German draft budget shows climate and energy spending tripling – Tagesspiegel Background

Germany’s federal budget draft shows spending on the “Energy and Climate Fund” (EKF) tripling in 2021 to nearly 27 billion euros, writes Jakob Schlandt in Tagesspiegel Background. Most of the new expenditures result from lowering the Renewable Energy Act (EEG) surcharge using federal budget funds, but there is also substantial support for green buildings and the transport sector, the report notes. The cabinet is set to make a decision on Wednesday (23 September) on the draft seen by Tagesspiegel. In 2022, spending on the EKF should drop to about 25 billion euros and then 21 billion euros in the following two years, the draft said. The fund was increased this year as part of the government’s economic stimulus programme to carry out a “green recovery” from the economic fallout of the coronavirus pandemic, it notes.

The new budget should clear the way to calculate the reduction in the EEG surcharge, which will be set in mid-October, the article says. The subsidy to “relieve the burden” on electricity consumers will be 10.8 billion euros, falling to 8.1 billion euros in 2022. The building sector is the second largest item, where planned spending will rise to 6 billion euros in 2021, up from 3.5 billion this year. Climate action spending in the transport sector will grow to 5.5 billion euros, up from 1.9 billion this year, Schlandt writes. The energy industry will receive 1.3 billion euros in 2021, nearly twice as much as this year, with funding to decrease after that. A doubling of climate action expenditure to around 1.6 billion euros is also planned for the industrial sector, although the peak will not be reached there until 2023. Structural aid for coal regions is also included in the draft at a billion euros in 2021, rising to around 3.5 billion euros per year after 2022.

On the income side, national CO2 pricing, due from 2021 onwards in areas not covered by European emissions trading, should bring in around 7.4 billion euros next year, rising to 9 billion in 2022 and then 10.5 billion and 12.9 billion as the price per tonne increases each year, the report notes.