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Germany’s government approved on Wednesday investments in green energy worth $63 billion (57.6 billion euros) for 2024, a 60% increase compared to this year’s targeted spending.
For the period 2024 through 2027, the cabinet agreed to boost the investments in the so-called Climate and Transformation Fund to $233 billion (212 billion euros), an increase of around $33 billion (30 billion euros).
The special fund, not part of the regular German budget, was created to help the energy transition and green investments in Europe’s biggest economy on its road to net zero. Industry decarbonization, the implementation of a hydrogen strategy, funding for buildings efficiency, and energy efficiency are being financed by the fund.
Earlier this year, reports emerged that the Climate and Transformation Fund, known as KTF in Germany, was some $13.1 billion (12 billion euros) short on resources from funds to be allocated by 2026. The deficit suggests that a faster transition away from fossil fuels would cost much more than the German government thought in the summer of 2022 when the fund was created.
In April, the German government also voted on a bill to ban most oil and gas heating boilers in new and oil buildings from 2024 as part of a plan to reduce emissions.
The ruling coalition in Germany has decided that nearly all new heating systems should run on 65% renewable energy, with exemptions for homeowners aged over 80 and for households with the lowest incomes.
Industry associations and the German public disagree with the planned ban.
A Forsa survey commissioned by RTL and ntv showed in April that 78% of Germans do not approve of the bill, and only 18% think the decision to ban oil and gas heating systems is the right one.
In addition, the ruling coalition in Germany is still split on how much the domestic carbon price should rise amid stubborn inflation that could be further fueled by higher energy prices.
By Charles Kennedy for Oilprice.com
Charles is a writer for Oilprice.com