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Professor Schwab,
dear Klaus,

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ladies and gentlemen,

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What a difference a year makes!

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When I spoke to you last year
around this time,

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our discussions revolved around the
global economy’s path out of the pandemic.

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At the start of 2022,

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many people were expecting a boom–
or at least a substantial boost

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for our economies’ transition
toward climate neutrality.

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Then came February 24.

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Since then,

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Russia has been waging an
imperialist war of aggression,

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here on our doorstep in Europe.

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With dreadful consequences,

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that Ukrainians are
bearing more than anyone.

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Just today the Secretary of the
Interior and 15 other victims

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were killed in a
tragic helicopter crash.

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We are with their families.

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But the war is also having
an impact on all of us.

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For a while, energy prices
jumped to levels higher

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than we had ever seen before.

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Around the world,

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production costs and
consumer prices exploded.

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Many people fear that coal and oil will make
a lasting comeback all across the world.

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If that were to happen,

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the 1.5 degree target
would become meaningless.

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Our supply chains must be adapted
to new geopolitical realities –

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realities that you called a “messy patchwork
of powers” in your speech yesterday, Klaus.

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And over all of this hangs
a sword of Damocles:

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the danger of a new
fragmentation of the world,

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of deglobalization
and decoupling.

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And yet,
ladies and gentlemen,

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this is just one part of
the story of last year,

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just one part of the reality that
we are looking at here in Davos.

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The other part
of the story is this:

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Russia has already failed completely
in reaching its imperialist goals.

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Ukraine is
defending itself with great success

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and impressive courage.

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A broad international alliance – led
by the G7– is providing the country

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with financial, economic,
humanitarian, and military support.

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Germany alone made available
over 12 billion euro last year.

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And we will continue to support
Ukraine – for as long as necessary.

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In Berlin at the end of October,

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we worked with international
experts to draw up a Marshall Plan

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for the long-term
reconstruction of Ukraine.

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A platform of major donors is
coordinating the process and

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– in consultation with Ukraine –
ensuring that it is well implemented.

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Private-sector capital
will play a key role here.

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I know that many companies in
Germany and beyond are very aware

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of the opportunities that a Ukrainian
economic miracle could offer to them.

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Particularly as the country
moves toward the European Union

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after the end of the war.

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But in order for the war to end,
Russia’s aggression must fail.

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That is why we are continuously supplying
Ukraine with large quantities of arms,

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in close consultation
with our partners.

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This includes air defense systems
like IRIS-T or Patriot, artillery,

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and armored infantry
fighting vehicles,

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marking a profound turning point
in German foreign and security policy.

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And there’s another
part to the story of last year:

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Within a few months,

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Germany made itself completely
independent from Russian gas,

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Russian oil,
and Russian coal.

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We concluded new
partnerships– in Asia, Africa,

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and America– thus
lessening our dependence.

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And so, I can say that our energy
supply for this winter is secure

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– thanks to well-filled
storage facilities,

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thanks to improved
energy efficiency,

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thanks to remarkable
solidarity within Europe,

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and thanks to the
readiness of our companies

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and of millions of
citizens to save energy.

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As a result, energy prices
have recently seen a huge drop.

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Our measures to reduce the burden
on private citizens, companies,

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and businesses are working.

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Inflation is falling
slowly – thanks, incidentally,

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also to resolute moves
by the central banks.

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Industrial production in Germany
has remained stable

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over the past few months,
against all the odds.

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Our employment rate is at record levels
and has recently increased even further.

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Most importantly, our transformation
toward a climate-neutral economy–

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the fundamental task of our century – is
currently taking on an entirely new dynamic.

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Not in spite of,
but because of the Russian war

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and the resulting pressure on us
Europeans to change.

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Whether you are a business
leader or a climate activist,

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a security policy specialist or an
investor– it is now crystal-clear

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to each and every one of us that the
future belongs solely to renewables.

