Climate bonus must start by 2027 the latest, when new EU emissions trading system begins - govt

The German government has said that the allocation of so-called 'climate bonus' (Klimageld) to citizens to help alleviate high CO2 costs must start at the latest when the new EU emissions trading system for transport and buildings (ETS II) becomes operational in 2027 and is expected to bring higher carbon prices, Zeit Online reports. This could leave the matter to the country’s next government after the elections scheduled for 2025. "We definitely want and need to get the climate bonus off the ground when European emissions trading enters its second stage from 2027," a government spokeman said.

The government in its coalition treaty agreed to "develop a compensation mechanism" called Klimageld to compensate for rising carbon prices. The two main issues are setting up a mechanism to distribute the money, and making sure that the CO2 price revenues are actually available and not used for other climate measures. Developing a mechanism turned out to be more complicated than originally assumed, the finance ministry said, as there is no existing programme or database which has bank account information for all citizens. This information must be drawn from different sources, said the ministry. In addition, the current budget crisis triggered by a recent constitutional court ruling that upended Germany’s climate policy means that funds are even harder to come by. That is the key reason why the government increased the national CO2 price for transport and heating fuels from 30 to 45 euros per tonne at the start of the year. This hike in CO2 costs reinforced the discussion about compensating low-income citizens for rising costs due to measures implemented to protect the climate.

Government spokespeople also pointed out that there had already been significant compensation for the sharp rise in energy prices, such as the cancelation of the Renewable Energy Act (EEG) surcharge on electricity as well as gas and electricity price caps. Social Democratic Party (SPD) general secretary Kevin Kühnert called for an alternative social compensation for higher CO₂ prices, such as tax discounts, a long-distance commuter allowance or other measures. The government’s explanation follows statements made over the weekend by finance minister Christian Lindner, head of the pro-business Free Democrats (FDP), who said the per capita climate bonus would not be technically feasible before 2025, and the next government would decide about actual payments.