Insights into Europe’s Biggest Economy 2 / 24

GERMANYNEW FUELSFOR A NEW ERA
German transportation and transport need to becomesustainable, creating huge demand for hydrogen andother alternative fuels.

WILLKOMMEN INDIA!

Germany is attracting moreinvestment from India withrelaxed immigration rules

Page 22

Page 28

O

BIG THINGS IN PHARMAThe US pharma giantthat is ramping up
investment in Germany

W u
el r
oo m
k
b a
an ack gaodm n t zinha
Pa rke e b e
ge t t igg is
32 ren est
2
ds st 0or!
iesGerman firm H2FLY is a step closer tomaking zero-emission commercial air
travel a reality.

Photo: Illing & Vossbeck Fotografie

FOCUS

NEW ­FUELSFOR A NEW ERA
Germany needs alternative fuels
for the sustainable transportation of the future.
Page 4“We’re proud that thispublication turns 20 thisyear. We look back at
two decades of changes
and developments.”
PHARMACEUTICALSINTERNATIONAL COOPERATION

Dear Reader,
Combatting climate change is not just about

Good Karma in
Biotech and Pharma

An Industrious
Partnership

The US pharma giant Eli Lilly is ramping up its
presence in Germany and investing in start-ups.

India and Germany are strengthening their tradeties, helped by legal reforms in Germany.

Page 22

Page 28

ENERGY

MORE ARTICLES IN THIS ISSUE:

Getting theBall Rolling
GTAI organizes trade trips throughout the year
for international companies thinking of expanding to Germany. Location scouting, networking
and market conferences are some of the activities on offer.
Page 18

Green Hydrogen: GTAI’s hydrogen expert on
where the opportunities lie....................... Page 12
Innovations: Sustainable mining, emissions
capture and novel MRI scanning.............. Page 16
Pharma Boom: What Germany is doing to
attract more foreign investment................Page 26
Markets Germany Turns 20! Two decades ofbusiness stories and trends....................... Page 32
Germany & Brazil: Two big economies that canhelp each other grow.............................. Page 34
How Germany Works: The rules for bringing
new drugs to market in Germany............... Page 35

Publisher: Germany Trade & Invest Gesellschaft fürDistribution: Markets Germany is distributed solely

Außenwirtschaft und Standortmarketing mbH, Fried-by the publisher all over the world.

richstraße 60, 10117 Berlin, T. +49 30 200 099-0,

Notes: © Germany Trade & Invest, June 2024

F. +49 30 200 099-111, office@gtai.de, www.gtai.com
Excecutive Board: Julia Braune, Chairwoman/CEO,
Dr. Robert Hermann, CEO

All information provided by Germany Trade & Invest
has been gathered with the utmost care. We assume
no liability, however, for the accuracy of the informa-

Director Corporate Communications:tion provided. Articles published under specific names

Andreas Bilfinger

do not necessarily reflect the opinion of the publisher.

Managing and Content Editor: Eva Forinyak

No reprints may be made without the prior consent

Editor: Jefferson Chase
Editorial Team Kammann Rossi/wortwert: Imogen
O’Rorke, Christoph Hus, Jürgen Jehle
Design and Layout: Arne Büdts, Verena Matl
Print: Kern GmbH, 66450 Bexbach,www.kerndruck.de
Circulation: 3,000of the publisher. Unless specified otherwise, the copyright for pictures is held by Germany Trade & Invest.

breaking old habits, but coming up with totally
new ways of doing things. Innovation and invention will play a huge role in Germany’s transition
to clean energy. The same is true, of course, of thefuel we use for transport and transportation —which is the focus of our lead story in this editionof Markets Germany. Clean and sustainable fuels
are particularly important for Germany because
it’s not only Europe’s automotive powerhouse
but also the continent’s central transport andlogistics hub.
Pharmaceuticals and biotech are also key to Germany’s economic future. The German government
regards this sector as a central pillar of German
industry going forward. A series of legislativereforms is already in place to make it easier forcompanies that develop and test drugs in Germany — and those efforts are paying off. One of
the world’s leading pharma firms, Eli Lilly andCompany, is planning to massively expand its
activities in Germany — perhaps a sign that thecountry is ready to resume its historical role as“the world’s pharmacy.”
Finally, we’re very proud that this publication
turns 20 this year. So we’re taking
the opportunity to look backat two decades of changes and development— both for the magazine and Germany
Take part in the Markets Ge
rmany
reader surv
itself. So please enjoy
ey and help
us to improveyour experienceofthe magazine!
this issue of Markets
https://sur
Germany. We hope it
vey.lamapoll.de/reader-surve
y-marketsgives you lots of “fuelgermany-20
24
for thought.”

YOUR
OPINION
COUNTS!

Order number: 21400
Main cover: picture alliance/
Cover Images | H2FLY/Cover Images
Cover India: picture alliance/
REUTERS | VIVEK PRAKASH

Dr. Robert Hermann, CEO
Email: invest@gtai.dePhoto: Zeotap

Projjol Banerjea moved to Berlin in
2020, where he met his business
partner and set up Zeotap, aninnovative customer data management platform that is now used by
Amazon and Virgin Media O2.

PROJJOL BANERJEA: CDO AND CO-FOUNDER, ZEOTAP
Customer data is like gold dust for companies. Used correctly, it enables them toanalyze their customers’ behavior to givethem a better experience with personalized
offers. Ten years ago, Projjol Banerjea and hisbusiness partner Daniel Heer recognized therising value of customer data and founded
Zeotap, a Berlin-based company that operates an innovative customer data platform.
Banerjea grew up in India, earned an
MBA in the UK and moved to Berlin in 2010
to work for Fyber, a small venture-capitalbacked company in the mobile marketing
sector. He met Heer in 2014 and connected
immediately: “We were both deeply curious
about the data space, so a customer data focused idea seemed predestined,” Banerjea
recalls. They founded Zeotap that same year.
Due to its strict data protection and compliance regulations, Germany is an ideal in-

ternational test location. Location has proved
an advantage for Zeotap over US providers in
Europe, which often do not fulfill the strict
requirements of the market.
“Germany and, in particular, Berlin also
helped us overcome two of the biggest hurdles most people face in the first stages of anentrepreneurial endeavor: finding partners
and investors,” says Banerjea.
The marketing technology company
raised more than USD 100 million in total
to develop its platform. It went on to build asolid customer base of over 80 of the world’s
top 100 brands, including Amazon, Nestlé
and Virgin Media O2, and now operates in 14
countries with eight offices. Zeotap achieved
a 150 percent annual growth from 2022 to2023. And the trend is set to continue, as its
latest product, ID+, provides a data solution
for cookie-less browsing.

Quick facts
NAME

Projjol Banerjea

JOB TITLE

Chief Digital Officer 		(CDO)

QUALIFICATION 	M.Sc. in Human-­Computer Interaction,
MBA, Saïd Business
SchoolCOMPANY NAME

Zeotap

MAIN LOCATIONS 	Berlin, London, Banga-lore (Other locations:­Barcelona, Milan, Mumbai, Paris, Madrid)

INDUSTRY ustomer data managec
ment/martech

STAFF

180+

CLIENT BASE	70+

4

MARKETS GERMANY | Focus

NEW­FUELSFOR A
NEW ERATo protect the climate, the race is on to find more sustainable
alternatives for transport vehicles, planes and ships. It’s animperative that will open many business opportunities inGermany, Europe’s largest economy, and has the potential to
be a game-changer in decarbonizing transportation.

MARKETS GERMANY | Focus

LEUNA100 A visualization of the world’s first pilot plant for the cost-efficient production of green
methanol. It's part of the Leuna100 project fundedin part by the German Ministry of Digital andTransport with EUR 10.4 million over three years.

L

Photos: Paul-Philipp Braun, C1

GREEN METHANOL Volker
Wissing (left), German ministerfor digital and transport, andChristian Vollmann, CEO of
C1 Green Chemicals, open theLeuna100 methanol plant.

LEUNA
SAXONY-ANHALT

ast year, on German test sites, two German Aerospace Center (DLR) to mark the
major breakthroughs occurred that launch of its new “flying hydrogen laboratory.”
have the potential to rewrite the hisThe same month, validating the potential
tory of transport. In November, exactly 100 of these new fuels, H2FLY, a company foundedyears after engineers from the chemical giant by five DLR engineers, successfully completBASF produced the first commercial methanol ed the world’s first piloted flight of an electric
out of coal, a pilot plant opened in the eastern aircraft page 7 powered by liquid hydrogen.
German town of Leuna, ready to produce regen- It’s part of an international joint venture callederative marine fuels from non-fossil feedstocks HEAVEN, spearheaded by the DLR.
CO2 and green H2. The
Pipistrel, an elecGerman Minister oftric aircraft manuTHE BOTTOM LINE
Digital and Transfacturer from Sloport, Volker Wissing,venia, was involved
Germany’s transport industry is
was there to celebratewith the collaboraincreasingly aware that fightthe inauguration oftion, and its direcing climate change doesn’t justthe new Leuna100
tor of engineering
mean putting more electric cars
facility,see aboveand programs, Tineon the roads — it means finding
which is central to theTomažič, remembers
new fuels for ships, planes andgovernment’s initiathe moment: “There’s
trucks to keep the world’s infrative to support thenothing more powstructure running. International
production of green
erful than making
companies can profit from thismethanol for airsomething happen
strategic shift.
planes and shipping.
because immediA couple of
ately the mindset ofmonths earlier, about four hours’ drive to the everyone changes,” he says. “That plane cannorthwest in Hamburg, another historic in- do three hours with zero emissions at speeds
novation in the future of fuel took place: the that are twice as fast as cars on the highway.
unveiling of a Dornier 328-100 airplane to be It is meaningful.”used to test hydrogen-based technologies. GerThe successful test flight had been 15 years
man Minister for Economic Affairs and Climate in the making. Tomažič remembers flying one
Action, Robert Habeck, was on hand at the of Pipistrel’s electric battery planes in the5

6

MARKETS GERMANY | Focus“WE DON’T HAVE MANY
NATURAL RESOURCES,BUT WE’RE GOOD AT PRODUCING THINGS .”.

Stefan Di Bitonto, GTAI’s automotive industry
expert, explains why Germany has a competitive
advantage over its European neighbors on e-fuels.

