Cabinet set to pass emergency climate programme allocating 8 bln euros

The German government aims to spend some 5.2 billion euros next year in climate protection investments as part of an emergency climate pact that is expected to be approved by chancellor Angela Merkel’s cabinet on 23 June, reports newspaper Frankfurter Allgemeine Zeitung (FAZ), which obtained a copy of the document. The plan allocates an additional 8.1 billion euros to help achieve climate protection goals over the next five years. However, as the parliament is about to head into the summer break and Germany holds a national election in September, the proposals are more of a wish list for the next government, writes FAZ. Legislative changes and the decision on funds from the budget would have to be made by the next parliament. Some 2.5 billion euros are earmarked for the funding of energy-efficient buildings in 2022. More than 650 million euros will go to the decarbonisation of industry as part of a plan that will also include Carbon Contracts for Difference (CCfD). These contracts, which are also supported by the Green Party, serve to cushion the higher operating costs that industries will face as they adopt more environmentally friendly processes. In addition, the climate pact allocates 302 million euros for the expansion of bicycle paths; 300 million euros for waterways; and 200 million euros for the railway. Support will also go to forest protection; climate-friendly social housing, ecological shipping and the steel industry, especially for hydrogen. Some 65 million euros have been earmarked for offshore electrolysers and for the H2 Global initiative to support the energy industry and another 40 million euros is backing hydrogen technology for hybrid-electric aircraft projects.

In May, the German government agreed on the climate pact in order to reach the more ambitious emission reduction targets, following a landmark ruling by the German top court judging that the country's key climate legislation was insufficient. The climate pact is not part of the amended Climate Change Act that is expected to pass on 24 June but rather a legacy project from Merkel’s outgoing coalition. Due to the summer break, it won’t make into the legislative process until next year.