The governments of Germany and Korea can set the right regulatory conditions and incentives to leverage the maximum amount of private investment into clean energy, German Ambassador to Korea Michael Reiffenstuel said at a Thursday webinar titled “KR-DE Road to 2050: Financing Clean Energy Transition.” 

The event was co-hosted by the Embassy of Germany in Korea, Solutions for Our Climate, Climate Transparency and Rep. Lee So-young of the ruling Democratic Party of Korea.

According to Reiffenstuel, Germany aims to be carbon neutral by 2045 with ambitious medium-term climate targets and the goal of cutting emissions by 65 percent by 2030. In comparison, the EU‘s target is to reduce emissions by 55 percent by the same year.

He said Germany recently tightened its Climate Change Act to not unfairly burden the younger generation after 2030.

Reiffenstuel emphasized the urgent need to achieve net zero by midcentury or earlier to safeguard livelihoods all over the globe and ensure the future of economies ahead of the UN Climate Summit COP26 in Glasgow, Scotland, later this month.

During the webinar, representatives of government, civil society and industry from Germany and Korea discussed the next steps needed to shift finance away from fossil fuels and toward a clean energy transition amid South Korea and Germany’s carbon neutrality pledges and IEA warnings to stop new fossil fuel financing to reach net-zero emissions.

At the event, Lee underlined the National Assembly’s legislation of a target of net zero by 2050 through the “Carbon Neutrality Green Growth Act” that set the legal foundation for a transition away from fossil fuel to sustainable energy.

Lee said Germany is a model partner for Korea on issues of clean energy transition and carbon neutrality.

“Many incidents seem to be happening in Korea on the carbon neutrality front, however, still many milestones are yet to be achieved,” she added.

Korea became the 14th country in the world to legislate a carbon neutrality act after the National Assembly passed the related bill last month.

Korean legislation aims to cut down harmful emissions in 2030 by 35 percent or more from 2018 levels.

The German ambassador welcomed President Moon Jae-in’s announcement to end international public coal financing as another milestone after the Korean government’s commitment to become carbon neutral by 2050.

He applauded President Moon’s pledge to an ambitious revised climate goal 2030 in line with net zero and hoped Korea’s national contribution goes beyond the 40 percent threshold that would bring not only Korea, but the world closer to the Paris climate goals.

Reiffenstuel reaffirmed that transformation of the energy sector, away from coal, oil and gas, brings with it challenges, but the benefits far outweigh the risks.

“Cheaper, cleaner and smarter alternatives already exist,” the ambassador pointed out.

“Fifty percent of electricity comes from renewables in Germany. According to the provisional Korean Carbon Neutrality 2050 scenario, a rapid increase in renewables here in Korea too, is expected. We will need to see the financial sector transitioning to clean energy solutions,” Reiffenstuel said, citing the contribution of renewables in Germany.

According to the German envoy, Europe will become the first carbon neutral continent by 2050, and the new EU taxonomy will facilitate sustainable investment decisions to achieve the goal. He was referring to the EU Taxonomy Climate Delegated Act that sets technical criteria for defining activities that contribute substantially to climate change mitigation and adaptation.

“European Investment Bank is no longer financing fossil fuels, including gas,” he added.

Reiffenstuel suggested export finance as a potential instrument to channel clean transition technology.

“As industrialized, export-oriented nations with a focus on manufacturing, both Korea and Germany have an interest in sustainable and affordable energy supply, the two countries cooperated in this area, inter alia through energy partnership, and now are working on a G-20 sustainable finance road map in order to better coordinate policy action worldwide,” he concluded.