German finance minister says government won’t return CO2 income to citizens before 2025

Germany’s coalition government will not follow through with its original plan to return revenues from carbon price to citizens as compensation for rising CO2 prices in the current legislative period, according to finance minister Christian Lindner, head of the pro-business Free Democrats (FDP). Lindner said the per capita climate bonus (Klimageld), which the government had agreed on in its coalition treaty, will not be technically feasible before 2025. “Whether we politically reorganise the funding landscape in this direction will have to be decided after the next election,” he told the Neue Osnabrücker Zeitung. The government increased the national CO2 price for transport and heating fuels from 30 to 45 euros at the start of the year – a more drastic increase than planned – in response to a constitutional court ruling, which led to a shortfall of 60 billion euros largely earmarked for climate policy. In reaction to the increase, some economists, NGOs and consumer advocates intensified their calls for the implementation of the climate bonus.

Lindner explained that the government’s CO2 revenues are already being spent on other climate measures, such as subsidies for climate-friendly heating systems, building renovations, green steel production or charging stations for electric cars. “Because one household receives funding for a heat pump, several hundred others cannot receive climate money that year,” Lindner said. “You can't spend the money twice. The climate money would therefore replace the subsidies we have now,” he said, adding that a decision to change the current system would have to be made after the next general election. Some other government party policymakers had previously cast doubt on whether the bonus payments could be realised given that the constitutional court ruling had “severely restricted” the government’s financial scope.