Most Germans favour using CO2 price revenues to fund renewables, lower grid fees – survey

More people in Germany say they want the government to invest CO2 price revenues in renewable energy sources and to lower grid fees, than compensating citizens through an annual so-called climate bonus, an analysis conducted by economic research institute RWI has found. A clear majority of citizens want the proceeds from CO2 pricing to be used to cover expenses for the energy transition’s infrastructure, the RWI said.

Citizens were surveyed between 2021 and 2024 and according to RWI, about 80 percent said that carbon pricing should fund the expansion of renewables and 65 percent said it should be used to lower grid fees. By contrast, only 44 percent in 2024 named the climate bonus payments as a priority for using the funds, up from 30 percent in 2021. “Our empirical results show once more that a clear majority of respondents wants to use the CO2 price income for advancing the energy transition,” said RWI economist Manuel Frondel.

In a separate statement, the Association of Local Public Utilities (VKU) and the German Electro and Digital Industry Association(ZVEI) together called for lowering the tax on electricity rather than issuing a climate bonus. “The undifferentiated payout of a per capita premium does not guarantee targeted support for citizens,” the lobby groups said, adding that managing the climate bonus scheme would amount to “a bureaucratic monster.” Cutting the power tax to the EU minimum and supporting customers with lower grid fees would instead bring a direct cost reduction for both citizens and businesses “and create more acceptance and dynamic for the energy transition,” the associations argued. “The proceeds from fuel emissions trading should be purposefully used for support measures, especially for transforming the energy system with a focus on the socially sensitive local heating market,” said VKU head Ingbert Liebing.

Arguing for the opposite position, NGO Greenpeace released an analysis that found a climate bonus to be a more ecologically sound and socially just measure than lower taxes. “A climate bonus would support low-income households more and create incentives for saving energy,” Greenpeace said. Moreover, it would create greater earnings for the state, as high-income households would be fully taxed for their climate bonus income. Lower taxation instead would especially benefit high-income households, the NGO argued. “Lowering the tax on electricity and grid fees would mean the largest savings for those who use the most electricity. This is anti-social and climate-damaging,” said Greenpeace energy expert Sophia van Vügt.