Act now and reap double the benefits: Companies in Germany can not only reduce their tax burden by investing in modern machinery, but also cut CO₂ emissions. The introduction of the 30% declining-balance depreciation (2025–2027) offers a unique opportunity to write off investment costs more quickly for tax purposes while boosting operational efficiency at the same time. This approach aligns with international best practices for incentivizing sustainable investment and is supported by organizations such as the OECD, which recognize accelerated depreciation as a key lever for stimulating modernization and environmental upgrades.
Why invest now? Companies secure tax benefits, reduce operating costs, and strengthen their competitiveness. Those who act by 2027 take advantage of the best conditions for switching to more efficient technologies, as early adopters are better positioned to benefit from both fiscal incentives and the operational advantages of cutting-edge equipment.
German tax policy is offering companies an attractive incentive for modernization investments through the introduction of the 30% declining-balance depreciation. This measure not only strengthens competitiveness but also provides companies with additional liquidity. The approach mirrors global trends, as governments worldwide increasingly use tax policy to accelerate the adoption of sustainable and digital technologies (OECD Tax Policy Reforms 2023). Below, we explain how this regulation works and the financial advantages it brings.
The declining-balance depreciation allows companies to write off 30% of an asset’s residual book value each year. This results in higher depreciation in the early years, providing an immediate liquidity advantage. The regulation applies to fixed assets acquired or manufactured between 2025 and 2027.
This so-called present value effect enables companies to significantly reduce their tax burden in the first years. It is particularly relevant for movable assets such as machinery and operating equipment. Investments in digital assets, such as software, may also benefit from this regulation. Another advantage: it makes no difference whether the assets are new or used—a key relief for smaller businesses with limited budgets. These tax benefits help companies strategically align their investments with the challenges of the coming years, especially as digital transformation and decarbonization become increasingly urgent priorities across industries.
Companies should use the time until 2027 to benefit from current tax rates and accelerated depreciation. From 2028, a gradual reduction in corporate tax is planned, creating an additional incentive to bring investments forward. This way, companies can not only take advantage of declining-balance depreciation but also optimize their tax burden before the corporate tax rate drops.
The coalition agreement also provides for bundling the legislation for these investment measures and the planned corporate tax reduction, potentially implementing them as early as 2025. Companies should therefore review their investment plans early and prepare for the new tax opportunities. This allows them to fully leverage the double benefit of accelerated depreciation and tax savings, a strategy recommended by leading tax advisors and industry analysts (Baker Tilly).
New technologies and modern machinery offer companies a double opportunity: they optimize business processes while reducing the ecological footprint. The result? More efficient operations and less environmental impact. After the financial benefits from tax incentives, the operational and ecological advantages of modern equipment come into focus here. This dual impact is increasingly recognized as a competitive differentiator in global markets, where sustainability credentials are influencing both customer choice and investor confidence.
New machines are not only faster but also more resource-efficient. They consume less energy and raw materials, generate less waste, and thus deliver noticeable cost savings and smoother workflows.
For example, modern systems can reduce energy consumption by up to 25%. Technological progress is also evident in network infrastructure: fiber optics are 85% more energy-efficient than copper, and 5G networks operate up to 90% more efficiently than their predecessors (IEA). These improvements are backed by the International Energy Agency, which highlights that digitalization and smart automation are key drivers of industrial energy efficiency.
Innovations include advanced motor technologies, energy-efficient components, and intelligent automation. Heat recovery systems use waste heat for other processes, increasing overall efficiency. These measures not only lower operating costs but also improve product quality and reliability.
"Energy efficiency is called the 'first fuel' of the energy transition, as it offers some of the fastest and most cost-effective options for reducing CO₂, while also lowering energy bills and strengthening energy security." – IEA
The benefits of modern equipment go beyond pure energy savings. AI-powered maintenance, for example, reduces emissions by avoiding unnecessary interventions, making transport and production processes more efficient. According to the IPCC, such digital solutions can play a pivotal role in achieving deep decarbonization across sectors.
Practical examples show what’s possible: French clay brick manufacturer Bouyer Leroux cut its CO₂ emissions by 1,987 tons and saved $302,697.60 annually using Naoden technology. IKEA Industry achieved an annual reduction of 14,000 tons of CO₂ emissions through modernized facilities. These real-world cases underscore the tangible financial and environmental returns of investing in advanced equipment.
Technologies such as micro-gasification enable companies to save up to 40% on energy costs and reduce CO₂ emissions by 30–50%. Despite these impressive results, there are also challenges that must be considered when introducing new technologies.
The path to modernization is not without obstacles. The following overview shows what advantages and challenges companies can expect:
| Benefits | Challenges |
|---|---|
| Up to 25% lower energy costs | High initial investments |
| CO₂ savings of 30–50% | Production downtime during conversion |
| Higher product quality and reliability | Difficult integration into existing systems |
| Lower maintenance costs thanks to AI | Complex data management with smart technologies |
| Stronger competitiveness | Convincing management to invest |
A common obstacle: 37% of companies express concerns about downtime associated with introducing new systems (McKinsey). Addressing these concerns through phased rollouts and clear ROI projections is essential for successful transformation.
Experts recommend starting with systems that promise a high return on investment (ROI), such as predictive maintenance. This helps minimize risks and achieve initial successes more quickly.