Why is Germany where the engines of the
future will be developed?
STEFAN DI BITONTO: There are several reasons. First of all, historical precedent: Germany
has been a country of engineers for a long time,and German engineering has always been abeacon for the country. Germany started to
specialize a long time ago, when it decided,“We don’t have much in the way of natural
resources, but we’re good at producing things.”
The “Made in Germany” economy got off theground. That’s created a lot of wealth in Germany.
On top of that, I think Germans decided
that, if we really want to stand out, then weneed to concentrate on the top technologies
available, because those are the ones that takemore effort to bring to life. So the country has
traditionally concentrated on a strategy of research and development, be it in mechanics,
pharmaceuticals or whatever.

How close are sustainable mobility technologies to being commercially viable?
SDB: We’ve obviously been researching thesetechnologies for a long time, but there has been
a lot of investment into the hydrogen strategy
in the last few years. Since the war in Ukraine,
Germany realized that it can’t keep relying onimporting natural resources from other countries. It therefore has great interest in researching these kinds of technologies.
The regional states on the coast — Lower
Saxony, Schleswig-Holstein and Mecklenburg
Western-Pomerania — are quite involved withhydrogen technologies for shipping. And in theautomotive sector, we see that Germany has
more than a hundred hydrogen filling stations,which is the most in Europe. I think that in

the next few years that infrastructure could
be used for commercial vehicles that travel
through the country.
Where in Germany are the most important
clusters for these new technologies?
SDB: It’s always where industry is. So for the
automotive industry it’s Baden-Württemberg
and Bavaria, and Lower Saxony for Volkswagen,and in the chemical industry it’s around North
Rhine-Westphalia and Saxony-Anhalt. These
are the powerhouses.

E-FUELS: THE MISSING LINK FOR
ACHIEVING EMISSIONS TARGETS?
Share of individual modes of transport in the
total greenhouse emissions of the transport
sector in the EU27

72%

Road traffic

What advantages does Germany have overits regional rivals in Europe?
SDB: Firstly, Germany is a very wealthy
country that is putting a lot of effort and a
lot of money — much more than its neighbors — into the research and developmentof H2 technologies. Secondly, we have a huge
number of engineers and staff who are able
to transform these assets into ideas and into
products. And finally, we have higher incentives, for instance the Temporary Crisis andTransition Frameworks (TCTF) program forforeign companies that want to produce or
do research and development here.
The TCTF is the European counterpart
to the American Inflation Reduction Act andpotentially matches whatever incentives areprovided in the US.
In addition, Germany has the GRW cash
incentives program. It essentially consistsof grants to help reduce investor costs. And
then there are national and regional state levelfunds for engineers employed by companies. So
there are plenty of combinations of incentives
available here. Germany certainly stands out
on that score.

14%

Shipping traffic

13%

Air transport

Source: European Environment Agency, 2019

MARKETS GERMANY | Focus

early 2000s when the maximum flying time
was only six minutes. Tenacity and patience
are key in this industry.
“Fifteen years ago, people were asking:‘How long is the cable you’re dragging behindthe plane?’” he says. “Today, Airbus is advertising that their next jetliner, the ZEROe, will
be powered by hydrogen. page 11 It’s an incredible change in mindset. The changeoverfrom horse to car took 40 years, so 15 years is
not a bad achievement.”

GERMANY LEADS EUROPE
IN H2 INNOVATION
EU countries with the largest share(worldwide) of hydrogen technology patentregistrations (2011 to 2020)
11 %

6%

Green methanol’s great potential
Leuna100 and the HEAVEN project are just two
examples of the pioneering projects being developed across Germany and in other countries

s
nd

e
N

et

he

rl a

nc
Fr
a

an
y
m
er
G

in response to the climate crisis. But to keep
up the momentum, large investments will beneeded sooner rather than later, as the company
behind the Leuna100 project, C1 Green Chemicals (www.carbon.one), knows only too well.

3%

Source: European Patent Office

7

C1 is working in tandem with Berlin researchcompany CreativeQuantum and the Leibniz
Institute for Catalysis (LIKAT). The project’s
scientists have created a high-efficiency catalyst that could revolutionize methanol production and will, with any luck, allow the company to produce zero-emissions fuel at scale
within the next five years. “A major chemicals
company would need about 15 years to get
this project to the market — we want to do it
in a third of the time,” says C1 CEO Christian
Vollmann.
Two years ago, Vollmann, a serial entrepreneur, was best known for his innovations in thedigital sector, having co-founded a dating site,a video platform, and then an online neighborhood connection network. More recently, the46-year-old decided to invest his energies into
tackling the climate crisis. So in 2022 Vollmannfounded C1, which in its own words wants to“write the next chapter of the methanol story.”

Photo: picture alliance/Cover Images | H2Fly/Cover Images

H2FLY is a step closer to making zero-emissioncommercial air travel a reality, having adapted
its HY4 aircraft to use liquid H2 ahead of groundtesting next year. The aircraft, which is currently
operated using pressurized gaseous hydrogen, is in
the process of being modified to receive a new liquid H2 tank, which will double the range capabilityof the aircraft.

MARKETS GERMANY | Focus

FDI PERSPECTIVE:
HYUNDAI MOBILITY GERMANY
Two years ago, a fleet of 27 brand new trucks hit Germany’s
roads — powered by Hyundai’s Xcient hydrogen fuel cells. The
heavy goods vehicles proved popular with German logistics,
manufacturing and retail companies because Hyundai is known
as a pioneer in hydrogen fuel technology. Hyundai, for its part,saw success in Germany as vital.
“Germany is the largest economic market in Europe, and it has thelargest truck park, after Poland, so you have to be in Germany if you
want to be a key player in Europe — which is why we decided to invest
here,” says Charles Cambournac, managing director of Hyundai Mobility Germany. “We truly believe that hydrogen is the solution for the
future when it comes to zero emission mobility, and more companies
are eager to break into this business.”
On top of that, adds Cambournac , Germany has a competitive government subsidies program, and Hyundai benefitted from support from
Germany’s Ministry for Digital and Transport (BMDV). The program
covered up to 80 percent of the cost difference between diesel- andhydrogen-powered trucks.
Hyundai’s biggest partner in Germany is Hylane, a hydrogen-powered
truck supplier that works together with logistics giants like DB Schenker
but also provides trucks to major German supermarkets like Rewe andEdeka. “Hydrogen is part of Hyundai’s long-term strategy, and we’rehere for the long run,” says Cambournac.

2020

Hyundai brings the Xcient Fuel
Cell onto the market

400 KILOMETERS

The maximum range of trucks
powered by the Xcient Fuel Cell

33 %of Hyundai Germany’s new carsin 2022 were battery-powered.

HITTING THE ROAD Hyundai’s first XcientFuel Cell-powered trucks are the world's first
serially produced HGVs with H2 fuel cell electric drives. A total of 50 Xcient trucks will be
deployed in Switzerland in 2024 with a targetof 1600 by 2025.

Photo: Hyundai Motor Deutschland GmbH

8

MARKETS GERMANY | Focus

9

Photo: Proton Motor Fuel Cell GmbH

Photo: picture alliance/dpa | Axel Heimken

ALL THE WAY TO ZERO: The world’s firstlarge container ship to be powered by green
methanol, the Ane Maersk, docks at the Eurogate Container Terminal in Hamburg. The ship,
which is owned by the shipping company
Maersk, was built by Hyundai Heavy Industries in South Korea and has a capacity ofmore than 16,000 standard containers.

“About two and a half years ago I met the inventor behind what we’re doing here, Marek
Checinski, a quantum chemist, who used
quantum simulations to invent this new catalyst at a computer,” Vollmann says. “He hadregistered the patent but didn’t know exactly
what to do with it.”That is a common story among researchersin Germany, says Vollmann. “We have very
good scientists here; between around 1900 and
1930, the Germans invented almost everythingthat is still being used today,” he says. “Butwhat we’re not so good at any more is founding companies out of that — and scaling thattechnology to the market.” That’s what C1 istrying to do. “We’re trying to bring together thebest out of two worlds: combining the speed
and can-do attitude of the start-up world with
scientific expertise,” he says.
There is already major interest in the technology from shipping giants like Møller-Mærsk,which has ordered more than 20 ships withengines using the new fuel. The Danish multinational, one of the world’s biggest shipping“What [clients]
want is proximity
and close cooperation with theirpartners, as well as
service and maintenance. That’s
what we provide.”
Manfred Limbrunner,
Director of Investor Relations and­Communication at Proton Motorcompanies, is also one of C1’s many investors
and in January 2024 held a naming ceremony
for the world’s first large methanol-enabledcontainer vessel, the Ane Mærsk. see above“What makes Germany so special,” Vollmann points out, “is that, once again, we invented the method, and that means we connect with our century-old history of chemical
expertise.”Hydrogen solutions
Germany is a hotbed of hydrogen tech expertise. According to the European Patent Office,no other EU country has logged as many patents in this area.
“Harnessing the potential of hydrogen isan essential part of the European strategy toachieve climate neutrality by 2050,” said António Campinos, president of the European Patent Office, in a study last year. “But, innovation
in a wide range of technologies is still urgently
needed if hydrogen is to play an importantrole in reducing CO2 emissions and tacklingclimate change.”

10

MARKETS GERMANY | Focus“Germany plays a key role for us
in the ramp-up of the hydrogen
industry, as it is an importantdriver for achieving EU climate
targets.”
Cyril Dufau-Sansot, CEO of Hy2gen

FOUR TECHNOLOGIESWITH SERIOUS GROWTH­POTENTIAL IN GERMANY
HYDROGEN
Germany has more hydrogen tech patents than any
other EU country — the know-how is here, as are
the subsidies to take new concepts to market.

GREEN METHANOL
The world’s first commercial methanol facility
was built in Germany in 1923. Today, non-carbon
versions of the fuel are booming.

AMMONIAThe potential for ammonia-based technology has
been known for decades; now there’s new urgency
in the research.

RENEWABLE NATURAL GAS

Photo: Cision

More and more companies are exploring the possibilities of clean biomethane in Germany, including
for engines.

