Germany cuts climate fund by over 30 billion euros through 2030
Germany's government plans to cut more than €30 billion from its Climate and Transformation Fund over the coming years as part of a major overhaul of public spending aimed at easing pressure on the federal budget.
The Klima- und Transformationsfonds (Climate and Transformation Fund – KTF) finances projects designed to accelerate Germany's transition to a low-carbon economy, including renewable energy, clean industries, electric vehicles, and energy-efficient infrastructure. Under the new financial plan through 2030, spending on uncommitted climate programs will be reduced by around 30%, while some money will be redirected to support other government priorities. Existing contractual commitments will remain protected.
The government said part of the fund will instead be used to finance a €13.3 billion energy relief package in 2027, aimed at reducing electricity costs for businesses and households. The package includes subsidies for electricity grid fees, support for energy-intensive industries, and compensation for costs linked to carbon pricing as Germany continues to face high energy prices.
In addition, €2.7 billion in emissions trading revenue that would normally flow into the climate fund will be diverted to help close gaps in the federal budget. Support for the transition to electric vehicles will also be trimmed, although by a smaller amount than many other programs. Officials say the changes are intended to balance fiscal discipline with continued investment in Germany's economic modernization.
The proposed reductions have already sparked concern among environmental organizations and industry groups, which warn that scaling back climate funding could slow Germany's progress toward its long-term emissions targets. Parliament is expected to debate and approve the revised Climate and Transformation Fund alongside the 2027 federal budget later this year.