Germany Launches Climate Club to Tackle Industrial Emissions at COP28

Germany Launches Climate Club to Tackle Industrial Emissions at COP28

During the second day of the 28th Conference of Parties (COP28) to the United Nations Framework Convention on Climate Change, leaders convened to officially introduce the Climate Club—a collaborative initiative aimed at facilitating cooperation among nations in the endeavor to decarbonize the industrial sector.

Championed by Germany and Chile, the Club has garnered support from 36 member countries, including Kenya, the European Union, Switzerland, and others. Each member has committed to actively contribute to the development of strategies and standards for decarbonization, with the Club currently representing 55% of the global economy.

Germany’s Chancellor Olaf Scholz, presiding over the event, outlined key priorities for the Club. These include establishing standardized emission calculations for carbon dioxide (CO2) intensities of specific products, engaging in strategic discussions on defining net-zero emissions for steel and cement, and creating a platform to connect member needs with available financing instruments from both the public and private sectors.

The overarching goal of the Climate Club is to ensure the successful decarbonization of industries for the benefit of the climate and businesses. This involves implementing ambitious policies, aligning methodologies and standards, and enhancing financial support and assistance for both emerging and developed economies.

The Club’s core premise is rooted in the understanding that challenging-to-address sectors, such as steel, cement, and chemicals, contribute to approximately 70% of global CO2 emissions from industry, with developed countries playing a substantial role in these emissions.

At the COP28 launch, the Climate Change Work Programme 2024 was introduced, outlining programmatic activities divided into three pillars: advancing ambitious and transparent climate change mitigation policies, transforming industries, and boosting international cooperation and partnerships. These pillars are further subdivided into nine interconnected modules that delineate the initial work of the Club.

The governance framework stipulates the election of two co-chairs for two-year terms, with Germany and Chile currently serving in this capacity. A body of members will determine the scope and approve the work program, budget, and amendments. As the Club expands to 40 members, a steering group will be formed, and a secretariat, currently headed by the OECD and IEA, will implement the work program.

Chile’s Minister of Foreign Affairs, Alberto van Klaveren, emphasized the urgency of addressing the climate crisis through international collaboration during the inaugural event. He acknowledged the unique challenges posed by the industrial sector, especially in steel and cement, due to the lack of technological alternatives for achieving zero emissions.

The 2024 work program will focus on the steel and cement sectors, emphasizing the need for comparable emissions intensity data, definitions for green steel and green cement, and a matchmaking platform for industry decarbonization projects.

European Commission President Ursula Von der Leyen highlighted the importance of addressing resource access, specifically critical minerals, in the context of clean technologies. She proposed the establishment of a global goal at the summit to triple renewable energy and double energy efficiency by 2030.

The United Kingdom emphasized three key areas within the Climate Club: creating baselines for sustainable standards in industrial products, addressing carbon leakage risks, and providing support for workers and industries. The UK pledged financial assistance, contributions to the Green Climate Fund, and collaboration with the Breakthrough Agenda to make clean technologies more affordable.

In a policy brief, the Germany-based think tank EPICO KlimaInnovation recommended that the Climate Club pilot with the steel sector, focusing on quick wins that mutually benefit both the Global North and Global South. The brief also suggested concentrating on policy areas with fewer regulations and utilizing financial and technical assistance as catalysts for success, while considering national roadmaps and long-term visions for steel decarbonization in membership criteria.