That is exactly the line taken by Manfred Limbrunner, Director of Investor Relations and Communication at Proton Motor, page 9 a German
company with 25 years of experience in sustainable fuel technology, now wholly owned
by its UK parent company, Proton Motor Power
Systems. The entire industry needs to be readyfor a seismic shift, says Limbrunner, “if we really
are taking the target seriously.” He continues:“We have to prepare for this shift — that means
everyone in this sector has to invest now to beready for that growth.”
Proton Motor Fuel Cell is currently concentrating on the European B2B market, deliveringhydrogen fuel cell systems for the stationery
and mobile segments to partners all over Europe. The company knows that they have a
lot to offer.
“Clients are always looking around Europe
and asking: Where are the technology providers
with a European supply chain who can provide
systems like this?” Limbrunner says. “And if
you look around Europe — in our performanceclass, with the development and service we
can offer — there aren’t many. What they want
is proximity and close cooperation with theirpartners, as well as service and maintenance.
That’s what we provide.”A wealth of new fuels
Hydrogen is of course just one of many new
fuels being developed. Just how many there
are becomes clear from a glance at the products offered by Hy2gen. Originally foundedin Germany in 2017, Hy2gen is now a global
developer and financier of e-fuel plants, withlocations across Europe and North America,
producing ammonia, hydrogen, methanol,
synthesized carbon-neutral kerosene and renewable natural gas. All harness waste heat intheir production process.
Late last year, the Norwegian branch of
Hy2gen signed a memorandum of understanding with Amogy, a US ammonia power solutions company, to work together to develop
renewable ammonia-based power technology
for shipping. Like hydrogen, the potential ofammonia as a power source has been known
for decades, but the climate crisis gave it renewed urgency.
“The partnership with Amogy was initiatedby the Norwegian branch of Hy2gen,” Hy2gen
CEO Cyril Dufau-Sansot see top left explains.
“We are very pleased that Amogy is supporting us as a renowned partner in Norway andMARKETS GERMANY | Focus

would very much welcome an expansion ofthis co-operation to other countries.”
Dufau-Sansot says Hy2gen wants to make aglobal contribution to decarbonization. For thatreason the company has expanded to Norway,
Canada and France. But Germany, and specifically the area around the southern city of Wiesbaden, remains the heart of the firm’s operations.
To that end, Hy2gen recently acquired a plant for
producing renewable hydrogen and e-methane
under the name ATLANTIS in the town of Werlte.
Further projects are to follow soon.
“For us, Wiesbaden in particular combines
an employee-friendly region, internationalism
and a central location in Germany and Europe,”says Dufau-Sansot. “Germany plays a key rolefor us in the ramp-up of the hydrogen industry, as it is an important driver within the EU

55 %The European Union’s reduction
goal for carbon emissions by
2030 (base year 1990)
Source: European Commission

200,000
Minimum number of tons of sustainable paraffin to be produced
by 2030 in Germany

countries for achieving the EU climate targets.”
But for all the optimism and technologicalinnovation, the bottom line is that the path
to commercialization for hydrogen solutions

Source: German Government

11

remains complex, particularly in the current
global economic situation.
Limbrunner, of Proton Motor Fuel Cell,cautions: “Everyone’s talking about the hydrogen fuel cell market, though we have to see
clearly that at the moment it’s not a market,
it’s the idea of a market. But it will become amarket. That’s why I think at some point thisshift needs to come, because the market needs
to develop, and without hydrogen and fuel cells
the climate goals can’t be achieved.”

Interested in bringing yourbusiness to Germany?
CONTACT
stefan.dibtonto@gtai.de
GTAI expert for automotive& mobility
rainer.mueller@gtai.de
GTAI expert for aerospace

Photo: picture alliance/dpa/Airbus

AIRBUS ZEROE: A illustration of a hydrogenpowered Airbus aircraft for 200 passengers. The
blended-wing body’s exceptionally wide interior
will open up multiple options for H2 storage anddistribution. The European aviation conglomerate
aims to bring to market a passenger aircraft with ahydrogen propulsion system by 2035. The projectwill require investments in the eleven-figure range.

12

MARKETS GERMANY | Focus“THOSE WHO ARE
HERE ARE SETTING
STANDARDS.”
Green hydrogen is considered one of the key technologies
for decarbonizing industry and mobility in Europe. ­Germany
is working flat out to expand its hydrogen network, andH2 projects are being developed throughout the country.
Raphael Goldstein, a hydrogen expert at Germany Trade &Invest, explains where the most exciting business opportunities lie for international companies.

The German government’s National Hydrogen Strategy positioned Germany in theory to take a pioneering role in Europe’s H2economy. How does it plan to achieve thisin practice?
RAPHAEL GOLDSTEIN: The National Hydrogen Strategy, which was published in 2020,
aims to establish hydrogen (H2) as a primarymeans of decarbonization in order to accelerate
the transition to a sustainable society. In addition to the production of green H2, the focus
is particularly on comprehensively expanding
infrastructure for the transport and storage ofhydrogen. To this end, the strategy is aimed at
all players along the H2 value chain, from production and import to transport, storage andfurther processing. The business opportunities
for companies are therefore manifold.

THE BOTTOM LINE
Thanks to its central location in
Europe, its focus on decarbonization and its well-developed
gas pipeline network, Germany
is a top location for the greenhydrogen economy — along theentire value chain from production to processing.
Will the strategy give Germany a unique H2advantage over its neighbors?
RG: What is established in the growing H2market in Germany will be the blueprint forother markets — those who are involved here
are setting standards. Even apart from the
National Hydrogen Strategy, Germany is al-

ready a valuable market for the H2 industry.
Many people think of hydrogen in terms of fuelcells for the mobility of tomorrow, but it is also
used as a substitute for fossil resources in thechemical, petrochemical and steel industries.
Therefore, in combination with the country’s
decarbonization targets, this is very good news
for the green hydrogen economy, as Germany
is a leader in those industries.
So it’s sunny skies ahead for the hydrogen
economy in Germany?
RG: A clear path might be the better metaphor. It is expected that by 2030, Germany will import 50 to 70 percent of the H2 itneeds. It’s therefore important to develop
the necessary import infrastructure now.
Major business opportunities currently ex-

MARKETS GERMANY | Focus

GERMANY’S
H2 NETWORK

13

PUTTING THE
H2 ­ECONOMY ON THE
MAP IN EASTERN­GERMANY.

A latticework of hydrogen pipelines will link up green H2
production plants with chemical refineries and steelworks
across the Federal Republic of Germany.

ROSTOCKHyTechHafen Rostock
Electrolyzer on the site of a former coalfired power plant, 100 MW capacity, to becommissioned by 2027

LubminKiel

Rostock
Greifswald

WESTERN POMERANIAGREIFSWALD

Schwerin
Hamburg

Lhyfe electrolyzer in Lubmin/Greifswald, 800 MW, to be commissioned by
2029

Schwedt
BremenUCKERMARK
Raffinerie Schwedt: Production of greenhydrogen planned at PCK refinery

BerlinPotsdamHannover

Magdeburg

SAALEKREIS,BURGENLANDKREIS

Schkopau

Chemical industry in Leuna, Schkopau,

Zeitz
ErfurtCologneWiesbaden
Mainz

Leipzig

Leuna

Düsseldorf

Zeitz

DresdenFraunhofer Hydrogen Labs, Leuna (+Bremerhaven and Görlitz)
DLR Leuna: Power-to-liquid technology
platform, research on e-fuels by the German
Aerospace Center (DLR)

Frankfurt

Planned hydrogen core network(as of November 2023)
existing pipes to be shifted to H2
new pipes

Saarbrücken
European Hydrogen Backbone 2030

Stuttgart

Main points of H2 consumption
refineryMunichchemical industry
steel industry

14

MARKETS GERMANY | Focus

Photo: picture alliance/dpa | Sina Schuldt

BRAKE
LOWER SAXONYAt the inauguration of an H2 production facility
in the port of Brake, the partners break ground(left to right): Alexander Bedrunka (Lower Saxony
H2 Network), Tim Eshold (Glencore Nordenham),Holger Banik (MD, Lower Saxony Ports), Olaf Lies
(Economic Minister of Lower Saxony), Luc Graré(Lhyfe), Michael Kurz (Mayor of Brake).

ist in the production, import and transportof hydrogen. For example, the US company
Air Products is investing over EUR 1 billion
in an import terminal in Hamburg. Dutch
and Belgian companies such as Gasunie andFluxys are involved in the expansion of thehydrogen core network, which will connect all
major consumers and producers in Germany;
while Lhyfe from France and VoltH2 from theNetherlands have announced investments inelectrolysis capacities for the production ofgreen hydrogen. These are first steps. In thenext phase, the companies that process greenhydrogen — i.e., the H2 consumers — will
also find considerable advantages to being
located in Germany. These might be chemical companies, for example. Compensation
mechanisms like CCfDs are being set up forthis purpose.

In which industries are the most exciting
H2 opportunities arising?
RG: The German government wants to seearound 10 GW of electrolysis capacity installed by 2030 — this creates tangible business opportunities for hydrogen producers
and manufacturers of electrolyzers. Also, newgas-fired power plants are required to be H2ready. Construction of them will be put out
to tender. Companies who can supply thistechnology will be ahead of the game. Furthermore, while it may not be enshrined inlaw yet, the public sector is readying itself
to buy decarbonized products such as steel
made with green hydrogen. This augurs wellfor producers of green steel or preliminary
products and the key technologies. For shipping, hydrogen will most likely be imported in

the form of ammonia, so multiple “crackers”
will also be needed in Germany to convert theammonia into hydrogen.
The German chemical industry, for instance in Leuna, in the east, is strong. Whyis the industry so vital in the H2 value chain?
RG: In the so-called chemical triangle, which
includes Leuna, there is already a hydrogengrid. The industry there does not need to betaught what to do with hydrogen, as it is already a key element of the business model.
Moreover, there are strong legal incentives likethe EU’s Renewable Energy Directives, which
will automatically lead chemical refineries touse green hydrogen. There is already the necessary skilled labor for handling hydrogen inthis part of Germany.

MARKETS GERMANY | Focus

FUNDING INSTRUMENTS

technical storage potential for H2 in Europe
and could quickly become a hub for tradinghydrogen on the continent. Companies involved in infrastructure here can step into thisgrowing market, currently worth EUR 32 billion
when we include the development of storage
assets. To expand the H2 network, pipelines,
compressors and sealing materials are needed,while infrastructure operators for networks
and storage are also in demand.