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For cost reasons,
for environmental reasons,

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for security reasons,
and because in the long run,

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renewables promise
the best returns!

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So: Yes, the past year brought
fundamental change for Germany and Europe.

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But Germany itself has
fundamentally changed as well!

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We are resolutely pushing forward with
the decarbonization of our industry.

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We want to be
climate-neutral by 2045.

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And at the same time,

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we will remain a country with
a strong manufacturing sector.

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And despite all the difficulties
this past year showed us:

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we can and we
will succeed in that.

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In less than seven months,

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we built up an entirely new import
infrastructure for LNG in Wilhelmshaven.

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In the future it
can also be used for hydrogen.

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Just last Saturday, I opened our second LNG
terminal within just a few weeks, in Lubmin.

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The day after tomorrow another
terminal-ship is expected to arrive

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at the port of Brunsbüttel.

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More will follow.

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This is not only good
news for our energy security

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and that of our European neighbors who
will be receiving gas from these terminals.

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Above all,
it shows:

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Germany can be flexible; we can be
unbureaucratic; and we can be fast.

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I spoke of a new Deutschland-Geschwindigkeit
in this regard, a new “German speed”.

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We will make this German
speed the benchmark –

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also for the transformation
of the economy as a whole.

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Your companies can
hold us to this standard.

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A new law mandates that
the expansion of wind power,

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solar energy,

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as well as electricity and hydrogen
networks now take priority.

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We will make available no less than two
percent of our country for wind power

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– with a
minimum of red tape.

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We have streamlined our processes
so that approvals for electricity grids

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– to name just one example – are granted
on average two years faster than before.

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And we intend to step
up the pace even more.

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You can also
rely on our targets.

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The obstacles have
been swept aside.

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For 2023, we have more
than doubled the volume

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of calls for tender for
onshore wind farms alone.

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By the year 2030,

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80 percent of our electricity production
will come from renewable sources

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– again,
double what it is at present.

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At the same time,

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our electricity requirements
are increasing –

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from 600 terawatt hours today
to 750 by the end of the decade.

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And we are expecting them to
double, yet again, in the 2030s.

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This is a massive increase.

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That’s why the Federal Network
Agency has been given a clear mandate

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to prepare and expand
our electricity grids accordingly.

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We will regularly review
the progress made.

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If it’s not on schedule,
the measures will be adjusted.

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However, electricity alone is not
enough to run Germany’s industry.

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I am thinking, for instance,
of steel production.

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Hydrogen will play
a decisive role there.

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And that is not
a far-off scenario.

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Last fall, Thyssenkrupp
gave the green light to build

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a direct reduction plant for
low-carbon premium steel.

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With a capacity of
2.5 million metric tons,

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the plant will save 3.5 million
metric tons of CO2 per year.

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This is just one example of
Europe’s strength in innovation.

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Europe is the world’s number
one in hydrogen patents.

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And one in ten global
applications comes from Germany.

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The first supply chains for green hydrogen
are currently being built up in our country.

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For our own production,

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we are using offshore
wind in the North Sea.

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In parallel, we are concluding
hydrogen partnerships worldwide.

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For as long as quantities are small and the
costs of production correspondingly high,

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the state will bring prices
down to a level lucrative for the industry.

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Our goal is nothing
less than an electrolysis boom.

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And,
as quantities increase,

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a hydrogen-powered industrial
sector will emerge that preserves

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the climate and is independent of
volatile prices for fossil fuels.

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Because one thing
is absolutely certain:

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Energy must remain affordable – in
Germany, in Europe, and worldwide.

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In Germany, we decided to cap electricity and
gas prices for private citizens and companies.

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These measures
will run until 2024.

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Annually, we will use around
2.2 percent of our GDP for this,

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a total of up to
200 billion euro.

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That is both forceful
and proportionate.

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It will give your companies
the reliable energy prices

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and the planning certainty you need
to invest in Germany’s transformation.

