Germany approved the spending of $180 billion ( €177.5 billion) for climate action and cleaner economy. The government adopted the draft finance plan for its Climate and Transformation Fund, which will help the country shift to a cleaner economy while decreasing its energy dependency on Russia by 2026.
Russia’s war on Ukraine has made it even more urgent to focus on renewable energy, cut climate-polluting emissions, and work on developing the hydrogen industry.
Relevant: Hydrogen Trains Coming To Germany
€35.4 billion from the Climate and Transformation Fund is expected to be spent by next year, with about two-thirds (€17 billion) designated for climate-friendly renovation of old buildings, Germany’s Economy Ministry said in a statement on July 27. The funding will come from CO2 pricing revenues and the fund’s reserves and will not have an impact on the federal budget.
“This special climate and transformation fund is one of the most important financing instruments for climate protection and economic modernization in our country,” Germany’s Finance Minister Christian Lindner said at a news conference in Berlin.
The country’s cabinet agreed on the following spending that needs to be approved by the parliament:
- €56.2 billion for renovating buildings to be more energy efficient by 2026;
- Approximately €20 billion for the development of the hydrogen industry and cutting industry pollution;
- Approximately €3.4 billion for the promotion of energy-efficient systems and processes;
- Approximately €3.8 billion for making heating systems more energy-efficient;
- Approximately €48 billion for the reduction of company and household burden from high energy costs.
The German government said on July 26 that it will cut back on electric vehicles subsidies from 2023 and will focus on smaller and less expensive models. €2.1 billion was assigned for such subsidies in 2023 and 1.3 billion – in 2024.
“In view of the billions in profits of car companies, such subsidies are no longer necessary,” Lindner told reporters on July 27. He said he is “counting on the market to provide impetus to make electric vehicles more affordable through competition.”