Germany's climate budget is being underused – auditors

The Federal Court of Auditors (Bundesrechnungshof) has criticised the German government’s for not using funds designated for climate action to their full extent, writes Frankfurter Allgemeine Zeitung (FAZ) based on an unpublished report. The outflow of funds from the country’s climate action budget — the Climate and Transformation Fund (KTF) worth more than 200 billion euros by 2027 — has been “sluggish”, said the auditors in a report to parliament. For several years, the government has been planning with more expenditures than later were used. "Since the establishment of the KTF, the federal government has left an annual average of one third of the budgeted programme funds unused," write the auditors. "In 2022, it was even more than half, namely 14.2 of the budgeted 27.9 billion euros." Ministries needed to be more accurate in their planning and analyse the low outflows for future budgeting, said the auditors.

Germany’s Climate and Transformation Fund is the country’s key budget instrument for climate action. It was set up in parallel to the core federal budget and is partly fed by revenue from the EU emissions trading scheme (ETS) and from the country’s CO₂ price for transport and heating, which is set to rise at the beginning of next year. However, the government also filled the KTF with funds originally earmarked to tackle the effects of the coronavirus crisis. Due to this rededication, the fund is currently being challenged at the constitutional court, with a ruling expected in the coming weeks or months. In earlier reports, the auditors criticised the government for lacking a clear overview of whether funds were meeting their intended effects, and said spending needed to be done more targeted.