03.09.2025 - The energy transition in its current configuration leads to significant, long-term costs burdening companies and households, which are hard to reconcile with international competitiveness for Germany's key industries. This assertion comes from a recent study conducted by the economic consultancy firm Frontier Economics commissioned by DIHK. Their findings indicate that maintaining current energy policies would require annual private investments in the energy, industry, building, and transport sectors to increase significantly – from an average of 82 billion euros between 2020 and 2024 to at least 113 billion to 316 billion euros in 2035.

"The numbers are telling: With current policies, the energy transition cannot succeed," said DIHK President Peter Adrian. "For the energy transition to work, we need a strong economy. Often, investments in the energy transition yield no direct returns. This money must therefore be generated elsewhere first. The burden on companies and the population is reaching levels threatening Germany's economic competitiveness and wealth, and even jeopardizing acceptance for the energy transition." By comparison: Total private investments in Germany in 2024 amounted to approximately 770 billion euros. Implementing the energy transition would require these investments to increase by between 15% and 41%, according to the study's calculations.

High Energy System Costs Weighing Down Businesses

In the years ahead, the transition would also cause substantial increases in the costs of energy systems, including investment in domestic energy production, infrastructure, and ongoing costs, such as operating grids and facilities for energy imports. The total estimated costs, as per the study, range from 4.8 to 5.5 trillion euros from 2025 to 2049—comprising 2.0 to 2.3 trillion for energy imports, 1.2 trillion for grid costs (investments and operational expenses), 1.1 to 1.5 trillion for energy generation investments, and approximately 500 billion euros for operational costs of generation facilities.

"Excessive transition pressure through unrealistic requirements leads to escalating costs, misallocation, and inefficiency," said Adrian. The German economy is already drawing consequences: "Energy-intensive businesses are increasingly relocating their production and, hence, jobs abroad. Continuing along this path without reconsidering energy policies under these conditions would not only harm Germany's economic position but also set back the essential goal of climate neutrality." A rethink within energy policy is urgently needed to reduce the burdens inflicted by Germany’s energy transition.

Study Stimulates Thoughts on Cost-Efficient Energy Transition

Frontier Economics' study puts forth concrete suggestions and, in part, outlines a radical course adjustment in energy policy. "The study establishes critical stimuli. We must engage in societal discussions about achievable possibilities," said Achim Dercks, DIHK Deputy CEO. A central element in the model laid out by the study is a CO₂ certificate trade, where emission targets are periodically adjusted in line with the international peer group development to accomplish ambitious climate protection, avoiding disadvantages due to unilateral national standpoints jeopardizing German industries. Furthermore, the concept advocates for de-regulation, technological competition, and continued utilization of the current energy infrastructure, especially gas grids that can transport hydrogen and climate-neutral natural gas—decarbonized through CO₂ capture and storage (CCS). Additionally, climate protection projects certified abroad should be made eligible for credit in Germany.

The study's conclusion emphasizes that this strategy could save 530–910 billion euros by 2050, representing an 11–17% reduction in the projected overall costs of the transition. Furthermore, the cost reduction possibilities increase by 80–220 billion euros by shifting the goal of climate neutrality by two years, e.g. to 2050. Total savings, depending on the extent of international cooperation, could amount to exceeding one trillion euros by 2050.

Even Short-Term Cost Reduction Potentials Must Be Utilized

"The study offers inspiration for a long-term reorientation of the energy transition. Simultaneously, its proposals must be practically applied short-term," Dercks noted. "DIHK views comprehensive network planning, ending renewable subsidies for profitable installations, and a cost-effective energy mix—including biomethane, blue hydrogen, or CCS decarbonized natural gas—as crucial." Besides, it would be preferable to steer the construction of new gas power plants not through state aid but market incentives - such as obligatory coverage for electricity providers.

Moreover, granular regulations, complexity, and bureaucratic processes hinder the energy transition and exhaust acceptance: "The transformation stagnates among enterprises and consumers as regulatory and bureaucratic barriers become overburdening. Particularly through EU-level Green Deal legislation, unnecessary bureaucracy has flourished—requiring immediate backpedaling," Dercks explained. "Nationally, simplifications in energy efficiency laws and building energy codes are imperative. Decisions about future directions in energy policy await the German government within this year. Clear is: To successfully execute the energy transition, it needs flexibility, simplicity, cost reduction, innovation space, and recognition that economic performance is indispensable for effective climate protection."