The German government is providing an additional EUR 100 million over a period of five
years to promote additional projects and isproviding some EUR 50 million for supporting
investments related to the reorganization of
port infrastructure.

€750M
subsidiesavailable

By 2032, a core H2 network more than 9500
kilometers long is set to connect all major feeders with all major consumers inGermany. What’s the status of this hugeinfrastructure project?
RG: The hydrogen core network will be the“highway” of pipelines connecting important industrial centers, storage facilities, power plants and import corridors to the central
national H2 supply by 2032.
To make the “H2 highway” a reality, Germany must build new pipelines and repurpose
existing ones. The target is to have 1800 kilometers of hydrogen-ready pipelines by 2027/28.

RAPID GROWTH
Predicted demand for hydrogenin Germany (in TWh)

400

250
200

100
50

Are there special subsidies for projects relating to H2 infrastructure?
RG: Firstly, there are PCIs (Projects of Common Interest). These include, for example, H2pipelines between two European countries. But
there are further financing instruments along
the entire hydrogen value chain such as IPCEIs(Important Projects of Common European Interest). These are joint state-subsidized projects
between European companies.
One instrument (see box “Funding instruments”) that primarily benefits investors in
the Rostock, Greifswald/Lubmin, Schwedt andLeuna regions is GRW funding (GRW: Joint
Task for the Improvement of Regional Economic Structures). Anyone launching projects
to produce electricity and green hydrogen for
self-consumption in these regions can benefit from GRW funding until 2032. Another EU
funding framework called TCTF (Temporary
Crisis and Transition Framework) is aimed at
the production of technology and products forthe generation and storage of green hydrogen.
That list is anything but exhaustive.

In other words, Germany is investing in
the foundations of a future H2 economy inEurope?
RG: Germany is the largest economy in Europe.
If we start seriously focusing on hydrogen, thenthat is a signal.

130

150

55

30

0

20

scribed as the “green power bank of Germany”: the coastal regions around Rostock andGreifswald/Lubmin as well as Leuna and theindustrial regions around Schwedt in Brandenburg. Cross-border H2 infrastructure is
being developed in the port regions whichconnect with Scandinavian countries, as is
on-site electrolysis capacity on the Baltic sea.
The H2 core network will connect these regions

300

23

RG: Four regions in particular could be de-

350

350

20

Which regions are on course to becoming
H2 hubs?

with the industrial complexes and refineries
around Schwedt and Leuna. In future, a lot ofhydrogen will be consumed there that cannot
be produced entirely on site.

50

RG: Germany accounts for 42 percent of the20

What makes the technical infrastructurefor H2 in Germany so special?

Companies that want to produce renewable
H2 for their own use are eligible for a special
subsidy program in some regions of Germany.
National and regional state governments areproviding a total of EUR 750 million over the
next 15 years to encourage investment in the
Saale, Burgenland, and Uckermark regions,as well as Western Pomerania-Greifswald
districts and the city and district of Rostock.

Source: German Ministry for Economic Affairs
and Climate Action

Want to learn more?
CONTACTraphael.goldstein@gtai.de
GTAI expert for green hydrogen

15

INNOVATIONSYOUROPINION
COUNTS!

e Markets
Take part in thader survey
Germany reprove
and help us im
nce ofyour experie!
themagazine

The global business community admires the spirit of invention
that drives the German economy. Here we highlight some of
the most intriguing trends and research projects.

Neoscan’s next generation
MRI scanning system is more
powerful, more compact,robust and sustainable.

MEMBRANE WOUND ­TREATMENT
An innovative “electrospun” mesh will speed up the healing
process for injuries

Photo: Neoscan Solutions GmbH

Large wounds and burns require regular dressing changes and take a long time toget better. A team of researchers from the Fraunhofer Institute for Silicate Research(ISC) in Bavaria and the Fraunhofer Institute for Toxicology and Experimental
Medicine (ITEM) in Lower Saxony have developed a novel “electrospun membrane”
that helped wounds heal and is bioresorbable in the body.
When the fiber fleece with a silica gel membrane is placed in the wound andcomes into contact with healthy skin cells, it stimulates connective tissue cells.
“These fiber systems imitate the extracellular matrix, the fiber structures foundin connective tissue, in the body and are very well tolerated by human cells fortissue regeneration,” explains Bastian Christ from the ISC. “They cause no foreign
body reactions and no internal scarring.” Initial results are promising. In clinical
trials, almost all diabetic foot wounds healed within six to eight weeks. However,further tests are needed before the product can be submitted for approval.
isc.fraunhofer.de, item.fraunhofer.de

Wounds heal faster with
Fraunhofer’s novel electrospun membrane.

Magnetic resonance technology from Madgeburg
will i­ mprove brain scans
Neoscan Solutions, a med tech company based in the eastern city of Magdeburg, is developing completely new MRI scanning systems.
The magnet used in the MRI technology is far lighter and more compact thanthose used in conventional MRI systems and can generate and withstandmuch higher magnetic fields without losing its superconducting properties.
The magnetic resonance tomograph will also be 14 Tesla strong, comparedto the previous record of 11.7 Tesla. The stronger the magnetic field, the more
precise the images produced.
Furthermore, it’s the only high-field magnet that doesn’t need liquid helium
for cooling. The start-up aims to set new sustainability standards: the newmagnet can be repaired and recycled, unlike conventional magnets, whichcost millions to replace.

Photo: Fraunhofer ISC

WORLD’S MOST POWERFUL MRI

CLEANER BRAKE DISCS FOR CARS
Researchers in Dresden want to reduce one of the causes ofroad pollution

Neoscan has already found its first major customers. Research institutes in the
Netherlands, funded with EUR 19 million from the Dutch science organisation
NWO, have ordered the new magnet. It will be used at Radboud University
Nijmegen for basic research in neuroscience about how the brain works andhow to cure diseases and tumors.

Researchers at the Fraunhofer Institute for Manufacturing Technology and Advanced
Materials have developed super brake discs that emit virtually no particulate matter.
“We expect a reduction in particulate matter of more than 98 percent,” says project
manager Johannes Trapp. The new brake discs are made of ceramic-reinforced
metal composites (metals and other elements coated with ceramics) that are onethird lighter than conventional steel brake discs. Because of their light weight, thediscs also promise to reduce automotive fuel and power consumption. A market
launch is in the offing, and serial production is planned for 2030.

www.neoscan-solutions.com

Ifam.fraunhofer.de

81%

POSSIBLE ENERGYSAVINGS IN AN
OFFICE BUILDINGWITH THE FRAUNHOFER FACADE

SMART HOUSE EXTERIOR
The exteriors of the future will be multifunctional climate control systems
Outside surfaces of buildings are playing an increasingly important role in sustainable construction,and the Fraunhofer Institute for Building Physics
in Upper Bavaria has been quick to recognize thisand act on the trend. A team there has developeda three-story modular test facility for energetic andindoor environments. It’s known as VERU. The newfacility will enable researchers to try out solutions
for increasing resilience to climate change: outside
surfaces that can keep out wind and weather, letin light, regulate temperature and generate energy.

Database architecture thatmimics human brain functions can make predictions
about vast data sets.

DATABASE OF THE FUTURE
Database architecture from Saxony functions like the h­ uman brain
Cortex, a tech start-up from the northwest German
town of Isernhagen, has developed a novel approachto database architecture. The groundbreaking system
is named after the cerebral cortex because it mimics
human brain functions. Unlike most databases, which
process data retrospectively, the brain first makes
predictions and then uses certain aspects and contexts to check whether they are confirmed. The Cortex database mirrors this process, taking into accountthe formation of relationships between even vast

amounts of data from the outset. Co-founder and
CEO Jan Buss says, “We have solved a fundamental
problem of information processing in such a generic
way that it can be used to solve a whole range ofchallenges.” The system’s architect, Peter Palm, sadly
passed away recently, but his invention will live on
to address the big data challenges of the future.
www.cortex-ag.com

For example, the researchers are working on photovoltaic modules as an all-in-one solution for heating,cooling and ventilation and on vertical greening
systems using grasses, flowers and herbs. They areeven looking at biomass production based on algae
farms. “With VERU, we can visualize and simulate
numerous conditions and circumstances on and in
the building envelope as well as in the individualrooms, evaluate them and process the results,” says
team leader Herbert Sinnesbichler.
ibp.fraunhofer.de,umsicht.fraunhofer.de

SUSTAINABLE MINING

EMISSIONS CAPTURE

An eastern German start-up is launching an innovative mapping process for mining

Researchers at one of Germany’s top
universities are developing a polymer

Photo: TheiaX GmbH

Drones and robotic explorers
can map natural resourcesthat are hard to access.

The mining industry is facing twin challenges: increasing
demand for high-tech metals as well as pressure to
reduce the negative impact of mining on the environment. TheiaX, a spin-off from the Helmholtz InstituteFreiberg for Resource Technology (HIF), offers a solution:a mapping process for the sustainable exploration andextraction of raw materials.

filter for capturing CO2 emissions

With interest in mining solutions running high, TheiaX
hopes to grow from 13 to 20 employees within thenext three years.

The DeKarbon research group at the Friedrich
Schiller University in the eastern German city of
Jena is investigating how to reduce carbon dioxide
emissions into the atmosphere. The researchers
are focusing on an innovative carbon capture andutilization (CCU) method. “We are developing newpolymer materials that can filter out and bindthe greenhouse gas,” explains project leader Prof. Martin Oschatz.
Captured CO2 can then be
used as a raw material toproduce methane, gasoline, diesel, paraffinand chemicals. The
state of Thuringia isproviding nearly one
million euros for the
project, which will run
until the end of 2025.

www.theiax.de

chemgeo.uni-jena.de

Innovative TheiaX sensors are attached to drones androbotic devices to provide remote images of natural
resources with minimal environmental impact. “We havehyperspectral imaging technologies that can capture
images of a very large number of closely spaced wavelengths, which are combined with machine learningalgorithms developed in house to create precise modelsof the subsurface,” explains TheiaX co-founder Richard
Gloaguen.

