Factsheet for measure
DE-2010-50/3291
–
Updated
– measures in Germany
Climate and Transformation Fund
Klima- und Transformationsfonds
Background information
In 2010 the German government established a special "Energy and Climate Fund" to promote environmentally friendly, reliable and affordable energy supplies and climate protection. Since 2013, subsidies can be paid from the special fund to electricity-intensive companies to compensate for electricity price increases caused by emissions trading. Compensation payments to operators for the closure of coal-fired power plants as well as compensation payments to reduce electricity prices can also be made from the special fund. In 2022, the 'Law Establishing the Special Fund “Climate and Transformation Fund”' fund was adopted. With the new name also its resources increased significantly. Among others, €60 billion in unused resources from the "Fund overcome the emergency situation caused by the pandemic" have been allocated to it.
Content of measure
The “Climate and Transformation Fund” enables spending to promote measures to achieve the climate protection goals according to the Federal Climate Protection Act (2019). Eligible for funding are measures that are suitable for advancing Germany's transformation into a sustainable and climate-neutral economy as well as for international climate protection and related environmental protection measures.
The special fund can also be used to pay subsidies to electricity-intensive companies in order to compensate for increases in electricity prices due to emissions trading, or to make compensation payments to operators who shut down coal-fired power plants.
The use of the funds additionally reallocated from the “Fund to overcome the emergency situation caused by the pandemic” (€60 billion) is earmarked for energy efficiency and renewable energies in the building sector, mobility, new production facilities in industrial sectors with emission-intensive processes, infrastructure for a carbon dioxide-neutral energy supply, and strengthening demand from private consumers and SMEs by abolishing the Renewable Energy Sources Act levy.
For the 2024 financial year, the funding focus is on the building sector (€18.9 billion), renewable energy (€12.6 billion), electromobility including charging infrastructure (€4.7 billion), railway infrastructure (€4 billion), semiconductor production (€4 billion), the hydrogen industry (€3.8 billion) and relief for particularly energy-intensive companies (€2.6 billion).
The fund is financed, among other things, from income from emission certificates trading.
In total, around €211.8 billion will be available between 2024 and 2027.
Updates
The following updates to this measure have been made after it came into effect.
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15 November 2023
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On 15 November 2023, the German Constitutional Court declared the shifting of the €60 billion initially earmarked to counter the crisis in the course of the COVID-19 pandemic into the Climate and Transition Fund to be unconstitutional. With the €60 billion now missing, the German federal government had to reorganize the federal budget for 2024. There are now €49 billion allocated to the Climate and Transfomation Fund. Its core tasks remain the same
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Use of measure
In the 2021 financial year (latest figures available), program expenditure of around €21,046 million was made (2020: €5,036 million). Of this, €10,800 million went to grants to reduce the renewable energy levy, €3,863 million to federal funding for efficient buildings and €3,396 million to grants for the purchase of electric cars and the promotion of charging infrastructure. In addition, grants amounting to €833 million were made to electricity-intensive companies to compensate for electricity price increases due to emissions trading.
In some areas, the outflow of funds in 2021 was significantly below target. This was largely due to the consequences of the COVID-19 pandemic.
Target groups
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Workers
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Businesses
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Citizens
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Does not apply to workers
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Applies to all businesses
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Applies to all citizens
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Actors and funding
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Actors
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Funding
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National government
Company / Companies
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Companies
National funds
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Social partners
Social partners' role in
designing the measure
and form of involvement:
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Trade unions
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Employers' organisations
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Role
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Unknown
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Unknown
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Form
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Not applicable
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Not applicable
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Social partners' role in the
implementation, monitoring and assessment phase:
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Unknown
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Main level of involvement: N/A
Involvement
Unknown
Views and reactions
The German Trade Union Confederation (DGB) supported the allocation of €60 billion from unused COVID-19 funds to the climate and transition funds, but criticised that the financial resources were still too low to meet the challenges.
The Confederation of German Industry (BDI) supports measures to reduce the energy consumption price for the industry in the context of the coal-phase out and the transformation of energy supply towards renewable energies.
Sources
