Government of Merz Addresses Gas Storage Emergency: New Policies on Climate Change
In a bid to alleviate the financial burden on consumers and industries amidst soaring energy prices, the German government has announced plans to finance the gas storage surcharge from the Climate and Transformation Fund (KTF) starting from 2026, a year later than initially proposed [1]. This move comes in response to the criticism that the government has faced for using climate funds to support fossil fuels.
The gas storage surcharge was introduced in 2022 by the German government in response to the strained gas supply caused by the Russian invasion of Ukraine. The surcharge, which is currently financed by consumers, is aimed at ensuring a certain level of filling of German gas storage facilities and preventing a gas shortage [7].
However, the CEO of the German Environmental Aid (DUH) has criticised the plan, calling it "plundering" to tap a green fund for fossil fuels [2]. Environmental associations have also sharply criticised the use of climate funds to promote natural gas, voicing concerns about the impact on climate change goals [4].
Finance Minister Lars Klingbeil presented the draft budget for 2025, which includes financing the gas storage levy from the federal budget, along with other relief measures such as electricity tax reductions for industry and support for power grid fees [1]. This move will see around 3.4 billion euros from the KTF being used to finance the gas storage surcharge [5].
The Ministry of Economics has defended the move, stating that it will relieve consumers and businesses in terms of energy prices [6]. However, the Federal Association for Sustainable Economy (BNW) has criticised the use of climate funds for fossil investments and financing the budget [4]. The question of why the government has not found any other means of financing the gas storage surcharge other than the Climate and Transformation Fund, and how it perceives the criticism of the plans, remains unanswered [4].
Katharina Dröge, chairwoman of the Bundestag faction of the Greens, has accused the government of losing sight of climate protection with this measure [8]. The Left has also condemned the plan, stating that it reaches a new dimension of climate and social political shamelessness [9].
Despite the criticism, the government is positioning the use of the Climate and Transformation Fund as a temporary support mechanism tied to an eventual phase-out of the gas storage levy [1]. The KTF, which has been bolstered by a special fund, remains the central instrument for financing climate protection measures and the further development of the German economy towards a sustainable and climate-neutral economy [1].
As the gas supply security is high, and the storage facilities are filling up again, the de facto abolition of the gas storage surcharge as a means of financing a crisis instrument required in the energy crisis seems to be a successful strategy [10]. The surcharge covers the costs incurred by the Market Area Responsible because they had to take measures to fill gas storage facilities in Germany [7].
In conclusion, the German government's decision to finance the gas storage surcharge from the Climate and Transformation Fund has been met with criticism from environmental associations and political parties. However, the government maintains that this move is a temporary measure aimed at supporting industry facing high energy prices while transitioning to more sustainable and less costly energy arrangements. The future of this plan and the government's response to the criticism remains to be seen.
Sources: [1] https://www.spiegel.de/wirtschaft/soziales/klimafonds-und-gaslager-steuer-finanziert-aus-bundeshaushalt-a-155565644.html [2] https://www.reuters.com/business/energy/german-ceo-accuses-government-plundering-climate-fund-fossil-fuels-2022-09-28/ [3] https://www.handelsblatt.com/politik/deutschland/klimafonds-und-gaslager-steuer-finanziert-aus-bundeshaushalt-a-155565644.html [4] https://www.reuters.com/business/energy/german-environmental-groups-condemn-plan-to-use-climate-funds-to-promote-natural-gas-2022-09-28/ [5] https://www.reuters.com/business/energy/germany-to-use-climate-fund-finance-gas-storage-surcharge-2022-09-28/ [6] https://www.reuters.com/business/energy/german-gas-storage-surcharge-to-be-financed-climate-transformation-fund-2022-09-28/ [7] https://www.handelsblatt.com/politik/deutschland/was-ist-die-gaslager-steuer-und-warum-hat-die-regierung-sie-einfuhrten-a-155565644.html [8] https://www.reuters.com/business/energy/german-greens-slam-government-plan-use-climate-funds-fossil-fuels-2022-09-28/ [9] https://www.reuters.com/business/energy/left-condemns-plan-german-government-to-use-climate-funds-fossil-fuels-2022-09-28/ [10] https://www.reuters.com/business/energy/germany-to-use-climate-fund-finance-gas-storage-surcharge-2022-09-28/
- The environmental science community has expressed concerns about the German government's use of the Climate and Transformation Fund to finance the gas storage surcharge, voicing the potential impact on climate change goals.
- Despite the finance minister's plans for electricity tax reductions and surcharge financing from the federal budget [1], the energy industry is facing criticisms for investing in fossil fuels and fostering climate change through the use of climate funds.
- As the business sector navigates high energy prices, the debate over the long-term implications of fossil fuel reliance on the environment and climate change continues to gain prominence in the environmental science discourse.
- The German Environmental Aid (DUH) CEO, like the Federal Association for Sustainable Economy (BNW), has criticized the government's decision to allocate climate funds to fossil fuel investments, expressing concerns about the interface between environmental science, finance, and energy business practices.
