Study: Germany needs €6 trillion in investment to meet climate goals

Germany will need to invest around €6 trillion ($6.7 trillion) over the next two decades to transition to a climate-friendly economy, according to a study commissioned by state development bank KfW.

The estimate, calculated by the Prognos research institute on behalf of KfW, means current investment levels would have to more than double.

Consumers and businesses would have to shoulder most of the costs, with the government accounting for just 12% of the total.

However, the study released on Monday estimated that only half of the €6 trillion would represent additional investment for the transition to a climate-friendly economy. In other words, about €3 trillion would have to be invested even if Germany stuck with existing coal, oil and gas technologies.

The study covers the period from 2025 to 2045, with 2024 being the most recent year for which reliable investment figures were available.

Germany has set a legally binding target of achieving climate neutrality by 2045, meaning it must not emit more greenhouse gases than can be absorbed or stored.

The researchers identified the transport sector as requiring by far the largest investment, particularly in the transition to electric vehicles.

Significant spending will also be needed in the energy sector to adapt the electricity grid to power generated from renewable sources such as wind and solar energy.