2024-08-21 06:09:35
156 million tons of CO2 by 2030
Germany spends billions on climate-damaging subsidies
19.08.2024Reading time: 3 min.
Every year, the federal government spends billions on subsidies. A new report shows that a large part of the money goes to projects that are harmful to the climate.
Numerous state subsidies totaling 35.8 billion euros lead to higher CO₂ emissions and thus harm the climate. This is the result of a report for the federal government on the greenhouse gas impact of subsidies, which was published on Monday. The transport sector has by far the largest share of climate-damaging subsidies, with a volume of 24.8 billion euros.
The report, prepared by the Öko-Institut and five other scientific institutes, had been available to the Federal Ministries of Economics and Finance since November, but had not initially been published. The Öko-Institut stated that the date of completion of the investigation was November 10, 2023, and that the “completion of the technical processing” of the 150-page text would be July 31, 2024.
According to the report, the climate-damaging subsidies, if maintained, would result in around 156 million tonnes of CO₂ being emitted between 2023 and 2030 than without these benefits. In addition to the transport sector, the subsidies also affect the agriculture (EUR 4.7 billion), industry (EUR 4.1 billion), energy (EUR 2.1 billion) and buildings and forestry sectors.
Conversely, reference is also made to other government aid that would help reduce CO₂ emissions by 250 million tons during this period. A spokeswoman for the economics department said the report could “provide a basis for discussion” for further action. She justified the delay in publication with a “technical exchange” that “took some time”.
A spokesman for the Federal Ministry of Finance clarified: “There are no plans to make any changes in the coming fiscal year on the basis of this report.” From the ministry’s point of view, not all of the items mentioned are subsidies, such as the travel allowance.
Environmental and climate associations, however, are urging action. “There is an urgent need for action, particularly in the transport sector,” explained Christiane Averbeck, Executive Director of the Climate Alliance. “The federal government must finally reform company car taxation, diesel tax relief and travel allowances.” The environmental association BUND also called for a “departure” from the previous subsidy practice.
According to the report, the main factors contributing to higher CO₂ emissions are the energy tax concessions for companies (26.8 million tonnes of CO₂ in the period 2023 to 2030), the tax concessions for diesel fuel (25.7 million tonnes) and the electricity tax benefits for companies (25.2 million tonnes). Also mentioned are the reduced VAT rate for meat and other animal products (17 million tonnes), the flat-rate travel allowance (16.4 million tonnes) and the flat-rate taxation of privately used company cars (7.9 million tonnes).
According to the report, the largest loss of state revenue in 2020 was caused by the tax rebate for diesel at EUR 9.5 billion. The tax relief for company cars costs six billion euros, and the travel allowance costs EUR 5.3 billion. Revenue losses of two billion euros are due to the tax exemption for aviation fuel on international flights, plus one billion euros for the VAT exemption for international flights.
Among the subsidies that promote climate protection, the federal subsidy for efficient buildings is mentioned first, with a CO₂ saving of 53.6 million tons by 2030, followed by the promotion of energy efficiency in the economy (40.4 million tons). The subsidies for the purchase of electric cars, which have since been abolished, could therefore have saved 15.4 million tons of CO₂ if they had been continued.
In total, more than 100 subsidy cases were examined for the study. In addition to the Öko-Institut, the institutes involved were Fraunhofer ISI, IREES, ifeu, Prognos and GWS.