The head of Germany’s Federal Environment Agency (UBA) renewed calls for carbon revenues to be returned to citizens, as the agency announced that the country’s carbon pricing scheme raised €13 billion from heating and transport fuels in 2024.
The sum was a 21% hike on 2023 revenues.
“In order to ensure compensation for private households even if CO2 prices continue to rise, we now need ‘Klimageld’ quickly” EBA President Dirk Messner said in a statement announcing the results on Tuesday.
The ‘Klimageld’ is a proposed mechanism to channel funds to lower-income households, to protect them against high carbon prices. It was agreed by the outgoing federal government, but has yet to be implemented.
Messner said that this tool should be provided “in combination with specific support programmes for population groups that are particularly impacted.”
Many lawmakers, mindful of the 2018 ‘gillet jaune’ protests in France, are concerned that the imposition of a carbon price on heating and transport-related emissions will spark a public backlash.
Since 2021 Germany has imposed a carbon price on fuel wholesalers, gas suppliers and mineral oil companies. This year the price was raised to €55, up from €45 in 2024 and €30 in 2023. For 2026, the law allows a ‘price corridor’ between €55 and €65 per tonne.
Currently the money from Germany’s carbon pricing is combined with revenues from the EU’s ETS 1 scheme which covers industry and energy, and transferred into Germany’s climate and transformation fund, which finances energy efficiency improvements and the expansion of renewables.
Germany’s carbon pricing is a national-level precursor to an EU-wide ETS 2 scheme, which will kick in from 2027.
ETS 2 contains a mechanism to dampen the carbon price if it rises above €45 per tonne, but several German lawmakers and academics have warned that this may not protect EU households from high costs.
[Edited by Donagh Cagney/Owen Morgan]