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In the European Union,

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we have agreed on joint
targets for gas filling and saving.

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We will purchase gas jointly more
often and coordinate storage better.

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And we will use our market power to ensure
that European prices do not decouple completely

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from the world market.

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Moreover, we are also aware
of our global responsibility.

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Let me say this expressly to
our friends and partners in Asia,

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Africa,
Latin America and the Caribbean:

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The fact that we Europeans
purchase LNG on the world market,

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must not lead to
scarcity elsewhere.

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We will need alternatives for the
roughly 120 billion cubic meters of gas

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from Russian pipelines
missing from the world market –

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more renewables, of course, but also,
temporarily, additional gas resources.

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Otherwise there is a danger
that without affordable gas,

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emerging economies in particular
might switch back to coal.

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This would be even more
harmful to the environment.

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Of course,
we must avoid new lock-ins,

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new path dependencies at all costs
– by making new projects HO2-ready

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from the very outset and by
expanding renewables in parallel.

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In the short term this
may lead to higher costs.

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In the long term
we all stand to save

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if the impact of climate
change is less dramatic.

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In Germany, too, switching to a
climate-friendly economy will take efforts.

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We are talking about investments
around 400 billion euro

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for the expansion of renewables
between now and 2030.

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Investments, by the way,
which are already well underway.

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The most recent example is a
contract worth billions for Siemens Energy

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to connect a new
offshore wind park to the grid.

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And this is just one example
illustrating why this turning point

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towards a climate-friendly industry is
not the end of our industrial powerhouse.

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But a new start!

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After all, even before the energy
crisis that Russia triggered,

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Germany’s business model was not only based on
the energy-intensive mass production of aluminum,

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cement, or crude steel.

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But on highly specialized research- and
technology-intensive industrial products.

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Products that are needed
all around the world.

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All the more so,
actually,

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when the world is now transitioning
towards a climate neutral future.

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Even before Russia’s
war of aggression,

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Germany’s energy
prices were not the lowest.

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And yet Germany was
and remains competitive.

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This is because of thousands of small and
medium-sized enterprises all across the country.

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Enterprises that are highly
innovative and adaptable –

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which explains why they are
so often global leaders.

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This is thanks to high public and private
investment in research and development,

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which, for example, ensured that the
first COVID-19 test and the first safe

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and effective COVID-19 vaccine
were developed in Germany.

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Just in December,

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a team at the Helmholtz
Center in Berlin

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set a new world record for
the efficiency of solar cells.

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And now,
just a few weeks later,

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our companies are already setting up pilot
lines for the use of these tandem cells.

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That,
ladies and gentlemen,

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is and remains the
German business model –

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particularly now as we chart our
path to a climate-neutral future.

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Where else is there such broad consensus
between businesses, employees, and politics

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that the path to climate neutrality
is not just ecologically necessary

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but also offers new opportunities
in global competition?

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When it comes to basic and professional
training for employees, for example,

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politics, business, and trade unions
in Germany are working hand in hand.

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And before the year is out,

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our country will finally benefit
from modern immigration legislation.

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After all, if we want to remain
competitive as a leading industrial nation,

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we need experienced practitioners
– qualified engineers,

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00:16:54,082 --> 00:16:56,334
tradesmen,
and mechanics.

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Those who want to roll up their
sleeves are welcome in Germany.

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00:17:01,083 --> 00:17:03,584
That is our message!

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00:17:03,584 --> 00:17:10,333
For decades now, the forecasts have been
predicting a shrinking German population.

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But it is up to us to decide
whether this happens.

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So far it certainly hasn’t.

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Today Germany has more inhabitants
and employed persons than ever before.

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And this is precisely the
trend we are going to continue.

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Ladies and gentlemen, a climate-neutral
future is, needless to say,

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not something any single
country can achieve on its own.

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That is why our dialogue and a
forum like Davos are so crucial.

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What we are doing in Germany also
serves the goal of making Europe

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the first climate-neutral
continent by 2050.

