According to the BVG ruling
The traffic light needs to be rescheduled: What will happen now to the climate and transformation fund?
Received bad news from the Federal Constitutional Court: Economics Minister Robert Habeck (l.) and Federal Chancellor Olaf Scholz (r.)
© Sean Gallup/Getty Images
The Karlsruhe judges ruled that the reallocation of Corona loans to climate loans is unconstitutional. This tears a hole in the traffic light’s budget. Economics Minister Habeck in particular has to replan.
With the Climate and Transformation Fund (KTF), Germany should operate greener and more sustainably. And that too while complying with the debt brake. At least that was the plan of Economics Minister Robert Habeck, who only set up the special fund last year – and above all: filled it with unused loans from the Corona crisis. This alone caused the pot to grow by 60 billion euros. And because the KTF is a special fund that is not counted towards the debt brake, Federal Finance Minister Christian Lindner was able to plan his budget around it. Practical. A black zero despite new debts.
On Wednesday, however, strong restraints were put on this practice. The Federal Constitutional Court ruled that the reallocation of Corona loans to climate loans was unconstitutional. The 60 billion euros from the corona crisis should not have been channeled into the KTF. 197 members of the Union parliamentary group had sued, for whom the rezoning was nothing more than a “sleight of hand”.
The verdict could be an ordeal for the traffic lights. Because on One stroke, 60 billion are now missing from the budget planning. The new federal budget is therefore unlikely to be passed this Thursday as planned. The traffic light now has to decide: either it increases taxes and duties, or it cuts funds for climate investments. The decision will probably initially come down to point two, because that is the easier lever in the short term. But it is already clear that the KTF needs to be massively rebuilt.
Climate and transformation fund recently decided
It was only in August that the cabinet – including Finance Minister Lindner – approved the climate and economic plan Transformation Fund decided for 2024. Accordingly, a total of 57.6 billion euros will flow from the fund next year. The lion’s share of 47.4 billion goes to projects from the Habeck Ministry. According to the financial plan that has already been approved, a total of almost 212 billion euros will be spent from the fund by 2027. These include these projects:
- Almost 19 billion euros are to flow into funding for efficient buildings, including the social cushioning of the new heating law.
- 12.6 billion euros in financing the Renewable Energy Act (feed-in tariffs).
- Over 4 billion euros for transformation programs in microelectronics (promotion of Intel’s new chip factory).
- Around 3.7 billion euros for the ramp-up of the hydrogen economy, H2Global and the decarbonization of the industry.
- Around 2.6 billion euros for electricity price compensation to relieve companies of the costs of EU emissions trading.
- Around 1.6 billion euros for the promotion of electromobility including battery cell production.
- Around 850 million euros for energy efficiency in industry and commerce.
- Around 800 million euros for the transformation of the heating networks.
Only recently, another ten billion were added, with which the economy will be relieved of electricity prices over the next five years – initially with funds from the KTF. It remains to be seen which projects are now at acute risk because financing is in danger of being lost.
Financing secure despite the Federal Constitutional Court
The KTF itself is probably not at risk. This is primarily due to its financing, which is also secured apart from the reallocated Corona loans. The fund was established in 2010 under the name “Energy and Climate Fund” and was only renamed the “Climate and Transformation Fund” in this legislative period. Most of the time it received its funding from emissions trading and federal grants. This makes it significantly different (today) from normal items in the federal budget, as it is funded from revenue and not from tax revenue. However, up to 20 percent of the KTF economic plan can also be loans. Income and expenses must always balance each other out.
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In 2024, almost 20 billion euros, and thus a fifth of the KTF economic plan, should come from emissions trading and CO₂ certificates, plus 9.3 billion euros from additional global federal government revenue. However, these are by no means certain – the federal government only anticipates that, for example, CO₂ prices will rise and this will result in additional revenue. The largest income side is reserves amounting to 70.7 billion euros, including around 60 billion eurosRepurposing heard from Corona times. These reserves are now reduced by this amount in one fell swoop and make financing the expenses significantly more complicated.
It is difficult to estimate how large the immediate funding gap will be for the KTF in 2024. A simplified calculation, secure income (without reserves) less program expenses, falls short. On the one hand, because the global additional income is uncertain. On the other hand, because the current reserve minus the 60 billion is unclear. If you use the last reported reserve of the old energy and climate fund from 2021, it amounts to around 9.2 billion euros. Assuming that the global additional revenue is actually 9.3 billion euros, the KTF has a delta for 2024 of 19.9 billion euros. How should this be closed? Also unclear. In an initial reaction, the federal government was forced to impose a spending freeze on Wednesday.