The German coalition government has unveiled its strategy for using €57.6bn from the Climate and Transformation Fund (KTF) in 2024. Funding primarily targets the construction sector, encompassing both renovation and new construction projects, with a budget allocation of €18.9bn. An additional €12.6bn are allocated for supporting green electricity producers in accordance with the Renewable Energy Sources Act (EEG), previously known as the EEG surcharge, which has been funded entirely from federal reserves since mid-2022. Other spendings include €4.7bn to expand Germany’s e-mobility charging infrastructure.
The KTF is funded through the proceeds generated from the domestic carbon pricing scheme in the transportation and heating sectors, as well as from the income derived from the European Union Emissions Trading System (EU ETS). The government had postponed the increase in the domestic price of carbon originally planned for early 2023 because of the energy crisis. The price is currently at €30/tCO2. At the beginning of 2024, according to previous planning, the CO2 tax was to rise to €35/tCO2. However, the government is now planning to raise the CO2 price more than previously planned in 2024 to €40/tCO2, leading to higher fossil fuels prices.
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