The German Government has passed its dedicated climate fund, overruling its own spending rules.

The budget for the Climate and Transformation fund (KTF) is intended to accelerate the green transition with €212 billion to fund ‘green’ projects and has been formally adopted by the Federal Cabinet.

Originally created in 2010 and expanded from the Energy and Climate Fund (EKF), the KTF has been designed as a tool to finance the energy transformation and climate protection. The fund has become more important following the Russian invasion of Ukraine, and the fund utilises unused COVID funds and revenues from national carbon taxes and the EU ETS (emission trading system).

Spending will be spread widely, including on the German rail system that has suffered major delays in its renovation, with around one-third of all trains being delayed. Whether this constitutes ‘green’ spending od merely plugging a financing gap is a matter of opinion.

However, some monies will go to truly green projects such as expanding the eV charging network, and development of hydrogen.

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