Germany has adopted the Climate Action Programme 2030 to help achieve 55% of GHG emission reductions by 2030 compared to 1990. In the energy sector, emissions will have to be reduced to between 175 and 183 MtCO2 by 2030, through phasing out coal-fired power generation and boosting renewable power generation. Coal-fired power stations are to generate only 17 GW of electric power by 2030, and will be offline by 2038. To compensate, renewables will account for 65% of power consumption in 2030 and the current ceiling of 52 GW on solar PV plants eligible for state assistance will be removed.
The programme, among other things, establishes a national emissions trading system as of 2021 for companies selling heating fuel and fuel for vehicles. Companies trading heating oil, LPG, gas, coal, petrol or diesel, will need one certificate for every tCO2 emitted by the products they sell. The price will be set in advance and will start at €10/tCO2, rise to €35/tCO2 in 2025 and will be market-set (within a fixed band) from 2026 onwards. End users will benefit from compensations: from 2021 to 2026, people living 21 km or further away from work will be granted a €0.35/km offset from fuel prices. Furthermore, VAT on train tickets will be reduced to 7% (from 19%) and housing benefits will be increased by 10% as of January 2020.
The government also committed to producing a master plan for developing the electric vehicle charging station infrastructure by 2025, in order to reach 7 to 10 million electric vehicles registered in Germany by 2030. A premium scheme for people buying electric, hybrid and fuel cell vehicles is to be continued and extended to cover the purchase of vehicles costing less than €40,000, and first-time-registrations and retrofitted electric vehicles will initially pay no vehicle tax (until end-2025). Also, first-time vehicles registration tax will be based on CO2 emissions per km, and will gradually be increased above the level of 95 gCO2/km. To support the transition to more efficient transportation ways, Germany will invest €1bn/year to develop local public transport, starting in 2021, and €2bn/year from 2025 onwards. Deutsche Bahn will commit €86bn by 2030 to the development of railway (for passengers and merchandise) and the government will invest €1bn/year in the modernisation and electrification of railways from 2020 to 2030.
The building sector represents 14% of CO2 emissions in Germany, i.e. 120 MtCO2/year that should be reduced to 72 MtCO2/year by 2030. The programme introduces a subsidy for refurbishing buildings, for example, 40% of the costs of replacing oil and gas central heating will be subsidised under the form of a "replacement bonus". Installation of these systems will be forbidden from the market as of 2026. Other energy efficiency measures will also be tax-deductible.
The Climate Action Programme 2030 also includes measures related to agriculture and industry. Moreover, Germany will continue to explore hydrogen options - a Hydrogen Strategy should be completed by the end of 2019 - as well as battery cell production and research and development into carbon capture and storage (CCS).
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