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Germany’s fund for climate action and energy security is some $13.2 billion (12 billion euros) short on resources from funds to be allocated by 2026, sources with knowledge of the matter told Bloomberg on Tuesday.
Last year, the federal government of Germany moved to create a $195.5 billion (177.5 billion euros) fund to support climate action, energy security, and help households and businesses with energy costs between 2023 and 2026. Industry decarbonization, the implementation of a hydrogen strategy, funding for buildings efficiency and energy efficiency are being financed by the fund.
But it seems now that the commitments in the fund are already $13 billion over the planned funding through 2026, according to Bloomberg’s sources. The estimated shortfall does not include funding for replacing oil and gas heating systems with more environmentally-friendly alternatives.
The deficit in the so-called Climate and Transformation Fund (CTF) 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.
Last week, the German government 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 last week 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.
According to the draft bill approved by the government and seen by Reuters, a switch to renewables for heating could cost Germans around $10 billion (9.16 billion euros) every year until 2028.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.