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Departmental budget 09: Federal Ministry for Economic Affairs and Energy
"Strengthening the focus on economic, energy and research policy activities, creating further incentives for investment, and fulfilling international commitments"
Following the adoption of the 2016 federal budget by the German Bundestag, the Economic Affairs Ministry’s budget amounts to a total of approx. 7.622bn euros (2015: 7.395bn euros).
By providing investments and funding, the Federal Ministry for Economic Affairs and Energy aims to foster growth, innovation, and employment. Many of the funding measures are designed to strengthen SMEs in particular, especially via the promotion of research, development and innovation. The implementation of the energy transition is a particular focus, and especially the measures contained in the National Action Plan on Energy Efficiency.
An allocation of additional funding from the Federal Government’s investment package has made it possible to bring up the amount of funding for the Joint Federal/Länder Scheme for the Improvement of Regional Economic Structures (GRW) to the level envisaged in the coalition agreement. The 2016 Budget also reflects new funding priorities including the Alliance for the Future of Industry, film-making and the enhancement of soft skills in vocational training.
Expenditure of the Federal Ministry for Economic Affairs and Energy in 2016
All gures in 1,000 euros
Promoting innovation and providing related advice
Much of the funding available to support innovative SMEs is provided under the Central Innovation Programme for SMEs (ZIM), whose financial envelope has been maintained at the high level recorded in the preceding year (approx. 543 million euros). At least 40% of this funding is to be allocated to companies in the New Länder.
The go-Inno advisory programme provides SMEs with vouchers for targeted advisory services worth a combined 7 million euros, thereby supporting them as they develop innovative products and processes. Funding totalling 9.1 million euros has been earmarked to support diversification strategies of defence companies into civil security technologies.
Industrial research for companies
As in the previous budget, some 204 million euros has been set aside to fund industrial research by companies. This funding will be used to support pre-competitive research work that offers high potential for implementation, and to fund projects conducted by external, not-for-profit research establishments in the New Länder which do not receive public institutional funding.
Transfer of technologies and innovation
Under the TuIT umbrella programme, some 29 million euros is available to support the transfer of technology and innovation. This includes funding to safeguard and harness intellectual property and to advance standardisation.
Out of 106 million euros set aside for the maritime industry and for transport technologies, approx. 79 million euros will be used for the R&D programmes on maritime technologies (32 million euros) and new vehicle and system technologies (47 million euros). More support will be available in the form of innovation aid for shipyards; funding for real-time services in the field of maritime security will be pooled in a separate budget item.
Aerospace and the German Aerospace Center (DLR)
The 2016 budget for promoting research in the aerospace sector – an industry that is particularly high-tech – will be around 152 million euros. Over the next few years, the Federal Government will be providing up to 115 million euros in funding for new research projects, in order to create a competitive research environment for civil aviation and to safeguard highly-skilled jobs in Germany. Including the institutional funding for the German Aerospace Center (DLR), more than 1.43 billion euros is available for space research (including aviation, energy and transport) in 2016. Of this, 273 million euros has been allocated to the National Space Programme. The budget for international cooperation within the European Space Agency (ESA) is to rise to 782 million euros in 2016. Most of this increase is to be used to finance the German contribution towards the development of the latest generation of European launcher rockets, the Ariane 6, as agreed with Germany's European partners at the ESA ministerial conference in Luxembourg in December 2014. By providing this funding, the Federal Ministry for Economic Affairs and Energy is promoting advances in space technology, and is making a major contribution towards ensuring that the European and German space industries remain competitive. In addition to this support, the German Aerospace Center is to receive another 3 million euros from the investment package for each of the financial years of 2016, 2017 and 2018.
Funding under the Digital Agenda is being increased to close to €98 million. Within this programme, priorities include the development of digital technologies (more than 56 million euros) and the SMEs go digital programme (close to 29 million euros), which is focused on digital centres of excellence. Furthermore, the amount of funding allocated to the task of harnessing the potential of the digital economy has been increased compared to what had been envisaged in the draft tabled by the government. The focus here is on IT security and on the Industrie 4.0 initiative, within which networking and standardisation will be prioritised along with efforts to help SMEs gain better access to international markets.
