German subsidies double but only half have positive climate effect – report

Germany's federal government has nearly doubled subsidies within three years, but less than half of them have a positive effect on climate and the environment, reports energy and climate newsletter Tagesspiegel Background. According to a government report seen by the publication, federal subsidies and tax breaks will add up to 47.2 billion euros next year, compared to 24.6 billion euros in 2019. The strong increase is mainly due to 42 new support programmes, led by subsidies for efficient buildings and purchase subsidies for commercial vehicles and buses with alternative drives. The report states that subsidy policy is increasingly shaped by climate and environmental policy. However, only 67 of 128 subsidies with a total volume of 16.2 billion euros contributed to environmental protection and climate goals. The report does not say which subsidies harm the climate.

Environmentalists regularly urge the government to finally put an end to climate-damaging subsidies, for example a lower tax rate for diesel fuel. The government has repeatedly said it would phase them out, but has not delivered on this promise.