Germany’s CO2 pricing part of 'irreversible' path – SPD chancellor candidate Scholz

Germany’s achievements in the field of climate and energy policy mustn’t mean that the country becomes complacent now, Olaf Scholz, finance minister and the Social Democrat’s candidate for chancellor in the 2021 elections has said. Speaking at an online meeting entitled “Affordable renewably energy for all” organised by the SPD parliamentary group in the Bundestag (federal parliament) on Monday, Scholz said: “If we want to become climate neutral by 2050, we need a big technological revolution. […] We have launched a climate action package […] but now we have to make sure that it becomes reality.”

The German government is in the middle of revamping its Renewable Energy Act (EEG) to ensure that ongoing renewable operations, the future expansion of renewables and the social acceptance of these energy sources are in line with reaching decarbonisation targets. A first draft of the bill by the Christian Democrat (CDU)-led energy and economy ministry was leaked last week, but the SPD’s energy experts in the Bundestag are taking issue with how renewables will be funded in a socially fair way in the future. Discussing a proposal by German Energy Agency dena to lower the renewables surcharge that consumers pay on their power bill to zero, while increasing the power tax, SPD parliamentarian Bernd Westphal said that a lower power price would also incentivise companies to use green power instead of fossil energy forms. 

Olaf Scholz said that the national CO2 price on heat and transport fuels is becoming reality next year, setting Germany on a path that is “irreversible”. “The increasing CO2 price is tied to a reduction in the EEG-surcharge. This costs a lot but it is necessary, in particular in the current economic crisis,” he added. He is convinced that the EEG-surcharge won’t be a burden on power bills in a few years’ time, which will help stablish renewable energies in the transport and building sectors where high power prices have prevented more progress until now.

The next stage of the renewables bill overhaul will be its discussion in the government cabinet, which is scheduled for 23 September. The draft law will afterwards be sent to the Bundestag, where more changes could be made. The renewable surcharge and other politically determined charges make up around 50 percent of the power price for consumers in Germany. Changes to this system of taxes and levies are high on the agenda of politicians, researchers and activists to better incorporate renewables and other low-CO2 technologies into the economic system.