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ENERGY

Germany to fast-track disputed €200 billion energy fund

Germany aims to fast-track a controversial plan to create a €200 billion energy fund to shield citizens and firms from historic price shocks, according to a draft law seen Friday by AFP.

Published: 8 October 2022 09:45 CEST
German Chancellor Olaf Scholz
German Chancellor Olaf Scholz pictured at the entrance of the Chancellery in Berlin on September 23, 2022. Photo: Tobias SCHWARZ / AFP

Sources said the legislation, including caps on power prices, could be presented to the cabinet as early as Monday.

The draft warns that if gas and electricity prices continued to surge without state intervention, “production stoppages for energy-intensive companies must be expected”, leading to a “downward spiral of the German economy”.

READ ALSO: German government pledges to subsidise rising electricity bills

France and key members of the European Commission have voiced concern about a go-it-alone approach by Berlin.

They are calling for EU-wide solutions to the energy crunch, aggravated by war in Ukraine that has seen key supplier Russia turn off the gas taps.

Chancellor Olaf Scholz has defended the package against the criticism, citing the potentially crushing economic blow of energy shortages this winter.

READ ALSO: German cabinet approves €300 energy relief payment for pensioners

He has also stressed that the €200 billion fund to finance support measures would be spread out over a few years until 2024.

The €200 billion is also to be pumped into an economic stability fund outside the government’s main budget, allowing the government to stick to constitutional debt rules that limit public deficits.

The head of the German Chambers of Commerce and Industry, Peter Adrian, underlined the need for extraordinary measures to weather the crisis in Europe’s economic powerhouse.

“We are threatened with a loss of prosperity on a scale that was unimaginable until now,” he told the daily Rheinische Post, noting that German gas prices were about 10 times as high as those in the United States.

READ ALSO: Gas bills in Germany will remain high despite price cap, warns economist

“If we don’t get that under control in the short term, we’re going to have to say goodbye to a lot of companies and their employees before the end of the winter,” he said.

Germany, which has been highly dependent on imports of fossil fuels from Russia to meet its energy needs, has come under acute pressure as dwindling supplies from Moscow have stoked fuel prices.

The country expects to sink into a recession in 2023, leading economic institutes said last month, citing the impact of skyrocketing energy prices.

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CLIMATE CRISIS

Germany hits emissions-reduction target in 2022

Germany kept greenhouse gas emissions under its target level in 2022 despite a coal-driven increase in pollution in the energy sector, figures published Wednesday showed.

Published: 15 March 2023 15:24 CET
Germany hits emissions-reduction target in 2022

Europe’s largest economy reduced its emissions by 1.9 percent in 2022 compared with the previous year, the federal environment agency said in a statement.

In total, Germany pumped out 746 million tonnes of greenhouse gases in 2022, 10 million tonnes less than its legal target for the year.

The drop came despite rising emissions in the energy sector, as Germany resorted to mothballed coal power plants to manage an energy crisis unleashed by the war in Ukraine.

The dwindling of important natural gas supplies from Russia sent Germany scrambling to find alternative sources of energy to heat its homes and power industry.

Emissions in the energy sector rose by 4.4 percent overall, the second consecutive year they had gone up, according to the agency.

Since 1990, Germany had managed to reduce its emissions by 40.4 percent, it said.

READ ALSO: Climate change the ‘biggest worry’ for people in Germany

But the traditional industrial powerhouse would have to pick up the pace to hit its climate targets for 2030.

Emissions needed to be driven down by six percent a year, while Germany was averaging a yearly reduction of under two percent since 2010, the agency said.

In 2022, a record 20.4 percent of Germany’s energy was produced from renewables such as solar and wind, according to the federal body.

Nonetheless, “a much faster pace in the expansion of renewable energy” was essential to hit the 2030 target, agency chief Dirk Messner said.

“We simply cannot afford this fatal dependence on fossil fuels,” Messner said.

“I had expected the energy numbers to be worse given the Russian war of aggression,” Economy Minister Robert Habeck said in a statement.

The results were “encouraging”, Habeck said, while calling on climate protection measures to be expanded “without hesitation”.

A previous study by the energy think tank Agora Energiewende calculated Germany had slightly overshot its target for 2022.

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