Cabinet approves KTF economic plan

08/10/2023

Source: Energy & Management Powernews

The KTF is to promote innovation and accelerate decarbonization and digitization. Among other things, the energetic building renovation and the hydrogen economy will be promoted.

The federal cabinet has approved the draft economic plan of the special fund "Climate and Transformation Fund" (KTF) for the year 2024 and the financial plan until 2027. This also includes a further 12.5 billion euros for Deutsche Bahn, as the Federal Ministry of Finance announced in a statement. The decision, which was made by circular, is intended to bundle investments in decarbonization, according to the statement. Funding priorities are the energetic building renovation, the decarbonization of industry as well as the expansion of renewable energies, electromobility and charging infrastructure.

In addition, the development of a hydrogen economy will also be promoted in its international dimension from the KTF in the future. With the takeover of semiconductor promotion, the KTF would be strengthened as an instrument for transformation. To cover the investment needs of the railroads, the KTF will also provide a further 12.5 billion euros in addition to the funds of around 11.5 billion euros provided in the federal budget, in implementation of a coalition decision in March until 2027. He added that Deutsche Bahn was also making an own contribution of 3 billion euros.

"Targeted" promotion of new technologies

"With the KTF economic plan, we are promoting innovation in Germany as a business location," explained Federal Finance Minister Christian Lindner (FDP). "We are laying the foundations for future opportunities to arise from decarbonization and digitization." He added that the government is providing targeted support for the switch to new technologies and preventing economic structural breaks from occurring. "At the same time, this also means that we must proceed with a sense of proportion when it comes to CO2 pricing, especially in view of the current weakness in growth," Lindner emphasized. He added that the subsidy from the KTF could only be an interim step anyway.

"My goal is for us to achieve emissions trading across all sectors that sets market-based incentives," the finance minister stressed. Before the end of this legislative period, he said, the conditions would be created to enable revenue from emissions trading to be paid out directly to citizens. "This must go hand in hand with a clear focus on strengthening supply policy," the FDP leader cautioned. In 2024, the planned program expenditures of the fund are, according to the ministry, a total of about 57.6 billion euros, about 21.6 billion euros above the target expenditures of 2023.

According to the information, the funding focus is the building sector (renovation and new construction) with about 18.9 billion euros. For the EEG promotion 12.6 billion euro are planned coming year. The further development of electromobility, including the expansion of the charging infrastructure, is to be supported with around 4.7 billion euros. In addition, 4 billion euros have been earmarked for investment in rail infrastructure in 2024. Around 4 billion euros will be available in 2024 to promote semiconductor production and a total of around 3.8 billion euros for the development of the hydrogen industry. Furthermore, according to the information, relief for particularly energy-intensive companies is budgeted at around 2.6 billion euros.

Author: Ali Ulucay