The issue of “environmental protection” is not a new topic on the international stage. The first environmental agenda was introduced at the United Nations Conference in Stockholm in 1972. However, the development of global crises, such as the impacts of the COVID-19 pandemic and the Russian-Ukrainian conflict, has brought this issue back into focus. In response, many countries, including Germany, have launched initiatives and enacted laws to support environmental protection. Notable examples include the German Energy Efficiency Law, the 2021 amendment to Germany’s sustainability strategy, and on a European level, the 2020 European Green Deal.
As a modern and effective means of achieving environmental goals, innovation processes have been closely linked with environmental protection. In this context, the German Federal Environment Agency published a report in 2024 on the role of German innovative approaches in environmental conservation, comparing them with international efforts. The report reveals the rising international geopolitical race concerning innovation processes in environmental protection and Germany’s position within this race. These innovation processes refer to both research and development (R&D) and patents. The report’s assessment is based on data from the Organization for Economic Co-operation and Development (OECD) on government spending in R&D for environmental protection and energy efficiency.
Environmental Innovation Processes:
According to the German Federal Environment Agency’s report, innovation processes are divided into two categories: research and development, which focuses on increasing knowledge to achieve economic goals at lower costs, and patents, which are naturally produced from dedicated research and development. The pressing need for innovation processes is highlighted by structural changes in environmental goals. Previously, the focus was on primary environmental issues such as waste, water, soil, and noise. Recently, attention has shifted towards the importance of using renewable energy sources, followed by a focus on energy efficiency and the development of modern energy storage methods for future use.
According to the OECD, government spending on environmental R&D by its member countries was estimated at nearly 9 billion USD in 2021. This marks a slight increase from the 8.6 billion USD spent in 2020, following a decline in 2019. Thus, the spending trend has seen a gradual upward trajectory from 2010 to 2021. However, when comparing the financial allocations for environmental R&D with overall R&D spending, the report arrives at somewhat disappointing results. In 2021, environmental R&D accounted for only 2.3% of total R&D spending.
In the European Union, spending trends have undergone several phases. Government spending on environmental R&D, relative to overall R&D allocations, decreased from 2.8% in 2010 to 2.4% in 2019. However, the percentage rose again in 2021, returning to 2.8%. Notably, several EU countries, such as Germany, Greece, and Portugal, did not reduce their environmental allocations. These countries continued their upward trend in allocations, surpassing the average spending of the EU and the OECD. In 2021, Germany allocated 3.4%, Greece 3.7%, and Portugal 4.3% to environmental R&D.
Regarding energy allocations, the German Federal Environment Agency’s report notes that R&D spending by EU countries in the energy sector accounted for 5% of total R&D spending. Consequently, energy research holds a relatively high position compared to environmental research. This focus on energy research is not limited to the European Union but also extends to the United States and Japan, with the latter placing significant emphasis on nuclear energy.
Environmental research focuses on areas such as water resource management, soil and groundwater treatment, waste management and recycling, noise and acoustic pollution solutions, and the recycling of plastics and metals. Energy research efforts, on the other hand, have been directed towards developing renewable energy strategies. From 2019 to 2021, most countries intensified their research on solar energy, wind energy, and bioenergy. For instance, Germany allocated its R&D spending as follows: 41% on solar energy, 31% on wind energy, and 20% on bioenergy.
Environmental R&D is of immense importance to Germany, especially given the challenges of energy transition and gas shortages caused by the Russian-Ukrainian war. As a result, research projects have gained significant momentum. Between 2009-2011 and 2019-2021, research projects doubled by 90%, with a simultaneous increase in project size and funding by 120%. The energy sector accounted for about 46% of newly launched research projects during this period. Increasingly, private companies have initiated research projects with an environmental focus.
German universities have also paid attention to providing funding for research projects. However, their budgets were small compared to industrial projects. The federal government has not neglected its funding role either, significantly expanding its leadership position as a research funder (from 67% to 96%) by increasing funding from an average annual amount of 1.1 billion euros to 2.9 billion euros.
The Patent Race:
Patent shares are an important indicator of countries’ and international organizations’ contributions to technological fields aimed at achieving environmental goals. The German Federal Environment Agency’s report focuses on patents related to climate protection and the production of environmentally friendly goods between 2016 and 2020 to assess current contributions by countries and economic entities. Statistics reveal fierce competition among the four major countries in patent applications: Japan, China, the United States, and Germany. These countries account for over 50% of patent applications during the mentioned period. China excels in climate protection and related subfields, while Japan leads in energy efficiency. The United States ranks first in energy conversion systems, and Germany ranks fourth in climate protection technologies, while it holds the third position in other categories.
Regarding EU countries, the report highlights the emergence of several nations alongside Germany, such as Denmark, France, the UK, and Italy, with relatively high patent shares in climate protection and related subfields. The EU contributes about 37% of patent shares in climate protection technologies. When looking at detailed environmental technologies, there is little variation from the previous findings, with the United States and Japan leading, China surpassing Germany to take the third position, and Japan holding the top spot in air purification and noise protection in terms of patent shares.
The United States leads in wastewater treatment, water management, waste management, and overall recycling technologies and material management systems. China holds the largest patent shares in waste restoration and management, while Germany leads in metal recycling. Germany also tops the field in environmentally friendly goods, particularly in air purification, which is influenced by the automotive industry and its emissions. Germany’s leading role in this area stems from its strong automotive industry.
These statistics reflect the demographic and geopolitical distribution of patents but do not represent the percentage of environmental patents relative to total patents across all fields. When this percentage, known as the relative patent index for environmental protection, is examined, entirely different results emerge regarding the ranking of leading countries. Germany ranks first, with a much higher relative patent index (20%) in environmental protection compared to other countries with high numbers of environmental technology patent applications, particularly the United States, Japan, South Korea, and China.
However, Germany is not among the most specialized countries in environmental technology. Other countries with a higher degree of specialization, such as Denmark, Spain, Australia, and Norway, lead the way. The EU as a major global economic region has seen a continuous increase in its specialization in environmental technology since 2006. In the recent period from 2016 to 2020, the EU’s specialization was more evident than Germany’s.
Germany’s Innovative Ascent:
The report concludes that Germany is one of the key players in R&D, with spending exceeding 3.4%, more than the average spending of EU and OECD countries. However, Germany must continue its efforts to achieve its goals and compete with major players like the United States, Japan, and China. In terms of patent applications, Germany ranks among the world’s leading countries, holding the fourth position globally, preceded by the United States, Japan, and China, which have significantly larger contributions.
Germany excels in the number of patents aimed at climate protection but faces some shortcomings in water and waste management. In the circular economy, Germany enjoys a competitive advantage in metal recycling, with the highest global patent share in this field at 18%. It has also made significant progress in plastic recycling patents in response to the EU’s plastic strategy.
In conclusion, the innovation race in environmental protection is not balanced among major international players. There are indeed leading poles in this field, but due to the dynamics of competition, maintaining leadership cannot be guaranteed unless efforts in R&D and patents are intensified and directed towards environmental and energy goals. This means that winning the innovation race will remain a constant challenge for Germany and all other countries.