SMEs: start-up, grow, invest
The 'new age for entrepreneurship' initiative
Overall funding for innovative start-ups will total 80.8 million euros in 2016. Amongst other things, the EXIST funding programme is to foster a culture of entrepreneurship at universities and research establishments, and to increase the number of spin-offs from scientific institutions.
The INVEST scheme, which is to bolster the market for venture capital market in Germany, is to be gradually expanded as of 2016. This year, a total of 30 million euros will be available under the programme. In addition to this, funding for technology-driven start-ups will again be available from the High-tech Start-up Fund, which, since 2013, has been entirely financed by the ERP Special Fund. Up to 2016, the ministry will provide an annual 5 million euros in fixed allocations to the ERP. 5.5 million euros is available for further projects launched under the 'new age of entrepreneurship' initiative.
Closing the skills gap / vocational training
Some 24.6 million euros of the 2016 budget has been set aside to ensure a secure supply of skilled labour. A key task for the Alliance for Initial and Further Training is to do so by means of providing dual training. For the first time in 2016, 5 million euros has been dedicated to the development of social skills as part of vocational training courses. The teaching of social skills is to raise the probability that trainees will complete their courses and get a job, as well as to feed into the interministerial strategy to promote democracy and prevent extremism. The vocational training programme (funding totalling approx. 74 million euros) sponsors courses in the skilled crafts sector outside the companies providing the training, and helps to establish, modernise and equip the relevant training centres for trade and industry. Further to this, an additional 8 million euros a year is available from the investment package for each of the financial years of 2016, 2017 and 2018.
Promoting the regional economy
A total of 624 million euros has been earmarked for promoting investment under the Joint Federal/Länder Scheme for the Improvement of Regional Economic Structures (GRW). The budgeted amount of 600 million euros will be topped up with 24 million euros from an additional investment package. Together with the cofunding from the Länder, it will be possible for approx. 1.25 billion euros' worth of funding to be mobilised for new investment projects by trade and industry and for measures to improve local commerce-related infrastructure in regions that are structurally weak.
Promoting business skills and expertise
In 2016, the government will be providing some 38 million euros to promote business skills and expertise among German SMEs in particular. This will be done through a scheme that uses various measures to encourage small and medium-sized companies to consult with external business specialists at an early stage and on any and every aspect of management.
Potential in the services market
Some 16 million euros of the 2016 budget has been earmarked to support and develop up-and-coming lead markets in the services sector and to harness the potential of the cultural and creative sectors, the healthcare industry, tourism and others. This includes a new 10-million-euro programme to promote the film industry, which is to boost Germany's competitiveness and capacity for innovation as a production location for films. Particular attention will be given to using modern German technology.
Energy and sustainability
Research and development projects
The 2016 budget will provide approx. 347 million euros for the implementation of the 6th Energy Research Programme, which supports research and development in the fields of energy efficiency, renewable energies, and nuclear safety.
Improving energy efficiency
Around 44 million euros will again be available in 2016 for measures to boost energy efficiency, and particularly for independent energy audits for SMEs and private households. Additional funding to implement the National Action Plan on Energy Efficiency (NAPE) will be provided from the Energy and Climate Fund.
Individual measures promoting the use of renewable energy
In 2016, a total of approx. 250 million euros will be available for the market incentive programme (MAP) for renewable energy installations, particularly those designed for the heating market and for harnessing electricity from geothermal energy and biomass, and for the running of the EEG Clearing Unit. Additional funding for these purposes is to be made available from the Energy and Climate Fund (see below).
International cooperation on expanding the use of renewables
This funding is to be used to finance cross-border projects that are to increase the use of renewables by Germany's electrical neighbours. More specifically, it is to be made available for investments in the planning and construction of installations that use renewables to generate electricity. Over the next few years, up to 50 million euros in total is available for this purpose.
