Germany’s €177bn climate budget to focus on renovations

(EurActiv, 28 Jul 2022) The German government plans to spend €177.5 billion of the federal budget on climate action and the transformation of the country’s economy between 2023 and 2026, with a focus on increasing the energy efficiency of buildings.

The cabinet adopted its draft finance plan for the so-called ‘Climate and Transformation Fund’ on Wednesday (27 July), which is part of the federal budget and is now subject to parliamentary deliberations.

“The fund is the most important financing instrument for economic modernisation and climate protection,” explained Finance Minister Christian Lindner.

The majority of funds will contribute to supporting climate-friendly building renovation (€56.3 billion).

Space and water heating currently account for around 30% of Germany’s final energy consumption. The buildings sector also missed its 2020 and 2021 CO2 emissions targets.

Much of the funding will go towards renovating the buildings in the bottom 25% of energy performance – a plan that Brussels is currently working to make mandatory through the Energy Performance of Buildings Directive.

The fund also cements a switch in priorities, away from supporting the construction of new homes to renovating existing ones.

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EurActiv, 28 Jul 2022: Germany’s €177bn climate budget to focus on renovations