01 Mar The German heart at the center of Europe
Dr. Andreas Pinkwart, Minister of Economic Affairs, Innovation, Digitalization and Energy, North Rhine-Westphalia, explains why his home region is both an industrial and naturally beautiful habitat.
How would you sum up the significance of North Rhine-Westphalia to Germany and Europe from an economic standpoint, but also the essence of the region and its people culturally speaking?
North Rhine-Westphalia is the biggest state in Germany; with 18 million inhabitants we are as populous as the Netherlands. If it were an independent country, it would be number seven among the industrial countries in Europe by GDP. Our state benefits from an excellent geographical location in the middle of Europe—two hours from Brussels, three from Paris, and very close to the major European harbors of Rotterdam and Antwerp. North-Rhine Westphalia is home of the largest European cluster of energy intense industries such as aluminium, chemicals, cement, glass, paper, steel. 160 million people live within 500-kilometer of our state capitol Dusseldorf. 12 million people live in the Rhine-Ruhr area, connected by fantastic highways, railways and by ship. Everything between Aachen, Bonn, Cologne, Dortmund and Essen is reachable within an hour. In a nutshell: We live, work and create in one of the largest metropolitan and industrial areas in Europe comparable to Greater London or the Paris metropolitan area.
North Rhine-Westphalia is a great place for science and technology, housing some of the largest and most innovative companies, like Bayer, Henkel, E.ON and Evonik, as well as hundreds of thousands SMEs and startups. And we’re home to 690 leading “Hidden Champions.” For good reasons: We have highly qualified employees and high profiled, innovative, globally oriented companies, and most of them are family owned. Our universities are also phenomenal. We implemented a special law guaranteeing freedom and autonomy to public universities, the most liberal law in Europe. There are 37 public universities and universities of applied sciences and 33 private ones with over 770,000 students with a high number of students in engineering and natural sciences, who are so important for the challenges we are facing.
We also have one of the most ambitious climate goals in Europe. In 2019, we recorded the highest decrease in CO2 emissions of any industrial region in Europe. Between 1990 and 2019, we reduced CO2 by 38 percent. This means that we have saved as much as the Netherlands and Belgium combined. Preliminary figures for 2020 predict a 45% reduction. We expect to do even better as we transform our energy system to renewables and our industries to be climate neutral, using hydrogen as an enabler. The Federal Republic of Germany decided to invest nearly $1.1 billion right here in North Rhine-Westphalia in hydrogen. The federal government also brought the national center for hydrogen mobility to North Rhine-Westphalia. In Duisburg and the Rhineland, we have a strong hydrogen competence area in basic and applied research. The German government is also investing heavily in a national battery research plant in Muenster. There we have collaborations between scientists and the chemical, aluminum and automotive industries and others. Hydrogen and batteries, but also circular economy and the implementation of climate-neutral processes, are the primary drivers of our future climate neutral industries.
What are some of the key underlying factors that contributed to this achievement, and which sectors would you like to point out as the most vibrant and fastest growing in your economy at the moment?
North Rhine-Westphalia is a prime location for international companies. In fact, 20,000 foreign companies invested here in the last decades, some of them very prestigious, such as 3M, Johnson&Johnson, Boing, BP, Ericsson, Ford, Huawei, Toyota, Mitsubishi and Vodafone. They provide jobs for about one million people. Recent newcomers include the U.S. specialist for hydrogen technology Plug Power, the Indian IT giant Wipro and the pharmaceutical company Gan & Lee from China. They have chosen our state because of our special strengths and technologies, highly qualified employees, extraordinary infrastructure, and easy access to the European market. North Rhine-Westphalia is a hub for European activities as well as for world-class logistics. In fact, we house the world’s biggest research center for logistics in Dortmund. This is one of the reasons why the iconic Levi’s brand chose our state as its European distribution center, creating 650 new jobs here.
In North Rhine-Westphalia, we are specialists in organizing value chains, and this is now in a fundamental transformation process because of digitalization. Our companies, supported by our universities and research labs, are using 5G, blockchain technology and artificial intelligence to transform our businesses to be on the cutting-edge of the new digital world. There we are also frontrunners because we have the fundamental research, but also the network and capability to transform energy intense industry, as well as our small and medium-sized companies. In the last few years, we have seen an increasing number of start-ups focused on business-to-business, organizing with vital SMEs in the supply chains. Here, companies can also easily scale up and bring technologies and innovations to other markets in Europe and worldwide.
What are some of the most important projects that are in your pipeline today?
The biggest enabler to increase competitiveness is energy transformation. We are committed to radically transform our electricity system over the next eight years. We want to phase out our hard and lignite coal power plants by 2030 and are moving ahead much faster than all other coal regions in Germany. Therefore, we expect to receive $16.3 billion from the federal government to invest in the transition of our coal mining areas toward climate-neutral and sustainable industrial regions. We do a lot of research in the field of new mobility, new housing and industries, directly transferring knowledge to new companies and transforming existing companies. In the Rhineland, we are transforming the largest active coal mining area in Europe and want it to become the most successful economic transformation region on the continent. The transition project has been running for the last two years and we have already invested more than $327 million. In fact, by the end of the year, we intend to have assigned more than $4.3 billion to specific projects. This will also open up new opportunities for foreign companies who would like to participate in the transition process of the region.