Modern machines alone do not create a sustainable future—companies need a well-thought-out sustainability strategy that combines tax benefits, operational efficiency, and climate protection. This is where specialized consulting comes in: it helps plan investments strategically while ensuring compliance with all regulatory requirements. This strategic approach complements the previously mentioned benefits in terms of efficiency and emissions reduction, and is increasingly demanded by investors and regulators alike.
New machines are installed, initial energy savings are visible—but the next step is crucial: embedding these advances in a comprehensive sustainability strategy. Fiegenbaum Solutions supports companies in firmly integrating sustainability into their business strategy, always keeping regulatory requirements in mind.
A key starting point here is life cycle analysis (LCA). These analyses assess the environmental footprint of products and identify optimization opportunities along the entire value chain. They not only show where the new machines are particularly effective but also where further measures can deliver maximum emissions reductions.
This is especially relevant due to the CSRD reporting obligation, which has been mandatory for many companies since 2024. The Corporate Sustainability Reporting Directive (CSRD) requires detailed sustainability reports—a task that can quickly become a challenge without professional support. The European Commission emphasizes that robust ESG reporting is now a critical factor for accessing capital and maintaining stakeholder trust.
Fiegenbaum Solutions also develops net zero strategies and analyzes climate risks. Companies benefit from a clear roadmap to decarbonization and receive a solid assessment of the regulatory and physical risks that could impact their business model.
"Sustainability is not just a challenge, but the greatest opportunity of the 21st century." – Fiegenbaum Solutions
In addition to strategic consulting, Fiegenbaum Solutions relies on precise data analysis. After all, in 35% of cases, executives cite inaccurate data and in 25% limited access to high-quality data as the main obstacles (PwC Global ESG Reporting Survey). These figures highlight why data-driven ESG consulting is so important.
With impact modeling—a method for capturing and managing emissions reductions—and advanced data analysis, Fiegenbaum Solutions helps companies measure CO₂ emissions, identify targeted reduction measures, and assess climate risks. This analytical approach transforms ESG initiatives from reactive measures into proactive strategies, enabling companies to invest where they will have the greatest impact.
The importance of ESG data is also evident in investment decisions: 99% of respondents consider ESG data important or very important for their investment decisions (Morningstar ESG Investing). Companies that support their efficiency investments with solid data analysis gain a clear competitive edge.
A vivid example of successful ESG implementation is Konfidens, a provider of mental health solutions. With the support of Fiegenbaum Solutions, the company was able to reduce its environmental footprint and successfully implement ESG measures.
| Area | Focus | Benefit |
|---|---|---|
| ESG strategy development | Life cycle analysis, net zero approaches | Sustainable overall concepts |
| Compliance management | CSRD, CBAM, GDPR | Legally compliant reporting |
| Data-driven optimization | Impact modeling, climate risk assessment | Informed decisions |
By combining technical expertise and strategic consulting, companies can make the most of their efficiency investments—for greater competitiveness and measurable progress in climate protection.
The years 2025 to 2027 present German companies with a unique opportunity: thanks to the 30% declining-balance depreciation, investments in modern machinery become financially more attractive. At the same time, companies contribute to climate protection. Those who act now benefit twice—through lower tax burdens, reduced operating costs, and fewer CO₂ emissions. These advantages reflect the political approach of actively supporting companies in their transformation and are consistent with the global push for sustainable growth.
The German government is setting clear incentives for modernization. By 2032, the corporate tax rate is set to drop to 10%—a significant advantage in international competition. In addition, €10 billion is being invested annually in the Climate and Transformation Fund to help Germany achieve its goal of climate neutrality by 2045. With the aim of reducing emissions by 90% by 2040, companies also have access to funding programs such as the BAFA initiatives for energy and resource efficiency (BAFA).
Timing is crucial: companies that fail to seize these opportunities not only miss out on significant tax benefits but also risk falling behind in the necessary modernization. Strategic action—through targeted investments, professional ESG consulting, and data-driven decisions—can make all the difference.
Modern technologies are the key to a future-proof and competitive orientation. Companies that act now lay the foundation for long-term success.
The updated tax regulations offer companies a wide range of benefits, taking into account both economic and ecological aspects:
These regulations combine economic benefits with ecological responsibility—a combination that benefits both companies and the environment. This dual focus is increasingly recognized as a best practice in sustainable business transformation (UN SDGs).
Companies can reduce their CO₂ emissions in the long term by strategically investing in technologies that effectively lower energy consumption and minimize emissions. The key is to analyze the specific needs of their own industry and choose solutions that are not only efficient but also environmentally friendly. Regular benchmarking against industry standards and leveraging life cycle assessments can further enhance impact.
Another important step is the regular review of investments. This includes closely monitoring energy savings, emission reductions, and financial effects. This ongoing analysis helps ensure that the measures are both ecologically and economically sound, while making a valuable contribution to the company’s climate protection strategy. Utilizing digital monitoring tools and transparent reporting, as recommended by the CSRD, can provide actionable insights for continuous improvement.
Integrating new machinery and technologies into existing systems often brings several challenges. One of the biggest hurdles is compatibility: new technologies often have to work with older systems, requiring technical adjustments and additional investments.
Another obstacle can be internal resistance. Changes often cause uncertainty among employees. Here, clear and open communication plays a central role. If the benefits of the new technologies are clearly explained and employees are actively involved in the change process, reservations can often be reduced.
In addition, employee training is essential. Only if the team can operate the new systems safely and efficiently will integration be successful in the long term. According to McKinsey, companies that invest in upskilling and change management are more likely to achieve successful digital and sustainable transformation outcomes.