"Next German Government to Strengthen Eco-Friendly Policies and Accelerate Digital Transformation"

KOTRA, Report on 'Market Outlook and Opportunities for Korean Companies After the German General Election'

Market Outlook and Opportunities for Our Companies After the German General Election Report Cover
Photo by KOTRA

[Asia Economy Reporter Kim Heung-soon] As discussions for forming a coalition government are gaining momentum following the German general election, it is anticipated that the next government will further strengthen eco-friendly policies and accelerate digital transformation.

KOTRA announced on the 11th that it will publish a report titled "Market Outlook and Opportunities for Our Companies After the German General Election," which includes these insights. The report forecasts that since all major German political parties emphasize climate change response and expansion of digital infrastructure as core policies, the eco-friendly market will continue to experience high growth, and investments in digital infrastructure development will also increase.

According to KOTRA's analysis of the economic and industrial policies of the coalition parties likely to form the next government?the "traffic light" coalition (Social Democratic Party + Green Party + Free Democratic Party)?the Green Party is expected to have a significant influence on the next coalition government's environmental policies.

During the election campaign, the Green Party pledged to achieve carbon neutrality by 2035 and promised to implement stronger environmental policies than the Merkel administration. The Green Party proposed raising the carbon tax from the current €25 per ton (approximately 34,407 KRW) to €60 per ton (approximately 82,576 KRW) and expanding the solar power generation target to 12 GW by 2022.

They also pledged to increase the number of electric vehicles to 1.5 million by 2030 and to allow only eco-friendly vehicles with zero carbon emissions to be registered. The Social Democratic Party, which became the largest party in the parliament in this election, also promised to mandate solar panel installations on public institutions and commercial facilities, promote electric vehicle battery production and recycling, and foster the hydrogen economy to expand clean energy adoption.

The next government is also expected to rapidly advance digital transformation. All three parties?the Social Democratic Party, Green Party, and Free Democratic Party?are proactive about building digital infrastructure. The Social Democratic Party pledged to provide ultra-high-speed internet of 1 GB or more to all households and businesses in Germany. The Green Party emphasizes administrative digitalization and cybersecurity. The Free Democratic Party promised to establish 5G networks across Germany by 2025 and create a new ministry called the "Digital Transformation Ministry" to oversee the new government's digital transformation policies.

Korean companies are preparing countermeasures in response to policy changes by the next German government. KOTRA reported that after contacting local companies following the German general election, the prevailing opinion was that there would be no abrupt policy changes in the future.

However, as climate change response policies are expected to be further strengthened, companies are preparing product planning, development, and market strategies aligned with eco-friendly trends such as parts for electric and hydrogen vehicles, and wind and solar power.

Kim Tae-ho, Head of KOTRA's Economic and Trade Cooperation Division, said, "The eco-friendly and digital trends revealed in the German general election present both opportunities and threats for our companies entering the German market," adding, "We will actively support our companies' entry by identifying promising sectors."