds

HighTechGründerfonds, http://www.high-tech-gruenderfonds.de/ X

The “Mikrokreditfonds Deutschland” was established in 2009 as a guarantee fund and sponsors mainly SME; among others start ups which developed eco-innovations benefit.

Support for R&D in public sector

and industry

R&D funding

National High-Tech Strategy 2020: 5 demand areas, 8 key technologies, 11 future projects

x x x x x

Collaborative grants

KMU Innovativ / Ressourcen-und Energie-Effizienz, http://www.hightech-strategie.de/de/439.php; R2: http://www.r-zwei-innovation.de/en/index.php, R3 <http://www.r-zwei-innovation.de/en/index.php,%20R3> : http://www.bmbf.de/foerderungen/15444.php

X X X X X

R&D infrastructure

The funding program “IT goes green” supports technology based eco-innovations associated with resource and energy efficient computer technology and the information and communication infrastructure.

X X x

The expansion of wastewater systems is subsidised by “Förderung von Abwasseranlagen”. Expenditures for such systems will be subsidised up to 60 %, depending on various factors.

Fiscal measures

Tax incentives for R&D and start-ups

Tax incentives for R&D

EIO Country Brief: Germany 2011 31

personnel

Education, training and

mobility

Tailored training courses for companies, entrepreneurs

The funding program “Umweltbildung, -erziehung und -information” finances measures for environmental education, such as seminars, congresses and workshops in enterprises, etc.

Advise/consulting for start ups, companies, entrepreneurs

The funding program “Informations- und Schulungsveranstaltungen sowie Workshops” of the Federal Office of Economics and Export Control supports training events, workshops, etc. for start ups. Among others events regarding environmental protection are to be financed / subsidised.

The German Material Efficiency Agency (demea) provides consulting regarding the possible efficiency potentials in manufacturing enterprises

X

The Efficiency Agency NRW (EFA) offers the PIUS check (product integrated protection of the environment). In this context consultants analyse the relevant material and energy flows of enterprises and reveal possible saving potentials, such as the reduction of various inputs, a cut of production costs, increase of quality and possible emission abatement measures.

X X X

Placement schemes for students

Support for R&D workers recruitments

Deutsche Gesellschaftschaft für Internationale Zusammenarbeit (GIZ) in the areas resource efficiency, recycling, decentralisation of the natural resource management, waste management, resource efficient economy, sustainable tourism

X

Investitionsbank Berlin provide companies with the personal grants for recruitment of innovation assistants (generic innovation fields) http://www.ibb.de/desktopdefault.aspx/tabid-26/

Networks and partnerships

Competence centres, clusters, science-technology

parks

The “Umweltcluster Bayern” in an initiative which facilitates the collaboration between the actors of environmental industry and science in Bavaria.

X X X X

The “Cluster Umwelttechnologie NRW” aims to improve North Rhine-Westphalia’s position in the GreenTech industry.

X X X X

In order to pool the knowledge of the efficient use of resources the German Environment Ministry established the national “Resource Efficiency Network”

X

Technology platforms and innovation networks

Germany’ information platform for the procurement of ICT products (www.itk-beschaffung.de) will be expanded to include information on the latest energy

X X

EIO Country Brief: Germany 2011 32

efficiency and environmental standards.

Foresight and common vision building

The ETAP Roadmap on energy policy (2009) provides information on future energy demand and production. Furthermore, the “Environmental Outlook to 2030” offers insights into Germany’s economical and ecological future.

X

Market intelligence and other forms of information

sharing

The information centre “Informationszentrum Energie” is administered by the Ministry of the Environment, Climate Protection and the Energy Sector and offers counselling and information on renewable energy and efficient energy use.

X X

DEM

AN

D S

IDE

FOC

US

Regulations and standards

Regulations, targets, cap & trade schemes

Erneuerbare Energien Gesetz (Renewable Energies Law) – a fixed compensation for the feed-in of renewable energies (feed-in tariffs) for 15-20 years Biokraftstoffquotengesetz: regulating the blending of biofuels into the fuel for motor vehicles Erneuerbare-Energien-Wärmegesetz: aims to advance renewable energies for heating and cooling systems in buildings

X X X

X X X

Performance standards, labelling, certification

The “Saarländisches Umweltmanagement-Förderprogramm” assists the integration of the EMAS-System. Goal is an increase of EMAS-certified enterprises in order to tackle the sustainable resource-management issue.

The national eco-label scheme “Blue Angel” allows the identification of eco-friendly products (many sectorial eco-labels are in place, such as Naturkind, Bio, Bioland, Demeter, Hess Natur, Öko-Tex, etc. Altogether 67.

X

Public procurement

“Green“ public procurement of goods and services

The German Environmental Agency (UBA) offers the latest information on green public procurement. The existing law concerns only federal administration and only wooden products.

X

Associated with the action plan “Germany: Green IT Pioneer” green public procurement plays an important part in “Using ICT in an energy- and resource-efficient manner”.

R&D procurement

EIO Country Brief: Germany 2011 33

Pre-commercial procurement

Technology Transfer

Advisory support for technology adopters

The KfW bank programme “Energy efficiency advice for SMEs” advises to find possible saving potentials. The program “Energieeffizienzberatung” takes over a part of the consulting fees and helps to overcome bureaucratic barriers.

X

Potential analyses of the German Material Efficiency Agency (demea) are financed by vouchers; these vouchers cover 50 % of the total counselling costs.

X

Financial or fiscal support for technology adopters

(e.g. grants for purchasing new technology)

BMU-Umweltinnovationsprogramm supports primarily SME investing in processes for the abatement of any environmental damage. Therefore the KfW-Bank provides credits at reduced rates of interests.

X

Wirtschaftsforschung und Technologietransfer Schleswig-Holstein GmbH (WTSH) provides grants for future oriented eco-innovations, which reduce material and/or material use within enterprises.

X

The funding program “Heizen und Wärmenetze mit regenerativen Energien” (EFRE) supports the utilisation of renewable energies associated with the efficient use and production of heat.

X X X

Support of private demand

Tax incentives for consumers (e.g. for purchasing

environmentally efficient products)

The “Regierungsprogramm Elektromobilität” ensures a car tax exemption for 10 years for e-car owners.

X X

The integration of a particulate filter (soot particle filter) entails tax reliefs for car owners.

X

Tax reductions for products and services (e.g. VAT

reductions)

§ 2 of the German energy taxation law gives information on possible tax reliefs of various biofuels.

Demand subsidies (e.g. eco-vouchers, consumer

subsidies)

The German government subsidised the purchase of particulate filters for diesel-engine cars (bonus of €330).

GreenConServe vouchers scheme providing access to technical and business support to service innovator in the construction industry

X

Scrap bonus: government subsidy of €2,500,, when an old car was scrapped and new car was bought.

Awareness raising and information provision

There exist various funding programmes raising the awareness of environmental issues (BMU-Umweltinnovationsprogramm, the above mentioned funding programmes on training, workshops, etc.).

EIO Country Profile: Germany 34

About the

Eco-Innovation

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