Social Democrats prepared to raise initial CO2 price in Germany's climate package

Germany's Social Democrats (SPD) are prepared to raise the initial CO2 price in the government's climate package presented last week. Following widespread criticism that the currently envisaged starting price of 10 euros per tonne in the transport and heating sectors was much too low to have any significant effect, Malu Dreyer, acting head of the junior coalition partner to Chancellor Angela Merkel's conservative CDU/CSU alliance, suggested her party would agree to double the initial price tag for emissions. "We proposed [during negotiations with the conservatives] to start with 20 euros as a compromise," Dreyer told newspaper Tagesspiegel. With a view to upcoming discussions about the climate package in the Bundesrat, Germany’s council of federal states that will have to approve parts of the climate strategy, she said the SPD would try to find common ground with the Green Party, which is strongly represented in the chamber because of its participation in numerous coalition governments at state level.

According to current plans, the national carbon pricing will start in 2021 with a fixed allowance price of 10 euros per tonne of CO2, which would increase petrol prices by around three eurocents per litre. Allowance prices are then going to rise to 20 euros in 2022, 25 euros in 2023, 30 euros in 2024 and finally to 35 euros in 2025. Dreyer warned that climate protection must not overburden commuters or poor households. "We want both: Reaching 2030 climate targets and preserving social peace.”