Climate fund offers limited support to lower-income households – think tank
Clean Energy Wire
Low- and middle-income households in Germany receive relatively little targeted support from the country's Climate and Transformation Fund (CTF), despite facing greater exposure to rising energy and living costs, according to an analysis by social climate policy think tank Zukunft KlimaSozial.
Most CTF spending is directed toward programmes without a clear social focus or into broad-based relief measures that tend to benefit higher-income households and businesses, the institute said in its review of budget plans for 2025 and 2026.
Socially targeted measures – such as income-tiered building renovation schemes, household energy-efficiency advice or the government's planned electric vehicle subsidy for low- and middle-income households – account for just 14 percent of expenditure, the analysis found.
The report also points to a shift in spending priorities in 2026 towards short-term energy price relief, while the share of investment spending is set to decline sharply and then stagnate. According to the think tank, such measures disproportionately benefit households and companies with high energy consumption and higher incomes.
The CTF is a central financing tool for Germany's efforts to cut greenhouse gas emissions and reach climate neutrality by 2045. It is funded primarily through revenues from Germany's national carbon price on transport and heating, proceeds from the sale of EU emissions allowances under the Emissions Trading System (ETS), and transfers from a debt-financed 500-billion-euro fund for infrastructure and climate neutrality.
A recent analysis by the Federal Environment Agency (UBA) of 2024 data found that poorer households are proportionally more burdened by Germany's national carbon price on transport and heating, even though they cause considerably fewer emissions than more affluent groups in society.
Zukunft KlimaSozial said a socially balanced design of the fund was essential, noting that low- and middle-income households are particularly sensitive to rising energy and living costs. Socially just climate policy can also help strengthen public acceptance of climate measures, it added.