Phasing out subsidies for hard coal / rehabilitating mines (Wismut GmbH)
Based on the agreement to phase out subsidies for hard coal mining, a total of approx. 1.282 billion euros has been made available for hard coal mining and for the re-adaptation benefits paid out to older employees leaving the industry. In the 2016 budget, funding of 136 million euros has been allocated for the ongoing rehabilitation and revegetation of the former uranium mining sites in Saxony and Thuringia by Wismut GmbH, including 8 million euros for the rehabilitation of former mines in Saxony.
Energy-efficient retrofitting of buildings
Some 515 million euros has been earmarked for energy-efficient construction and the retrofitting of buildings under the KfW’s CO2 Building Modernisation programme. The projects in question were approved in the period up to 2011. The programme is a key element of the energy transition and a vital instrument for the Federal Government as it works towards its energy and climate targets for buildings. All funding for projects approved under this programme after 2011 has been financed exclusively by the Energy and Climate Fund (see below).
Opportunities afforded by globalisation
Breaking into markets abroad
The various schemes designed for export promotion have been packaged together to create the 'Programme to develop foreign markets'(approx. 83 million euros). The new programme covers various export initiatives, trade fair stands, the manager training programme, and Germany’s EITI (Extractive Industries Transparency Initiative) membership.
Services provided by GTAI
Germany Trade and Invest (GTAI), the German state-owned enterprise tasked with promoting foreign trade and inward investment, also has an important role to play. A total of approx. 66 million euros will be allocated to GTAI and the network of bilateral chambers of commerce. Further to this, funding from this chapter will also be made available to the long-term, large-scale project entitled 'Construction of an urban railway in Ho Chi Minh City' (5 million euros), for Germany’s participation in World Expositions (approx. 7 million euros), the country’s membership in international organisations based outside Germany (including the WTO, ITU and OECD), and the institutional support granted to the German National Tourist Board (DZT; approx. 30 million euros). One million euros has been earmarked to support the economic reform process that is taking place in the Arab countries in transition (transformation partnerships).
Other spending approved
In addition to expenditure on communicating and evaluating economic policy and technology policy projects, chapter 0910 provides some 47 million euros for research and for the Federal Government’s contribution to the budgets of the 8 institutions that are members of the Gottfried Wilhelm Leibnitz Scientific Association and for which the Federal Ministry for Economic Affairs and Energy has been designated as the responsible government agency; plus another 3.7 million euros for priority projects conducted on behalf of the Federal Government Commissioner for the Affairs of the New Federal States. For the first time, funds have been allocated for the Alliance for the 'Future of Industry' (5 million euros).
Energy and Climate Fund
The ministry's targeted action on energy is to be continued in 2016, with an additional 2.04 billion euros worth of funding made available from the Energy and Climate Fund. This makes the fund the most important financial instrument for the energy transition. Nearly 187 million euros has been earmarked for energy research on energy efficiency and renewable energy; approx. 282 million euros is intended for the Energy Efficiency Fund, and approx. 66.5 million euros for electric mobility. Under the market incentive programme for renewables (MAP), more than 112 million euros will be available for promoting the use of renewable energy in the heat market. Two billion euros has been earmarked to be approved as funding for energy-efficient retrofits of buildings. In addition to these measures, a total of 245 million euros in grants will be available in 2016 for electricity-intensive companies to allow them to offset increases in electricity prices due to emissions trading (compensation for electricity prices). Roughly 18.7 million euros is available for international energy cooperation, raw materials partnerships and cooperation on technology; there is a further 5.6 million euros to promote cooperation with other countries in the context of the EU Directive on renewable energy.
In line with the key principles for the a successful implementation of the energy transition agreed on 1 July 2015, a number of additional energy-efficiency measures undertaken in the buildings and industrial sectors and by municipalities are to begin to qualify for funding from the Energy and Climate fund (including 100 million euros worth of funding for the improvement of pumps and heating systems) as of the 2016 Economic Plan. The same applies to the National Action Plan on Energy Efficiency (165 million euros for the incentive programme for energy efficiency; 50 million euros for auction-based procurement in the field of energy-efficiency). This shows that further packages of energy-related measures have been pooled within the Energy and Climate Fund.
Overall budget cut
Some 75 million euros worth of savings are to be achieved across all items as the 2016 budget is put into practice (2015: 62 million euros).