Another exciting development is that we are seeing a lot of new investments, especially from the U.S. Very recently fuel cell and hydrogen specialist Plug Power opened their European headquarter in Duisburg harbor, the top inland port worldwide.
What other initiatives is the region taking toward decarbonization?
We decided on a second energy transformation strategy a few weeks ago with new, even more ambitious climate goals. Initially we wanted to reduce carbon emissions by up to 95 percent by 2050. Last summer, we announced we will become climate neutral by 2045, which is a huge leap forward. Our newest energy strategy is to double wind renewables by 2030 and, at the same time, triple or even quadruple solar power in our state. We are planning new hydrogen pipelines and power grids coming from the North Sea to import green electricity from offshore wind to our industries.
Second, we have published our hydrogen roadmap providing a clear plan to expand the production and imports in the future. We support companies in converting their processes to hydrogen. Four years ago, we started the initiative “IN4climate.NRW” with what is now over 30 large industrial companies. On a new, innovative working platform, industry, science and government are working together on solutions for the climate-neutral transformation of the industry. Essential aspects of practical industrial transformation are examined and evaluated in key work areas of hydrogen, process heat, circular economy, carbon economy as well as supply and infrastructure. In addition, the state government is supporting a large number of industrial transformation projects as part of the initiative, such as testing climate-neutral processes for the manufacture of high-quality glass products, the use of hydrogen in the steel industry or investigations into climate-neutral, and flexible aluminum production.
Third, we published a carbon management strategy because climate neutrality is not only about decarbonization. It is mostly de-fossilization, and in some cases carbon will be used in the future in the chemical industry and other sectors together with hydrogen and other elements to make synthetic materials. We collaborate with BP and Shell in this new approach.
Not only in the steel, chemical, paper, glass and aluminum industries, where we have powerful supply chains, is there a great deal of interconnectivity, but also in the new world of climate neutrality. We are creating a network whereby these industries can use each other’s resources. We all know we need new materials to substitute fossil fuels, and we have a growing bioeconomy investigating these new resources.
To give you an idea what transformation looks like here, Siemens Energy in Muelheim is a case in point: In the past, they produced special technologies for gas, coal and nuclear power plants. Now they produce electrolyzers and other technologies for the new climate neutral hydrogen world. In Oberhausen we have MAN. They produce compressors to make gas more fluid, which has been used over decades and centuries in the industries of the past. They are now producing compressors to turn hydrogen gas into liquid or to separate CO2 in the cement process. In short, the machinery industry is transforming to be an enabler for our energy-intensive industries, which are in turn transforming themselves. This is a huge task and vision to change our economies worldwide.
Digitalization is another megatrend—it creates capabilities to make the electricity system more flexible and more agile in the future with intelligent grids, to name just one component. We need to seize these opportunities and adapt faster. Therefore, we brought Factory 4.0, 5G mobile broadband, artificial intelligence, blockchain, neuroscience and quantum computing to our state and attracted lots of investments. In North Rhine-Westphalia we have a strong technology network, and we invest a lot in competence centers and new programs so companies can really benefit from new opportunities. In this way, we ensure our industry stays at the forefront of a new world of climate neutral livingand production.
What is the significance of the tourism sector and the culture and arts scene in the overall economy?
With its four major exhibition sites Cologne, Dusseldorf, Essen and Dortmund, North Rhine-Westphalia is one of the world‘s largest and most important trade fair centers. In the last 10 years before the pandemic, we attracted many tourists year after year. In 2019, we had around 50 million overnight stays, among them many business tourists. Visitors of the trade fairs afterwards enjoyed our multitude of cultural activities, opera houses, museums and excellent music events. Leisure tourists could enjoy our bustling metropolitan area with a lot of cultural activities surrounded by a fantastic and incredibly attractive landscape in our hidden regions.
Visitors can stay a few days or a couple of weeks, go skiing in winter or enjoy water activities in the summer, with a lot of offerings for cyclists and hikers as well. We are currently promoting the Urbanana initiative. You may have seen night pictures of Europe from space showing that the industrial regions from London to Milan actually look like a banana. It is the same thing here. By highlighting this banana-shaped urban jungle of North Rhine-Westphalia that extends from the Ruhr Area and Düsseldorf to Cologne, we want to show this metropolitan area is not only worth a trip, but also worth living in. It is both, an attractive city break, destination and a high-quality place to live in the heart of Europe; also to perhaps set up one’s first start-up.
Here you have the infrastructure and even more creative opportunities than in places like London or Paris. We want to invite people to visit, for example, Cologne, Duesseldorf and the Ruhr area to experience how closely connected these cities are, just like going from West to East London with one ticket. On www.urbanana.de, you can find activities, authentic background stories of local actors, and information about upcoming events or exhibitions, as well as creative retail shops and gastronomic choices for all tastes. On a digital app you can find activities—not only in one city, but in the whole region.
We want to be one out of ten most attractive regions for start-ups and creative people in Europe. If they come here, they will find everything they need—international people, places, industries and a remarkably highly-ranked cultural scene with so many opportunities in a small radius. This is the story we are working on getting out there.
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