1. REEEP – Sustainable Growth through Energy Efficiency 8 December 2007 Bali International Conference Centre Keynote - Germany Franzjosef Schafhausen, Deputy Director General „Environment and Energy“ Federal Ministry for the Environment, Nature Conservation and Nuclear Safety, Berlin

2. How far do we have to go – Identifying appropriate targets and timetables Targets driven from consequences of climate change  max. 2° C rise: Global reducing emissions by 50 % until 2050 80 % for industrialized countries taking action now intermediate binding targets and well defined timeframes for getting on the right track

3. GHG Targets, EU and Germany EU Council, March 2007: Binding Target: 20 % reduction in GHGs by 2020 versus 1990 Conditional: 30 % reduction in GHGs by 2020 versus 1990, provided other industrialised countries are willing to make comparable reductions For Germany, a 30 % reduction in GHGs by 2020 translates into minus 40 %: This requires a reduction of 270 million t/a GHGs compared to emissions volume in 2006! 3

4. How do GHG emissions and economic growth relate Achieving effective GHG targets requires Decoupling of emissions and economic growth!  Increase of Energy Efficiency  Strengthening low Carbon (or Carbon free) renewable energy sources

5. Decoupling of economic growth and GHG emissions in Germany

6. GHG-Emission Trends in Germany BAU Kyoto-target GHG target GHG 0 200.000 400.000 600.000 800.000 1.000.000 1.200.000 19901995200020052010 20152020 Emissions[Gg CO2-Eq] THG-Emissions Kyoto BAU 40%-Target

7. Energy related CO 2 -emissions of different sectors -16 % -40 %

8. The 8 main fields of action according to their reduction potential  Governmental Declaration (26 April 2007) How do relevant sectors contribute to the 40 % Target?

9. Emission reduction contributions Measure Reduction contrib. in million t/a CO 2 equiv. 11 % reduction in electricity consumption40 Upgrade of the power plant portfolio30 Increase the proportion of electricity generated from renewables 55 Doubling in the share of electricity generated from CHP plants to 25 % 20 Reduction in energy consumption via building renovation, efficient household technology and production processes 41 Use of renewable energies to generate heat - increase to 14 % 14 Increase in transport efficiency and increase in the use of biofuels to 17 % 30 Reduction of non-CO 2 gases40 9

10. The integrated Energy and Climate programme (endorsed 5th Dec. 2007) sets out 29 cornerstones in all relevant sectors in addition the EU ETS is covering energy supply and energy intensive industries

11. The integrated Energy and Climate Programme - Highlights 1Improvement of the CHP-Act and the Voluntary Agreements on CHP 25 % power generation by CHP 2Expansion of power generation by renewables 25 – 30 % power generation by renewables 3Development of CCS – construction of 2 – 3 demonstration plants Next step: Legal framework 4Smart meteringOptimisation of power consumption 5Clean power generation (low NO x power plants) 6Energy Management in small and medium sized companies Using the unexploited potential to enhance energy efficiency 7Economic incentives to promote CO 2 -reduction and energy efficiency Support programmes outside buildings

12. The integrated Energy and Climate Programme - Highlights 8Energy efficient products and servicesUse of standards, consumer friendly labelling etc. 9Feed in of biogas to natural gas gridsTarget setting, specification of special provisions 10Improvement of existing building codesEnergy efficiency requirements to be raised by an average of 60 % (2012) 11Operation costs of rental accomodationright to withhold payment 12Substitution of electric heating systemsReplacement of night storage heaters

13. The integrated Energy and Climate Programme 13Energy-efficient modernisation of social infrastructure Refurbishment of schools, day nurseries 14Renewable Heating Act14 % renewable energies share of heat consumption 15Energy efficient modernisation of federal buildings 2006 – 2009: 500 Mio. € budget 16CO 2 strategy for passenger carsaverage CO2- emissions form new cars 120 g/km 17Expansion of the biofuel market20 % biofuels by volume by 2020

14. The integrated Energy and Climate Programme - Highlights 18Reform of vehicle tax based on CO 2 Differentiation of tax rates related to CO 2 -emissions 19Energy labelling of passenger cars EU-wide labelling 20Development of the Highway toll for Trucks Differentiation of toll rates by emission classes 21Emissions Trading on Aviation 22Emissions Trading on Maritime Shipping 23Reduction of emissions of HFC‘s Chemical Climate Protection Ordinance (air conditioning, refrigeration systems)