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At a European level,

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we are going to lower our net greenhouse
gas emissions by at least 55 per cent

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by 2030 compared to 1990.

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This decision stands.

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Here,
we are relying on the market,

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on competition,
and on innovation.

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The EU’s emissions trading
system is a case in point.

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Even today we are using it to
cut permissible emission levels

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in a way that is
predictable for all.

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At the same time,

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this system is serving as
a catalyst for innovation.

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But to ensure the most
ambitious are not disadvantaged,

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we prepare a carbon border
adjustment mechanism in Europe.

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At the same time however, Europe
remains open for international trade.

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I am doing my
utmost to ensure

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that the free trade agreements we have
successfully negotiated with Canada,

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Korea, Japan, New Zealand, and Chile
will soon be followed by new ones:

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with MERCOSUR,
India, and Indonesia.

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And we are also open to
discuss a tariff agreement

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for the industrial sector
with the United States.

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Through these agreements we are
creating a level playing field

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and we are preventing
high-emission industries

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from heading off to countries with less
ambitious climate targets.

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This is also the aim of the
international Climate Club

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we launched during
Germany’s G7 Presidency.

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A Secretariat has recently been set up at
the OECD and the International Energy Agency.

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So the Club is now open to new,
ambitious members.

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In the United States,
this ambition has a name:

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the Inflation Reduction Act.

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Some 370 billion dollars have been earmarked
for energy and climate change mitigation

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over the next ten years.

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I very much welcome
this investment.

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Through the German Climate and
Transformation Fund

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we have made almost 180 billion euro
available ourselves for the period 2023 to 2026.

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But local content
requirements for certain products

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must not result in discrimination
against European businesses.

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Protectionism hinders
competition and innovation

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and is detrimental to
climate change mitigation.

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We, as EU members, are talking
to our American friends about this.

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And at the same time,

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we are looking at what
we ourselves can do

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to further improve investment
conditions here in Europe.

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The Chips Act,
for instance,

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has brought about a new start
for chip manufacturing in Europe.

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Investors are starting new production
plants for billions of euros.

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They can build on an existing
semi-conductor industry.

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This could become a model
for other key technologies –

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particularly in the digital
and climate sectors.

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And the funding is
there for the taking.

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To date, only 20 percent of
the more than 700 billion euro

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in the European Recovery Fund 
has been paid out.

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00:21:23,723 --> 00:21:26,973
Its full impact will thus
emerge over the coming years.

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To remain competitive,

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00:21:29,722 --> 00:21:35,723
we will have to make European legislation
on state aid more agile and flexible –

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just as European Commission President
Ursula von der Leyen has proposed

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and reaffirmed here yesterday.

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So that investors know in
advance what support to expect –

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and don’t have to wait until years after
their investment to find out.

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Ladies and gentlemen,

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the past year challenged
us as seldom before.

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Yet at the same time,

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we changed and moved
things forward as seldom before.

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Germany itself is changing.

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If I may make a prediction:

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My successor will address you at the
World Economic Forum in 2045. Sure:

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He or she will present Germany

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00:22:24,351 --> 00:22:28,604
as one of the world’s first
climate-neutral industrial nations.

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00:22:28,813 --> 00:22:33,463
Energy supplies in Germany and Europe
will then be sourced almost exclusively

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from green
electricity, heat, and hydrogen.

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We will be moving emission-free
on our roads and railroads.

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Our buildings will
be energy efficient.

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00:22:43,962 --> 00:22:48,212
Our businesses will be producing
on a climate-neutral basis.

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And what is more,

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they are the ones who will
have driven this transition,

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who will continue to drive it.

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So, if you ask me today where you
can invest in the future sustainably

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00:23:02,463 --> 00:23:05,464
with a high return,
my answer is:

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Don’t look any further!

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00:23:06,965 --> 00:23:09,215
Come to us, to Germany,
and to Europe!

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Thank you very much.