Photo: Adobe Stock/strichfiguren

Photo: Adobe Stock/MMPhoto21 (generated with AI)

Source: Fraunhofer

18

MARKETS GERMANY | Investors

GETTING THE
BALL ROLLING

E

urope’s largest economy has seen
several recent high-profile businessexpansion projects. Tesla has built amegafab near Berlin, while Dresden will soon
be home to a production facility for the world’s
largest semiconductor manufacturer TSMC.
Projects on this scale are often years in themaking — so how do they start?
Germany Trade & Invest, the country’s international business promotion agency, is often
the first port of call for companies wanting tobenefit from being on the ground in Germany.
To encourage interest, GTAI — in cooperation
with the economic development agencies ofGermany’s 16 regional states — invites businessdelegations to the country. A dedicated ISW
program ensures regions that are undergoing
structural change are showcased to foreign in-“You have to see
it in reality and inperson. That iswhat this trip did.
We saw a wide
range of locationsin ­Germany.”
Garry Keller, Vice President,
StrategyCorp Inc (Canada)

vestors as locations. It’s all part of the German
government’s strategic plan to preserve thecountry’s globalized economy while promoting
the untapped potential of such areas.
“The fact is that these regions typicallyoffer the most attractive investment opportunities for international companies,” says Silke
Poppe, director of GTAI’s division for regionsof structural transformation.
Trade visits are organized several times per
year. They allow international delegates to get
to know a German region, meet local industry
players and familiarize themselves with thebusiness ecosystem. The trips have four focal
points: insights into regional growth markets,
funding and subsidy opportunities, preliminary site “reconnaissance” and networking
with potential partners.

Photo: GTAIThe first step for many companies in expanding to ­Germany is an exploratory
trade visit. Germany Trade & Invest organizes trips to the country for fact-­finding,
networking and location scouting aimed at international business decision-­makers
and entrepreneurs. These visits offer invaluable market insights.

19

Thuringia: International delegates visit Maximator Hydrogen,a developer of system solutionsfor H2 technologies.

6 DAYSIn October 2023 GTAI hosted a whistlestop
tour of the country’s growing hydrogen
economy for international decision-makers.

11 DELEGATESPhoto: GTAI

Business leaders from Canada, Sweden,
Poland, South Korea and the United Kingdom were shown potential locations andintroduced to partner prospects.

HYDROGENEXPLORATION

The trade delegation is briefed
on the German hydrogenmarket at Brainergy Park, North
Rhine-Westphalia.

An international group of business leaders spent a week exploring opportunities in Germany’s hydrogen economy.
I­n October 2023, GTAI invited business delegates from Canada, Sweden, Poland,South Korea and the United Kingdom — eleven in total — to Germany for a
six-day trip to explore the country’s growing hydrogen economy. During theirstay, they checked out business locations, were introduced to local companies
in the sector and discussed current opportunities in and routes into the Germanmarket with experts.

“The agenda
was impressive.
We have met­interesting people
and seen exciting­places.”
Jacek Brzozowski,
Director, PGNiG Orlen Group (Poland)

Photo: Mariam Awara/private

Photo: GTAI“One topic was the German government‘s plans to convert former coal mining
areas into locations for the hydrogen economy,” says GTAI’s Silke Poppe. The
trade visit yielded results very quickly. “Two of the participating companies
now have a concrete interest in opening a site in Germany,” says Poppe. “Andthe Canadian Hydrogen Quebec cluster wants to offer its members a webinar
on the hydrogen economy in Germany in 2024 — in collaboration with GTAI.”“We went to Germany tocontinue to build relationships with our partners,
but also to build new
relationships with all of the
key players in the industry.”
Mariam Awara,
COO, Pulsenics Inc (Canada)

UP TO

130 TWH
Predicted demand for hydrogenin Germany in 2030
Source: BMWKMARKETS GERMANY | Investors“The trip to Japanwas very inspiringand broadened ourperspective. It has
already resulted
in new Japanese–­
German collaborations.”
Dr. Henning Müller, German ResearchCenter for Artificial Intelligence“The red carpet is rolled out,” says Poppe. GTAI
has a broad network, ensuring that international guests get to meet the most relevant local
partners for them and their specific sector.
International networking works in theother direction, too. GTAI also organizes
trips by German business delegations to other countries to make contact with potentialcommercial partners abroad. Conversely, thesevisits give trade contacts in the host country
a sense of the opportunities in Germany andthe business culture there. Sometimes these
trips also lead foreign companies to expand toGermany — with benefits for both sides. Hereare some examples. see right

Photo: GTAI

A trade visit to AgVenture Lab
to see design solutions forsolving tomorrow’s problems.

SMART FARMINGIN NORTH JAPANDuring a week-long trip to Japan, one German delegation learned how
smart farming is making agriculture there fit for the future.
When it comes to agriculture, Germany and Japan face similar challenges: climate change, a shortage of skilled workers and structural change. One solution
could be smart farming. Japan is considered a pioneer in this field, which is
why representatives from twelve German research institutions and companies,
including the agricultural machinery manufacturers Krone and Claas, travelled
to the “land of the rising sun” in May 2023. The aim was to gather information
about digital and AI solutions in the sector to further develop business modelsof their own and establish international collaborations.
The participants visited agricultural areas in the Hokkaido region, where Japanese companies are testing innovative agricultural machinery for growing rice,soybeans and vegetables. There, the German visitors met with representatives
from the Japanese agricultural machinery manufacturers Kubota and Yanmar.
“This was a first step towards building trust and discussing possible cooperationand settlements,” says Silke Poppe from GTAI, which organized the trip.

2024 ISW
Would you like to find out
about G­ ermany’s hidden
champion business locations?
Are you interested in taking
part in one of our trade delegation trips to Germany? Get an
overview of all the trips we areconducting in 2024.
www.gtai.com/delegations

CONTACT
structural-change@gtai.com
Silke Poppe, Director Eastern
Germany/Structural Change“We had the opportunity to meetindustry, research and policy representatives in Japan, engage
with forward-thinking farmers
and gain insights into their agricultural business and their opportunities and challenges.”
Martin Leinker, Group Product Strategy,
Claas KGaA mbH

Photo: Martin Leinker/private

20

21

Demonstration of a robotic
tractor for planting riceseedlings in the fields at
Yamazaki Rice farm, Japan.

1 WEEK
On a seven-day trip to Hokkaido, the northernmost island of Japan, delegates learned
about smart farming techniques for rice.

1 DELEGATION

Photo: GTAI

Nine international international decisionmakers were shown how automated andAI-based solutions can build agricultural resilience and increase food security in the future.

“The scope and intensity of
research into ­autonomousmachinery at Hokkaido
University was impressive.
All in all: a successful trip
for networking and ­thinking
outside the box.”
Thorsten Schiermann,
Product ­Management,
KRONE GmbH & Co. KG

460M
US DOLLAR

Forecast market volume of smart farming
solutions in Japan in 2026

Photo: GTAI

Source: GTAI

Hokkaido: The international tradevisitors are shown how rice is cultivated in vast greenhouses before
the seedlings are planted outside.

22

MARKETS GERMANY | Pharmaceuticals

IN BIOTECH AND PHARMA
American pharmaceutical giant Eli Lilly is radically expanding its presence in Germany.
That’s great news for the country, which sees biotech and pharmaceuticals as one of its
main pillars for the years to come.

Photo: picture alliance/dpa | Sascha Lotz

In April 2024, ground was broken on a flagship project that signals what the future
may hold in store for Germany’s pharmaceutical and biotech industries. US-based Eli
Lilly is investing EUR 2.3 billion (USD 2.5 billion)
in a new plant in the western German town of
Alzey in the state of Rhineland-Palatinate. The
company, which focuses on treating serious diseases like diabetes, obesity and dementia, aims
to have the new facility up and running by 2027.
Once operational, the high-tech site will employ

THE BOTTOM LINE
US pharma giant Eli Lilly is
ramping up its presence in Germany, where it will benefit fromthe local talent pool and a rich
ecosystem of biotech expertiseand entrepreneurship. The
project is part of a larger boomin German pharma.

up to one thousand people including engineers,
operators and scientists.
Founded in 1876 and headquartered in Indianapolis, Indiana, Eli Lilly’s investment inGermany reflects both a growth in global demand for its products and a desire to capitalizeon the country’s long tradition of pharmaceutical know-how. The company already has apresence in Germany, though so far it has been
focused mainly on the areas of development,
marketing and distribution. Alzey will be its first

MARKETS GERMANY | Pharmaceuticals

Eli Lilly’s HQ in Bad Homburg wasestablished in the 1960s. The US
pharmaceutical company is investingbillions in a production site in theregional state of Rhineland Palatinate.

23

MARKETS GERMANY | Pharmaceuticals

SALES GROWTH OF THE OVERALLPHARMACEUTICAL MARKET IN GERMANY

6,7

7,3

2020

5,4

2021

5,7

2022

€2.3

2900

billion is thesize of Eli Lilly’s
INVESTMENT in a
new facility in the
town of Alzey inwestern Germany.

Total number of JOBS
that will be created as aresult of Eli Lilly’s investment (1000 permanent
jobs at Alzey facility and1900 throughout theconstruction process).

25%

1876

of Eli Lilly’s employees
worldwide work in
R&D, with the ­company­having conducted research in over
50 COUNTRIES.

The year Eli Lilly was
founded. In the intervening 148 YEARS, it
has become one of thebiggest pharma companies in the world,with more than 42,000
employees.

2023

Source: statista

RESEARCH INVESTMENTS BY SECTOR
Percentage of total revenue re-invested in research and development(2021) of various industries in Germany

4.4

MANUFACTURING

7.3

ELECTRONICS

9.7

AUTOMOTIVE

15.6

PHARMACEUTICALS

Source: Bundesverband der Pharmazeutischen Industrieproduction site and will benefit from its proximity to Lilly’s other European manufacturing
sites, most notably Fegersheim, France. The
company’s expanded European presence will
help to foster cooperation with universities andgovernments and to create local partnerships.
Choosing a location“Germany inside the European Union is still ahighly attractive place,” says Gerd Kräh, a government affairs executive at Eli Lilly, adding thatthe country’s reputation as a “cradle of the pharmaceutical industry” was an additional pull.
The facility at Alzey will primarily focus on
producing Mounjaro, an injectable prescription
drug used to treat Type 2 diabetes and in somecases obesity. Goldman Sachs estimates thepotential global market for obesity drugs could
reach USD 100 billion by the year 2030. In the
future, Eli Lilly may also expand its output to

ON THE SHELVES
Eli Lilly’s new weight-loss
drug, Zepbound, is the latest
iteration of the popular diabetes medication Mounjaro.
The US Food and Drug Administration has approved the
medication, which is administered by injection pen.

include other incretins (drugs that promote a
reduction in blood glucose levels).
When scouting for a suitable site for theplant, Eli Lilly turned to Germany Trade & Invest (GTAI), the government’s international
business promotion agency. “We found thatthey were very helpful in terms of using their
database, their knowledge and their expertiseto find our requirements in terms of what would
be a proper location,” says Kräh.
Accelerating biotech innovation
In addition to its investment in Alzey, Eli
Lilly also plans to spend up to EUR 92 million(USD 100 million) on life science and biotech
start-ups in Germany. The money will be
put into relevant venture capital funds withthe aim of building strategic partnerships
and speeding up innovation in research anddevelopment.

