(Bloomberg) -- Germany will lobby for tougher climate regulations in the European Union to quickly cut emissions in fossil-fuel heavy industries, a potentially contentious move as voters in the bloc prepare to head to the polls.

The economy ministry will pursue tighter EU rules for oversight of construction and sustainable products, according to a document released Wednesday. It plans to make its push to the next European Commission, the bloc’s executive arm, which takes office later this year. 

The move comes amid a backlash on environmental issues from European industry, farmers and some voters due to concerns about rising costs and job losses. Climate-skeptic far-right parties on the continent have gained traction ahead of the bloc’s parliamentary elections next month. Europe’s Greens are set to lose about a third of their seats in the ballot. 

However, German Economy Minister Robert Habeck — a member of the Green party — aims to link new requirements to quotas for raw materials and products, according to a paper released Wednesday. The ministry is also seeking to expand the EU’s key carbon pricing tools, which could increase the cost of some products for consumers.

“It is our declared aim to keep energy-intensive production in Germany and make it fit for future markets,” Habeck said at a press conference in Berlin.

Germany, Europe’s largest economy, aims to cut carbon emissions by 65% by 2030, with its coal- and gas-hungry industry among the biggest polluters. 

Policymakers should consider whether to expand the types of emissions included in the EU Emissions Trading System and the Carbon Border Adjustment Mechanism, the document said. So-called “Scope 3” emissions are hardest to trace as they come from sources outside a company’s direct control — such as transport or disposal — and doing so would increase the burden for businesses, industry groups warn.

Green Demand

The government has already presented a €23 billion ($24.9 billion) subsidy program for energy-intensive companies, but these measures mostly target suppliers. To focus on demand, the state should have the option of including carbon footprint in its criteria for tenders, Habeck said. 

“Public procurement law is to be amended”, he added, “we are in the process of coordinating with the departments and hope to reach an agreement soon.” 

The government is also proposing to clarify which base materials are actually climate-friendly, with labels for goods in some of the dirtiest sectors like steel, cement and chemicals. The economy ministry said it hopes to see progress toward a global definition for green steel at this year’s COP29 international climate summit. 

The German Steel Federation welcomed the proposal as an “important step” to boost demand. 

Think tank Agora Industry — which also recently proposed a labeling system — called for an ambitious implementation of EU regulation, including carbon limits in the construction sector. “This would also strengthen the competitiveness of European manufacturers in the important future markets for green products,” said the group’s director, Frank Peter.

(Updates with minister comments and reactions.)

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