15. The integrated Energy and Climate Programme - Highlights 24Procurement of energy efficient products and services by the Federal Government Technical guidelines to form the basis for procurement decisions 25Energy research and innovation Development and implementation of a High-Tech Strategy 26Electric MobilityNew batteries, new power storage systems 27JI and CDMSupport programmes, Energy Efficiency Export Strategy 28Reporting by German embassies 29Transatlantic climate and technology initiative Closer transatlantic cooperation and consultation on climate Protection

16. Identifying suitable Instruments legally binding frame  clear perspective and conditions for reaching the targets supporting and funding schemes  developing start up initiatives feed in tarifs  creating development of sustainable techniques Information, Education, Advice  creating savings and win-win situations

17. Implementation Update of Acts and Ordinances Combined Heat and Power-Act, Renewables Act, Building Codes, Act on Biofuel Quotas, Vehicle Tax Act, Ordinance on Heating Costs, Chemical Climate Protection Ordinance, Fuel Quality Ordinance

18. Implementation New Acts and Ordinances: Renewable Heat Act, Feed in Act on Biogas, Energy Act on grid restruction (off shore wind), Legal requirements on CCS, Ordinance on the liberalisation of metering, Ordinance on clean power generation, Sustainable requirements on biofuels, Ordinance on labelling of passenger cars

19. Implementation Other measures: Technical requirements on procurement, guidelines on programmes on subsidies (buildings, SME‘s, production processes etc.)

20. Monitoring General Monitoring – Report to the Cabinet every two years Specific Monitoring – every policy and measure has to be monitored In every case monitoring has to be transparent and independent. It will be published and will create to basis for an updating process

21. Results of the Climate Programme The Programme decisions will be able to reduce the GHG-emissions by 35 to 36 % by 2020 (base year 1990) In absolute terms: 213 Mio. t (CO 2 -eqiv.) of GHG - emissions There is a gap of 5 – 4 % (- 57 Mio. t) with regard to the 40 % target

22. The integrated Energy and Climate Programme – The effects Field of Actionexpected reduction by 2020 in mio. t Government‘s declaration april 26 th 2007 1renewables55realised 2Upgrade of the power plant portfolio 30realised 3Increase the share of electricity generated from renewables 20realised 4Doubling in the share of electricity generated by CHP to 25 % 8only 20 % will be realised 5Reduction in energy consumption trough building renovation, efficient household technology and production processes 34more than 80 % will be realised

23. Field of Actionexpected reduction by 2020 in mio. t Government‘s declaration april 26 th 2007 6Use of renewable energies to generate heat - increase to 14 % 11Approximately 80 % will be realised 7Increase in transport efficiency and increase in the use of biofuels to 17 % 25More than 80 % will be realised 8Reduction of non-CO 2 gases3075 % will be realised The integrated Energy and Climate Programme – The effects

24. Cost and Benefits – does it PAY? FIRST: the most cost intensive measure is NOT ACTING Numerous measures are for free The German 40 % Programme will lead to a SURPLUS of 5 bill. € in 2020- if benefits from prevented CO2 emissions are taken into account

25. The Programme Pays!

26. Some Perspectives

27. Power generation: 114 Mio. t 171 155 100 141 134 76 153 163 33 36 70 165 18 63 140 31 34 0 100 200 300 400 500 600 700 Ist 1990Ist 2005UBA-Szenario 2020 Jahr TWh lignitehard coalnucleargasrenewablesothers +26% + 30% Savings: 11%

28. Potential of Renewable Energies and Energy Efficiency until 2050 Structure of primary energy demand scenarios until 2050 0 2 000 4 000 6 000 8 000 10 000 12 000 14 000 16 000 200020102020203020402050 primary energy demand (PJ/a) nuclearlignitehard coal min. oilgasrenewables efficiency increase 835 717 588 451 309 19 CO 2 2 - Emiss. (Mio. t/a) 2,2 5,3 12,7 22,2 32,5 43,6 Share RE (%)

29. Co-Benefits of Climate Change Mitigation Reducing the dependency from energy imports Reducing the dependeny from increasing energy costs no loss of comfort – providing energy services not energy sources  all mitigiation with existing technologies! Early action  good position for exporting Low-Carbon- Technologies No nuclear energy needed owing to more Efficiency and Renewables:

30. Conclusions Germany takes over a contribution of 40 % GHG reduction until 2020 The recently agreed Climate programme translates reduction potentials into a mixed set of measures, based on binding frames, support schemes, initiatives and information. It covers all relevant sectors and will result in appr. 36 % GHG reduction Benefits outweigh the costs by 5 bill. €; the programme creates numerous socio-economic co-benefits (e.g. employment, energy independence)