Photo: picture alliance / REUTERS | BRENDAN MCDERMID

24

MARKETS GERMANY | Pharmaceuticals

Eli Lilly’s investment in Germany’s biotech
scene comes at the same time as a government
drive to speed up the approval of clinical trials
in the country — a commitment enshrinedin the Medical Research Act, which forms acore part of the new National Pharma Strategy.
see page 26“The health ministry’s Medical Research
Act presents the right approach,” says Kai
Joachimsen, CEO of the German Pharmaceutical Industry Association (BPI), a tradegroup representing the interests of around
270 pharma companies. “Now the focus

must turn to speed of implementation —pharma-level speed!”
Eli Lilly is not alone in its conviction that
Germany excels in pharmaceutical manufacturing. Last year Swiss pharmaceutical giant Roche
invested a total of EUR 1.4 billion in the country,
expanding its various facilities to include a newresearch center and global customer service hub.
A further EUR 1 billion has been earmarked for
its German operations over the next three years.
The western German regional states ofRhineland-Palatinate, Hesse and BadenWürttemberg in particular have made a namefor themselves as R&D hubs. Industry titans
Boehringer Ingelheim, Merck and BioNTech
are all headquartered in the region, with other
big players, including US biomedical company
AbbVie, employing some 3,000 people there.
Now Eli Lilly is joining the club.

Interested in bringing yourbusiness to Germany?
CONTACT
marcus.schmidt@gtai.de
Director chemicals & healthcare“Biotechnology was really­under the radar in Germany­until the pandemic”
When Eli Lilly decided to make a major investment in Germany, they turned to GTAI for
help selecting the perfect location for a future production site. They had very specificrequirements, says Marcus Schmidt, GTAI’s Chemicals and Health director.
Marcus, first of all, could you give us a brief
overview of the importance of Germany’s
pharmaceutical sector and what makes it
stand out?
MARCUS SCHMIDT: Germany is the fourthlargest pharmaceutical market worldwide, after
the United States, China and Japan. In termsof the sheer number of medications available
per country, Germany comes out on top in theEuropean Union. It only takes about 50 dayson average from regulatory approval until apatient actually has access to a medicationon the shelves. The EU average is about 500
days, so ten times as long. That’s because inGermany there’s a parallel process for price negotiations, while in most other countries theyfirst negotiate prices and then decide whether
to introduce a drug or not.

How did GTAI support Eli Lilly in completing its big investment in Germany?
MS: The main service was to help in the site
selection process. They had very specific requirements, not just for the size of property,
but for logistics, utilities, workforce availability
and timelines that had to be met for the start ofconstruction. We worked very closely with our
local partners on a state and regional level andevaluated possible sites. There were probably
about 60 sites we looked into in more detailuntil we found a really good match.

As well as its new production plant at Alzey, Eli Lilly is also making a significant
investment in Germany’s biotech scene.
How much of an impact will that have?

MS: I think biotechnology was really under
the radar for many years in Germany until the
pandemic happened. And then BioNTech cameinto the limelight and people realized what
huge potential there is in Germany. And it’s
not just BioNTech. There are so many other
innovative life sciences companies here, manyof them not really known to the public. They
work well with large pharmaceutical companies, and together they develop new products
and bring them to market. I think Lilly is very
smart to invest in these and tap into this huge
potential. This venture capital investment will
benefit both the biotech companies as well as
the pharmaceutical companies — it’s sometimes a little hard to distinguish between thetwo because they are so closely linked. This iscertainly great news for Germany.

25

26

MARKETS GERMANY | Pharmaceuticals

PHARMA: A PILLAR
OF GERMANY’SFUTUREIt was a perfect storm. Infections were up
as weakened immune systems emerged
from years of coronavirus restrictions.
Global supply chains were disrupted, and thewar in Ukraine highlighted the need for greater resilience, while Germany’s public healthinsurers were bound by rules requiring themto buy the cheapest drug on the market. The
result: empty shelves in pharmacies, parents
scrambling to source painkillers for their children and a shortage of common antibiotics.
The medicine shortage experienced acrossEurope in the winter of 2022 may seem far away
now, but it reinforced what had already become
apparent during the pandemic: Medical supply
chains are complex and fragile. A single geo-

THE BOTTOM LINE
Germany is attracting pharmaceutical and biotech
companies with financial incentives, a vibrant R&D environment and a raft of reforms
aimed at making it easier to
conduct clinical trials andaccess high-quality data.

Photo: Adobe Stock/MdKamrul (Generiert mit KI)

The German government has made pharmaceuticals one of the country’s main economic
focuses in the years to come. This is not only toensure the country has the medications it needs,
but to attract new business opportunities.

political conflict or the emergence of a newvirus is enough to disrupt the entire system.
German Health Minister Karl Lauterbach’s
response was multi-pronged. In December
2022, he made the decision to lift drug pricecaps, enabling public insurers to buy soughtafter medicines they might otherwise havebeen priced out of. Greater flexibility aroundpurchasing was one part of the solution. But a
longer-term strategy was also required: The easiest way for Germany to ensure a ready supply
of medicine was to boost the number of pharmaceutical companies operating in the country.
“In the long term, we of course have to makesure that the production of pharmaceuticals
comes back to Europe,” Lauterbach (a trainedMARKETS GERMANY | Pharmaceuticals

GERMANY’S NEW PHARMACEUTICALSTRATEGY: FOUR KEY AREAS
MADE IN GERMANY
Germany is providing financial incentives forcompanies to set up end-to-end productionof antibiotics and cancer treatments in the
country.

ACCESS TO DATAINTELLECTUAL PROPERTY

For the first time, pharma companies will
be able to apply for access to high-quality
datasets from the government’s FDZ research
center.

epidemiologist) said in the summer of 2023,
while talks were underway about launching a
new national pharma strategy. “Anyone whowants to get exclusive deals with German
health insurers will have to demonstrate thatat least half of their production is in Europe.”
Mercurial success stories
In 2020, a little-known German biotech company rose to international prominence, having
co-developed an mRNA-based vaccine against
Covid-19 with US pharma giant Pfizer. Since
then, close to five billion of its jabs have been
administered around the world. BioNTech is
now a household name.
The dizzying success story, a reminder ofwhat can be achieved when needs are great
and the best minds collaborate, stands in contrast to some of the other lessons the German
pharmaceutical industry was dealt during the
pandemic. The most sobering of these was theextent to which it had become reliant on foreign production, especially in China and India.
The German government is taking action.
In December 2023, it launched its new National
Pharma Strategy, which includes the Medical Research Act. The latter is a set of reforms to streamline and speed up the approval of clinical trials.
Identifying areas for change has involved a de-

CLINICAL STUDIESThe process of approving clinical trials is being
accelerated. A single interdisciplinary body will
now assess urgent requests.

Germany continues to safeguard intellectual
property rights as key to sustaining long-term
investment in R&D.

gree of soul-searching. Germany’s pharmaceutical industry is the fourth biggest in the world
behind the United States, China and Japan, but
in recent years Germany’s attractiveness as alocation to conduct clinical trials has waned
in comparison to that of its European peers,
partly due to excessive red tape.
“When you conduct clinical trials in several
regional states, you have to deal with multiple ethics committees,” says Marcus Schmidt,
chemicals and health director at Germany
Trade & Invest. To address that challenge, a
single interdisciplinary body will now takecharge of assessing urgent or complex study
applications, a process that will make it “faster,easier and less expensive,” says Schmidt.
Pharmaceutical companies will also beoffered financial incentives to manufacture
their products in Germany, with the aim ofestablishing end-to-end production of impor­tant medicines. Public insurance companies,
which cover almost 90 percent of the population, will now indeed award at least half of theirdiscounted contracts for antibiotics and somecancer treatments to companies that manufacture within either the country or the EU.
Germany will also continue to safeguard
intellectual property rights across the bloc by
opposing measures that would mandate tech-

nology transfer or allow exceptions to IP rules.
“The German government has taken ourconcerns seriously. As a leading industry, we
have been listened to,” says Hagen Pfundner,
chairman of Roche Germany, stressing theneed to involve the business community inthe implementation of the pharma strategy.
As well as offering financial incentives for
local manufacturing, the new strategy also revolutionizes access to data. For the first time, pharmaceutical companies will be able to apply toaccess information from the Federal Statistical
Office’s Research Data Center, a privilege previously only afforded to a pre-selected list ofentities. Crucially, they will also be able to accessgenomic data related to cancer and rare diseases,
potentially a game changer for innovation.
“With this strategy, Germany will once
again rise to the very top in terms of international competitiveness in science,” said Minister Lauterbach about the Medical ResearchAct. “We’ve long had the brains. It’s the opportunities that have often been missing.”

Could you be a part ofGerman pharma?
CONTACT
marcus.schmidt@gtai.de
Director chemicals & healthcare

27

28

MARKETS GERMANY | International cooperation

AN INDUSTRIOUS
PARTNERSHIP
Indian companies are discovering Germany as a great location for­expanding their operations beyond the subcontinent. The growing ties
between the traditional European industrial giant and the burgeoning
Asian economic power augur well for both countries.

+20
years the Indian tech consultancy Infosys has
been active in Germany

9
Number of locations Infosys has inGermany, including Dusseldorf, Frankfurt,
Berlin, Munich, Stuttgart and Hamburg

MARKETS GERMANY | International cooperation

INFOSYS: FROM INDIA TO
GERMANYA futuristic iconic pyramid building for a future-focused Asian IT giant: the Infosys headquarters in the Electronic City area of Bangalore, on the outskirts of India’s silicon valley.
The Indian global technology leader has had
a presence in Germany for over two decades.
Headquartered in Frankfurt, it’s constantly
expanding its business activities, among
other things in business process management and IT consulting. Overall, it employsaround 4000 people of over 40 different
nationalities at its nine locations in Germany.

