Tackling the climate emergency requires economic transformations of unprecedented scale and speed. But while the OECD’s International Programme for Action on Climate has registered 105 countries with carbon neutrality targets, often by 2050, many are off-track to meet those targets. Indeed, at the global level, climate actions are currently falling short of the measures needed to match the Paris Agreement goals.

With the decision by the Hamburg Chamber of Commerce (HCC) to reach climate neutrality by 2040, Hamburg’s business community has decided to tackle the climate challenge head-on, not least because future-proofing business plans and investments that are consistent with climate neutrality will help seize opportunities and save substantial costs. This report shows what reaching climate neutrality means for Hamburg businesses and identifies key actions they need to undertake.

Chapter 1 aims to make the 2040 climate neutrality target of the Hamburg Chamber of Commerce operational. This chapter starts with laying out what climate neutrality means for Hamburg businesses, providing the national and regional context of climate targets and drawing on international best practice recommendations. The chapter examines available data on greenhouse gas emissions, energy use and the sectoral composition of Hamburg’s economy. Net-zero targets and action plans of other industrial port cities – Rotterdam, Stockholm and Seattle – with similar decarbonisation challenges offer valuable insights for identifying obstacles and opportunities in the transition to climate neutrality. Finally, the chapter highlights the potential co-benefits of local climate action for well-being and competitiveness, which can exceed the transition costs. It showcases how rapid progress in the decarbonisation of urban passenger transport can deliver such benefits.

This chapter analyses key steps businesses can take and the transformations they need to engage to achieve climate neutrality by 2040, across all sectors of the Hamburg economy. It begins by assessing the current progress of Hamburg businesses in implementing net-zero greenhouse gas emission strategies, drawing insights from a survey of selected companies as well as evidence from major companies in Hamburg. This evidence is then compared with international best-practice recommendations. This chapter also assesses specific challenges for SMEs and on the role networks can play to advance SME efforts to decarbonise. Last, this chapter explores how businesses can harness the benefits of low cost renewable energy by adapting to their intermittent nature, as well as urgent action to decarbonise buildings to avoid unnecessary cost.

The port of Hamburg has taken a leading role in reaching climate neutrality by 2040. This chapter shows that Hamburg's strategic location can turn it into a major climate-neutral transport centre, building on its strong rail infrastructure. In this way Hamburg can deliver climate-neutral transport services client businesses need throughout Western and Central Europe quickly and at low cost. This includes harnessing its potential for a hydrogen hub. The transition to zero-emission fuels for international shipping therefore needs to be prepared now. This will raise costs by 2030 on account of initially higher fuel production cost and needed investment in zero-emission shipping, but an energy-saving fuel mix may help keep longer-term costs and trade flow impacts modest. Maximising the use of rail would deliver benefits beyond Hamburg. It requires addressing railway infrastructure bottlenecks and digitalization. Quick major steps towards electrified road transport are also needed, with electric charging infrastructure and continued efforts to improve logistics. Hamburg can play an important role in delivering imported green hydrogen and hydrogen-derived products, via pipelines or ships, to serve demand in local industry and shipping as well as in neighbouring industrial regions.

Chapter 4 first argues that moving towards a circular economy can effectively contribute to achieving climate neutrality in the business sector and shows the role of the business sector in the transition. The chapter then analyses current and planned circular economy initiatives led by the Department of Environment, Climate, Energy and Agriculture of the City of Hamburg (BUKEA). It provides an international literature review on the role of the business sector in promoting the circular economy, highlighting the main barriers to implementation. The chapter concludes by illustrating how the City of Hamburg and the Hamburg Chamber of Commerce can promote the circular economy through new business models.