Germany's strong environmental awareness encourages businesses to develop and profitably market emissions-free technology – no surprise then that the country leads the continent on renewables. DAVID BRIERLEY reports

Germany will derive about 13% of its total energy from renewable resources in 2007 and is a world leader in wind power. In practical terms it has done more than any other European state to develop an alternative energy infrastructure and reduce carbon emissions.

Two of the most famous structures in Berlin reflect the country's deep environmental concerns: the Reichstag building, seat of Germany's parliament, and the spanking new Hauptbahnhof (train station) nearby. Meanwhile, the Reichstag – rebuilt under British architect Norman Foster – has reduced its carbon production by 94% through modern technology. Its boiler burns biofuels while hot and cold air are stored below ground and pumped upwards to warm or cool the building and its distinctive cupola as required. A short walk from the Reichstag is Berlin's landmark train station with its 320m-long glass roof – which is also a solar power plant delivering 160MW annually. Because of the curved roof, each solar panel has a different geometry, a considerable technical achievement. Deutsche Bahn meets 13% of its power needs from renewable sources.

Germany's achievement in developing alternative energy is far ahead of other European countries. German society has long been highly aware of green issues and energy costs. Since the 1970s, the ecological movement and the Green Party have led the agenda, making recycling, renewable energy and energy conservation mainstream political issues. This has turned Germans into very careful consumers; they use far less energy than the wasteful Brits and Americans. Even so, if they switched off all their electronic machines left on standby, that would save enough energy to power a major city. Much remains to be done, even as politicians move to more carbon reduction; German business has still to show that growth and low-carbon production are truly compatible, even though the ecological agenda seems important to all. There is no doubt green business is good business.

Today, Germany leads the way in fields such as renewable energy and energy-saving technology. Rolf Disch, a Freiburg-based architect, was spurred by local protests against a planned atomic power plant (since shelved) to design highly energy-efficient buildings. The resulting projects for offices and homes have won prizes and set the example for many others.

"We were the pioneers. We looked at the way things might be done and proved they were possible. Now most of our methods have become standard practice," says Boris Kauth, spokesman for the Disch bureau. "At one time, banks would not give you a mortgage to buy an eco-house. Now, there is no problem. It's completely normal." By using the glass fa çades and the roof terrace for sun collectors, along with a range of heat-saving features, Disch has created houses that are "energy positive" – they produce more power than they use. Using prefabricated modules, they are also attractive enough to win architectural prizes.

Disch's houses prove that striking energy savings really are achievable. Many other architects, designers and companies have followed his lead, spurred on by government subsidies for builders and buyers of energy-efficient properties. These have become mainstream – just as fuel prices have risen sharply. A boom looks certain to ensue. However, Kauth admits, the greatest environmental benefit will accrue from the conversion of the existing German housing stock. That will demand further government intervention.