Photo: picture alliance / REUTERS | VIVEK PRAKASHJ

oshiJampala Engineering from thecity of Satara in Maharashtra state is
testing the waters in Europe’s largest
market. The company, which is a leading manufacturer of fabricated valves in India, set up
their international marketing headquarters

ing and building resilient, sustainable supply
chains.”Many FDI projects from Indian companies
are also supporting Germany’s sustainability
goals. The engineering and IT know-how ofIndian companies plays a vital role in the drivein the western German regional state North
Rhine-Westphalia in early 2024. The move wasthe culmination of months of research andplanning with support from GTAI’s office in
Mumbai.
Co-founder Bhalchandra Joshi says his rapidly growing company was keen to be associated with Germany’s prowess. “Germany has
long been an industrial powerhouse, and thesignificance of building a presence in a placewith that reputation can be considered as one of
the main reasons we chose Germany,” he says.
Germany is attracting more and more business investments from
India across a number

to automate industrial production in Germany
and make it more resource-efficient.
Welcome changes
Between 2015 and 2022, Germany was thethird most popular destination for FDI projects globally, so it’s no wonder the country
is attracting interest from India, one theof world’s fastest growing economies. The
industrial heartland of North Rhine-Westphalia was one of the most popular states
for Indian investment during that period.
So too were the wealthy and picturesquesouthern German regional state of Bavaria

THE BOTTOM LINEof growth sectors. Comand Hesse in western
panies that provide ICT
Germany, which conGermany’s industrial trasolutions and businesstains the financial hub
dition makes the country
services are major drivof Frankfurt.
an attractive destination
ers of this trend, as giants
In recent years, thefor innovative Indian
like Infosys expand their
German government hascompanies, and a recent
operations in the hearttaken steps to encouragerelaxation of immigrationof the EU.
FDI projects from India,
policies for skilled workers
But JoshiJampala
giving those companies
opens up even more possiEngineering’s choice ofeven more reasons tobilities for collaboration.
location indicates that
expand their operations
Germany’s traditional
here. In 2022, India andeconomic strength and technological prowess Germany signed a migration and mobility
continues to excite the imaginations of Indian agreement. And last year, Germany further
businesspeople. Seema Bhardwaj, director of relaxed its residence laws to make it easier
GTAI India, believes Germany’s manufactur- for foreigners with in-demand skills to ening story is a major selling point for potential ter the country and work here. The EU Blue
Card is now available to a greater number of
FDI partners.
“The ‘Made in Germany’ brand plays a huge skilled workers as a result of the lowered salaryrole, especially in engineering,” she says. “Of threshold. The scope of the EU Blue Card forcourse, Indian companies can participate in professions in special demand has also beenthat if they invest and produce in Germany. significantly expanded. Statistics from 2023
There has been a shift in the investments from show that by far the largest number of EU Blue
India in the past three years towards diversify- Card holders are Indian nationals.

29

30

MARKETS GERMANY | International cooperation

The Germany economy
needs considerable input
from abroad, and recent
legal changes have further
bolsteren Indian–German­business ties, says Rajesh
Nath, managing directorof the Indian branch of the­German Engineering Federation (VDMA). It is one of theinstitutions that helps connect Indian companies withGerman partners.

picture alliance / Bernd von Jutrczenka/dpa

What makes India such an important trading partner for German industry? And inwhich sectors is there most scope for collaboration?
RAJESH NATH: We have a lot of members whoare primarily in the engineering sector. We
are finding increased interest among VDMA
member companies when it comes to sourcing
from India. There’s a lot of focus on manufacturing in India at the moment, and thedomestic capacity is growing. For example,
India is striving to become a USD 5 trillion
economy by 2027/28. When we move towards
the USD 5 trillion economy, we will surpass Japan and Germany to become the third largest
economy. The present share of manufacturing
in our GDP is about 16 percent roughly. The
government is trying to push this up to about
25 percent by 2027/28.

INDIA ­MOVES­TOWARDSGERMANY
What makes Germany an attractive location for Indian companies? And why does
having a presence here make a difference?
RN: After establishing a good presence in thedomestic market and good products, the next
step and aspiration for Indian companies isto go global. Germany is a strong partner for
Indian manufacturers in this regard, due toits strategic location in the heart of Europe.
Basically, companies that have a footprint
or presence in Germany will find it easier tocover the whole of Europe. Germany is also
the second largest export market for industrial
machinery after China. So that is why having apresence in Germany really adds a lot of value
to the Indian companies, and that’s why we areseeing interest.

How important are demographic changes
to the relationship between German andIndian industry?
RN: Unlike India, Germany has an aging population, so the requirement for skilled workers in Germany is pretty high. For example,
there’s a shortage of around 400,000 engineersin Germany presently. With the average age
increasing in Germany, India can really help
plug this gap. They say between 2020 to 2040,
India is going to add about 120 million people
to the workforce. On the other hand, most of
the European countries and China are sufferinga lack of population growth. Furthermore, lastyear we saw 43,000 Indian students going toGermany to study — that’s the largest foreign
student population in the country.
Will government legislation like the Skilled
Workers Immigration Act boost investment from India?
RN: We certainly encourage any act that eases
the movement of skilled labor. When Indiancompanies invest in Germany, either by acquiring an existing company or by setting up
a new company there, it is now easier to getsenior people over from India to run the operation. The presence in India of the German
government agency Germany Trade & Invest,
along with various regional state government
agencies, including North Rhine-Westphalia,
Bavaria and Hamburg, helps and supports investment in Germany. Other German states arefollowing this example — we recently hosted
a delegation from Saxony which visited Coimbatore and Tamil Nadu. These initiatives reallyhelp Indian companies to move to Germany.
And with a far greater amount of information
available, the whole process has become mucheasier. So, it’s a culmination of various factors
coming together, which is really helping inthis movement of Indian companies towards
Germany.

MARKETS GERMANY | International cooperation

31

STRENGTHENING ECONOMIC TIES
German Chancellor Olaf Scholz visited India in 2023 for meetings
with elite politicians, including Indian Prime Minister Narendra
Modi, as well as business leaders. The two nations, both of which
are among the largest five economies in the world, did a record
USD 33 billion in trade with one another last year. So it’s no wonder that economic ties are closer than ever. More than 200 Indiancompanies have come to Germany, investing over EUR 6.5 billion
in various areas, most prominently in engineering technologies
and new IT and AI solutions, as well as in automotive, pharma andbiotechnology. Meanwhile, more than 1700 German companies
are active in India, among them big names like Mercedes-Benz,
Volkswagen, Siemens and SAP. The number of Indian students
attending German universities is at an all-time high, and the twocountries collaborate intensively on research and development.
Source: German Foreign Ministry

Photo: picture alliance/dpa | Michael Kappeler

GERMAN BUSINESS LOOKS TO INDIA
This year’s Asia-Pacific Conference of German Business (APK) istaking place on November 25-26 in New Delhi, India. It’s the flagshipevent for business leaders, executives and political representatives
to discuss and promote economic relations between Germany
and Asia-Pacific (APAC). Since 1986, the conference has been heldbiennially in various locations across the APAC region. The APK is
jointly organized by the Asia-Pacific Committee of German Business (APA), the German Ministry for Economic Affairs and Climate
Action (BMWK), and the German Chambers of Commerce Abroad(AHK) in the Asia-Pacific.The conference provides a platform todeepen dialogue on current economic developments in Europe
and the APAC region while building and strengthening personaland economic ties.
www.asiapacificconference.com

Peggy Görlitz, a senior investment consultant
of GTAI, sees this as a key development in keeping Germany at the cutting edge. “The conditions we’re putting in place to attract skilledworkers to Germany are very important forindustry,” she says. “I think we will only see
more investment in Germany by Indian companies once everything is in place.”
Germany has clearly established itself as
an attractive labor market with major earningpotential for Indian employees. On average,
Indians are more highly paid than any otherimmigrant group in the country. Now withthe easing of barriers to starting a new life inEurope, it has become even easier for Indiancompanies to sell the idea of relocating to theirhome-grown employees.

With an ever-growing demand in Germany forskilled workers in fields like engineering and
IT, Germany is a highly attractive destination
for India’s higher education graduates withthe right skillsets. As of the 2022/23 wintersemester, India had more students studying
at German universities than any other foreign
nation, and the majority of those (60 percent)were enrolled in engineering courses.
Both countries stand to benefit frombuilding and strengthening business ties witheach other. The combination of Germany’s
industrial know-how, crafted and developed
over two centuries, with India’s vast potential could prove to be a winning formula in
the next stage of industrialization. “India has
raw, young and talented manpower, whereas

Germany has more skilled, experienced worldclass professionals,” says Bhalchandra Joshi.
“Such a combination will be unbeatable byother companies, and also other countries.”

Want to bring an Indianbusiness to Germany?
CONTACT
seema.bhardwaj@gtai.de
GTAI Director India
peggy.goerlitz@gtai.de
GTAI Investor Consulting,­Electronics & Automation
Industry

MARKETS GERMANY TURNS 20!

For two decades, Germany Trade & Invest’s
thrice-yearly magazine
has been reporting on
industrial transformation, innovation andmarket opportunities
for international companies in Germany. We
look back at some of
the major trends andhighlights.

2004
GTAI is celebrating the twentieth birthday of Markets Germany magazine, a publication full ofmarket insights for international companies interested in coming to Germany or in taking advantage
of business opportunities here. The idea was born in2004 in the Office of the Commissioner for Foreign
Investment in Germany, one of GTAI’s predecessors.
The goal was to raise Germany’s profile as a businesslocation and to demystify the process of setting up
shop here, as well as to report on major businessstories and trends.
The very first issue of Invest in Germany Magazine, as it was known back then, examined thequestion “Why do Chinese companies invest in Germany?” and depicted Chancellor Gerhard Schröder
fearlessly sticking his hand into the mouth of a
Chinese dragon. It also looked at the inner workingsof Germany’s world-famous beer brewing industry.

2009
The economy never stands
still, and we’ve constantly
worked to develop our magazine and take it in new directions. In 2009, we renamed
the publication ­Germany
Investment Magazine. In
2012 we settled on the title
Markets Germany.

