London (CNN Business) A 500-year-old brewery in Bavaria, Germany has become an unlikely leader in the eco-friendly beer making movement.

The Hofmühl Brewery, founded by Catholic bishops in 1492, has reduced its carbon footprint by 40% over the past two decades through solar panels and efficient water filtration, while making use of excess grains.

Championed by Chancellor Angela Merkel, Germany's "Energiewende," or renewable energy transition, encourages businesses to go green by offering tax credits, subsidies and favorable loans — benefits that an increasing number of the country's 1,300 breweries are taking up.

"Most of the breweries are small or middle sized, and most of the decisions come from the owners," Johannes Jung, Hofmühl's plant manager and brewmaster told CNN Business. "They have a view of belonging to the future."

Many German breweries have taken the environmental initiative because they don't have the pressures of publicly listed companies and are able to plan for the long term, he added.

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