Industry and NGO alliance urges Germany to keep ETS revenue in climate fund
Clean Energy Wire
A coalition of 15 associations and civil society groups has warned Germany’s government against austerity measures that would divert money away from the country’s special Climate and Transformation Fund (CTF). In a joint open letter, the coalition including think tank Stiftung KlimaWirtschaft, chemicals association VCI, the county’s steel association, and climate NGOs NABU, DNR and WWF Germany, said carbon revenues from the ETS should continue to be used in full for investments in the climate neutral transformation of industry.
The government's 2027 budget draft, approved by cabinet in July and set to be discussed in parliament next week, foresees shifting 2.7 billion euros in Emissions Trading System (ETS) revenue out of the CTF into the general budget.
“It is essential that government revenue from payments made by industry and the energy sector for emission allowances is channelled in full back to the companies affected and towards consistent climate protection,” the alliance wrote. “Reducing the proportion of emissions trading revenues channelled into industrial decarbonisation would send a disastrous signal and would undermine the industry’s international competitiveness.”
The CTF finances support programmes for heating modernisation, electric vehicles and other climate-friendly technologies. It is largely topped with revenues from the EU Emissions Trading System (ETS), which puts a price on climate change-inducing CO2 emissions from the industry and energy sectors, and the national carbon pricing mechanism for transport and heating. Companies in those sectors need allowances for the carbon they emit. The CTF is only one of several special-purpose funds outside of the regular state budget, which also exists for other areas such as defence spending.
Germany’s proceeds from the sale of CO2 emissions allowances for its national and the EU’s trading system (EU ETS) rose to a record 21.4 billion euros last year, an increase of 16 percent or 2.9 billion euros compared to 2024.