German Finance Ministry signals significant cuts to climate subsidies from the Climate and Transformation Fund
The Finance Ministry reported that the German government plans to scale back various subsidy programs funded by the Climate and Transformation Fund. The ministry indicated that up to 30% of uncommitted funding will face reductions, although no programs will be entirely halted. These cuts affect subsidies for climate-friendly transport and energy efficiency, implementing what the government termed an "intelligent lawnmower" strategy. The reduction effort is necessary, according to the Finance Ministry, to help consolidate the federal budget. Furthermore, the draft 2027 budget plans to redirect €2.7 billion in emissions trading revenue from the fund into the core federal budget. Exempt from these cuts are strategically important measures, such as planned discounted industrial electricity pricing. Separately, the Federal Ministry for Economic Affairs and Energy confirmed that companies can temporarily combine claims for industrial electricity prices and electricity price compensation for 2026. However, both sources highlight that the continuation and funding of these complex subsidies remain subject to legislative approval and budgetary reviews.