Germany plans to cut more than €30 billion (R$175.6 billion) from its climate and transformation fund by 2030 and transfer part of these resources to the federal budget. According to a financial plan approved on Wednesday (15/7), the government will reduce the fund's expenses by €19.7 billion (R$115.3 billion) and transfer a further €13.2 billion (R$77.3 billion) to the federal budget over the next four years.
Germany plans to cut more than 30 billion euros from its climate fund
Germany plans to cut more than €30 billion (R$175.6 billion) from its climate and transformation fund by 2030 and transfer part of these resources to the federal budget. According to a financial plan approved on...
The coalition government led by Chancellor Friedrich Merz and Finance Minister Lars Klingbeil had previously committed €100 billion to the fund – the German government's main tool for drastically reducing the country's carbon emissions. Now, some programs supported by the initiative, such as subsidies for heat pumps and incentives to promote electric mobility, will receive fewer resources, as part of the effort to reduce public spending, Bloomberg reports.
According to Reuters, part of the resources taken from the climate fund will fund an energy cost relief package for companies and consumers, worth €13.3 billion (R$77.9 billion), in 2027. This includes a subsidy for electricity grid tariffs, as well as relief for industries with high energy consumption through industrial electricity prices and measures that help offset costs related to carbon pricing.
Energy costs in Germany have soared since the US and Israeli attacks on Iran began at the end of February, putting further pressure on energy-intensive industries and the manufacturing sector in general. But German companies, including carmakers and steelmakers, were already complaining before the war that high energy prices were putting them at a competitive disadvantage.
And the German government's treasury in climate resources is not restricted to internal plans. A Devex analysis showed that Germany is unlikely to meet its key international commitment to provide €6 billion (R$35.1 billion) annually in climate finance to developing countries.
German budget experts estimate that allocations and subsidy equivalents for climate finance will fall in 2027 to between €4.7 billion and €5.3 billion (R$27.5 billion and R$31 billion) – the same amount forecast for 2026. The projected gap reflects a similar deficit expected for this year, making Berlin's retreat from climate finance targets a multi-year trend.
Source: ClimaInfo
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