TREND#1
INNOVATIONS FROMDIGITALIZATION TO AI
Over the years, the magazine has
mirrored the trends, challenges andopportunities of Germany’s economy
at various times. It’s a story of growth,
diversity and change.
From 3D printing and robotics to nano­technology — German manufacturing
companies have been at the forefrontof the past two decades’ tech trends.
AI and nanotechnology in particularhave been featured on average in every
second issue since 2008. We’ve also
reported on the areas that have been
affected and have benefited from digital development and AI — including
education and healthcare.

MARKETS GERMANY | Investors

33

TREND#2
BIG CHANGES IN THE
ENERGY SECTOR
Our feature stories have also
documented the transformationof major industries, including the
major changes that have reshaped
the German energy sector. As far
back as 2007, the idea of a transition to sustainable forms of energy,
the Energiewende, has guided theremaking of the country’s energy
infrastructure.

TREND#3
NEW ROUTES FOR
THE AUTOMOTIVE­INDUSTRYThe German automotive industry
has always been a global leader.
The magazine has tracked thetransformation of Germany’s flagship industry in detail — from theelectromobility revolution to thetransformation of German mobility
as a whole.

TREND#4
HEALTHCARE AND
PHARMACEUTICALEVOLUTION
Another highly innovative sector
that has featured prominently inthe magazine is pharma and life sciences. Several cover stories have examined research breakthroughs andproduction developments in thistraditionally strong and uniquely
German industry — as well as theopportunities it presents to international companies.

To be continued …

MARKETS GERMANY | Investors“BRAZIL CANHELP ­GERMANY
MEET ITS C­ LIMATEGOALS.”

Barbara Konner hopes
to strengthen the trade
bonds between the twocountries.

Brazil and Germany did almost EUR
20 billion worth of trade in 2022.
Barbara Konner, head of the German–­Brazilian Chamber of Industry andCommerce, shares her insights into
the growing connections between
the largest economies in Europe andSouth America.
Brazil’s economy has recovered after thecoronavirus pandemic, but the growthforecast for the coming years is rather
subdued. Against this backdrop, howimpor­tant are international economic
relations — for example with Europe andGermany — for Brazilian companies?
BARBARA KONNER: With their technological know-how, German companies are ideal
partners to accelerate Brazil’s “neo-industrialization” agenda (a drive from the Ministryof Development, Industry, Trade and Services
to revitalize manufacturing and industry),
therefore increasing Brazil’s international competitiveness. A relevant challenge for German
companies, however, is the lack of a level playing field in the Brazilian market. Of particularconcern is the absence of a double taxationagreement. Countries such as China alreadyhave long-standing agreements with Brazil.
German businesses in Brazil urgently need alevel playing field to ensure that established
German companies here do not fall behind andthat there is fair competition as far as business
investments are concerned.
How do Brazilian companies rate Germany
as a business location?
BK: Brazilian companies see Germany as an innovative country with a focus on sustainability
and technology. They understand that strategic
partnerships and long-term relationships canpromote the development of industry at homethrough the transfer of technological expertise.

Brazil is quite advanced in fintech and the digitalization of public services, making it a sourceof inspiration. We recently resumed our tradedelegation trips, especially in conjunction withrenewable energy, start-ups and trade fairs —and so we expect a growing interest in businesscollaborations with German companies and ingoing international generally.
Why is trade with Germany so important
to Brazil (compared to other developed
economies)?
BK: Brazil is an important economic and political partner for Germany, with a long, sharedhistory dating back to the nineteenth century.
Since 2008, Brazil has been Germany’s only
strategic partner in Latin America. Germany
continues to stand for reliability, and as the new
Brazilian government steers the country out ofa period of foreign isolation, it will strengthen
the relationship between the two countries.
Germany embodies the tradition of commercial
heritage through its solid SME sector and is
known for its pragmatic and solution-focused
approach to political and social issues — so it’sa good match. And of course geographically,
it is at the center of Europe and is one of thecontinent’s strongest economies.
Which sectors in Germany are currently
looking to Brazil as a favorable businesslocation?
BK: Due to the growing demand for green
energy, Brazil is becoming an increasingly

Photo: AHK São Paulo

34

important business investment location forGermany. Brazil already produces a good 80
percent of its electricity from hydroelectric
power plants, solar parks and wind farms. The
country is therefore predestined to be a global
supplier of green hydrogen and, as a strategic
partner of Germany, can make a significant
contribution to decarbonization and meetingclimate and environmental policy goals. It canalso play an important role in the diversification of sustainable supply and value chains.
Brazil is also one of the countries in Latin
America focusing primarily on the development of Industry 4.0 and logistics. Let’s notforget that the country is huge — almost a continent in itself — and has a lot of potential,
especially as it’s focusing on the development
of digitalization, automation and artificial intelligence. Brazil has moved into a new phaseof technological innovation, preparing the way
for the expansion of the 5G network, telecommunications and information technology.

Interested in bringing yourbusiness to Germany?
CONTACTahkbrasil@ahkbrasil.com
AHK Sao Paulo – Foreign Trade
Department
joachim.weber@gtai.de
GTAI director Executive Unit
Strategic Partnerships and liaison
to the German Chambers ofCommerce Abroad

How Germany Works
BRINGING NEW DRUGSTO M­ ARKET FASTER
Before medications can be marketed in Germany, they first have to be approved. But despite
the country’s reputation for rigorous standards,
the process is remarkably quick. The time ittakes for new medications to reach the pharmacy shelves in Germany is a fraction of what it
is in other European countries. That’s because
Germany prioritizes the availability of medicines. The European Medicines Agency (EMA)
first verifies the efficiency and safety of drugs,

HOW MEDICATIONS GET TO
MARKET IN GERMANY
If a pharmaceutical company wants to market a new prescription drug in Germany, thedrug is subject to two procedures:

drawing on the scientific expertise from EU
member states. In Germany, the state bodies
responsible for approving clinical trials are theFederal Institute for Drugs and Medical Devices(BfArM for short) and the Federal Institute for
Vaccines and Biomedicines — also known as
the Paul Ehrlich Institute. They are the largest
institutions of their kind in Europe. Companies
are allowed to set their own prices for a limited time while they undergo an assessment

procedure. New medications are reimbursedby the statutory health insurance (SHI) funds
as soon as they are authorized. At the sametime, the new drugs undergo the so-called
AMNOG procedure with benefit assessment
and price negotiation. These reimbursement
rules incentivize the rapid market launch andsupply of innovative medicines. When prices
are fixed, they often serve as a reference forother countries — in the EU and beyond.

THREE DECADES OF CONSISTENT INNOVATION
Number of market launches of drugs with new active ingredients
per year in Germany (excluding biosimilars)
50
45
40
35

#1

30

Regulatory approval (“marketing authorization”) must be sought first before thedrug can be sold in Germany with coverageof costs by the statutory health insurance(SHI) funds.

#2

25
20
15
10
5

25
20

20
20

15
20

10
20

05
20

00
20

95

0

19

Early benefit assessment: This phasedetermines the extent of coverage by the
SHI funds after the free pricing period of
the first six months.

Source: German Association of Research-Based Pharmaceutical Companies (vfa) 2024

WHAT ARE DOSSIER ASSESSMENTS?
Dossier assassments answer the question of whether a new drug has a greater (i.e., an “added”)
benefit for patients than the current standard treatment.

DRUGS enter themarket in Germany
immediately after
approval. The extent
to which statutory
health insurance reimburses the manufacturers depends on theadded benefit versus
the current standard
treatment.

Initially, themanufacturer
determines theprice…

...and submits
a dossier on
the added
benefit.

Added benefit proven:
The new drug is more ­beneficial
than the current standard­treatment. A higher price is­therefore justified.

IQWIG thenassesses the
drug using thedossier.

The Federal
Joint Committee (G-BA)
decides.

Added benefit not proven:
The data in the dossier do notshow a greater benefit of the new
drug or show even less benefit
than the standard treatment.

WHAT IS IQWIG
AND WHAT DOES
IT DO?
The Institute for Quality andEfficiency in Health Care(IQWIG) assesses the benefits
and harms of medical interventions for patients. It usually
receives its commissions fromthe highest body of selfgovernment in the German
health care system, the Federal
Joint Committee (G-BA).

At your service!

SET UP
BUSINESSIN GERMANY
Want to be part of Europe’s largest market? We’re your first pointof contact. Germany Trade & Invest (GTAI) provides international
companies looking to expand with free, reliable information on thelatest opportunities in the German market.

GET T­STAR INGTE­GERM D IN
ANY
Our experts ayGermany Trade & Invest (GTAI) is the foreign trade and inward
investment agency of the Federal Republic of Germany. We advise
Germany
Trade& Invest (GTAI)
is the foreign
and inward
and support
international
companies
planningtrade
to expandinto theinvestment
agencythe Federalof Germany.
adviseGerman market
andof
assistGermanRepubliccompanies
seeking toWe
enter
and
supportinternational
companies
planning
to expandinto theglobalmarkets.
Our Investor
Consulting
Department
providesGermanmarketassist German
companies
seeking tothe
enter
a wide rangeof andinformation
with theaim of facilitating
globalmarkets.
business
expansion process of foreign companies to Germany.

re ther
ou in ae to hll pha ­busin ases of estab elp
lish
ess in G
erman ing
www.g
y.
taw
i.w
dew/.ggttaai-i.ed
negtai-en/inve //investst

GetGetin touch
in touch
withwithourourInvestor
Investor
SupportSupportService
ServiceTeam

Our consulting services for international companies
looking to expand and seeking to establish an own
subsidiary or branch office in Germany include:• Assistance with finding the right site location for their business• Information on financing and incentives for businesses• Tax and legal information on setting up a company• Information, data and statistics about key industries in Germany
All investment-related services and inquiries are treated with theutmost confidentiality and are provided free of charge.

Alexander Walter
Alexander Walter
Sarah Gholiha
alexander.walter@gtai.dealexander.walter@gtai.com
sarah.gholiha@gtai.com

Germany
Trade &
InvestGermany
Trade& Invest
Friedrichstraße
60, 1011760,
BerlinFriedrichstraße
10117 Berlin
T. +49 30
200 30099-0
T. +49200 099-0
info@gtai.com
info@gtai.de