Climate Action Plan 2030

The recently adopted Climate Action Plan 2030 includes a clear CO2 price regulation that should come into force in 2021, and definite specifications for the reduction of CO2 emissions. However, since the measures received some criticism, the government had to find a new compromise with the states. Parts of the Climate Action Plan 2030 had to be negotiated in the Conciliation Committee and while some plans of action and tax amendments to alleviate the citizens from financial pressure were initially stopped, others were endorsed. The issue at stake was the cost distribution between government and states, namely an increase in the commuter allowance, a reduction in rail tickets for long-distance transport, and the promotion of energy rehabilitation of residential buildings and homes.

Commuter rate

A rise in the commuter rate was promoted by the Union parties (CDU + CSU) and the SPD, but it was rejected by the Greens (“Die Grünen”), who considered it “unsocial and ecologically counterproductive.”1 Although the governmental measures were not intrinsically questioned, the Federal Council has finally agreed to a compromise that is supposed to relieve the citizens´ of their financial burdens:

“In 2021, the commuter rate will rise by five cents from the twenty-first kilometre on and, additionally, from 2024 onwards, it will rise by three more cents per kilometre. Low-income earners who do not have enough tax benefits should receive a mobility bonus.”2

After a VAT rate reduction for long-distance railway transport from nineteen to seven per cent, agreed by the government in December 2019, a further step has been taken, and from the first of February 2020, train cards such as the Bahncards 50 and 25 should become cheaper. Cost reductions apply to electricity rates too:

“To enable a decrease in the price of electricity for consumers, the EEG-levy should be reduced, promoting, in turn, the development of renewable energies. From 2021, an average household should initially pay for electricity approximately 60 euros less per year.”3

Cost Increase

Heating costs

Heating costs keep climbing, and, on average in 2019, gas has become more expensive by 7,6%. Oil heating, for instance, is more expensive than gas, since heating oil produces higher emission levels. Moreover, due to the regulatory steps of the Climate Action Plan 2030, from 2021, consumers will have to bear additional charges.

Gas heating vs oil heating“Given a CO2-price of 25 euros per ton, households with an energy consumption of 20,000 kilowatt-hours will have to pay additional 119 euros in case of gas heating, and 158 euros in case of oil heating.”4

Gas heating vs oil heating

“Given a CO2-price of 25 euros per ton, households with an energy consumption of 20,000 kilowatt-hours will have to pay additional 119 euros in case of gas heating, and 158 euros in case of oil heating.”4

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