UPDATE: Germany set to miss EU social climate fund deadline, but ministry denies funds are at risk

[UPDATE to add ministry statement arguing funds are not at risk]

Billions of euros in EU subsidies for socially just climate action projects in Germany are at risk as the country’s government looks set to miss a 30 June deadline for submitting plans on how it would spend the money, newspaper Handelsblatt reported. The environment ministry told the newspaper that it is currently in talks with the European Commission to ensure that “a possible delay in submitting the plans due to the preceding snap elections will not lead to Germany losing these funds”.

Germany could receive up to 5.3 billion euros from an EU fund between 2026 and 2032, which it planned to co-finance with 1.7 billion euros in domestic funds, according to the report. The ministry said that the government would submit its plans “soon”, but was unable to say whether the Commission would still consider them after the deadline.

In a statement sent out on Monday afternoon, the environment ministry denied that missing the deadline would put the funds at risk. "Germany will have full access to the 5.3 billion euros in EU support funds," the ministry said, arguing that the deadline would not determine who gets support. "What matters is the successful implementation of sociall focussed subsidy programmes from 2026 on," the ministry added. "Germany first will advance the payment and subsequently gets the money back from the EU." The Commission had been informed early on about the delay and works together with member states to ensure that the Social Climate Fund can start on time, the minstry said. 

The EU’s Social Climate Fund is supposed to financially assist households, small companies, and others with direct grants or subsidies for climate-friendly heating and building modernisation and other decarbonisation measures. The fund will partly be filled with the proceeds of the EU’s new emissions trading system for transport and buildings (ETS2), which is planned to take effect in 2026.

The risk of losing the funds became public because of a letter sent by the Green Party’s co-leader, Felix Banaszak, in which he urged the government to comply with the deadline, arguing that the previous government had carried out all necessary preparations. The government’s coalition treaty says that the conservative CDU/CSU alliance of chancellor Friedrich Merz and its partner, the Social Democrats (SPD), want to introduce mechanisms to shield consumers from jumps in carbon pricing due to the ETS2, an ambition for which it is expected to rely on EU funds.