(Photo: Ingo Joseph)
On Friday, Germany approved the plan to raise the price on carbon dioxide emissions by more than agreed on previously on Dec. 15. The country currently has a levy on CO2 emissions from fuel of 30 euros per ton of CO2.
The German government had initially planned to raise the price to 40 euros. However, as of last week, the price is set to jump to 45 euros starting next month in 2024, making a 50% hike from its current amount.
The new carbon price set by the government is part of a deal designed to help mitigate a budget crisis, caused by a recent ruling of the highest court, in which the government’s decision to repurpose 60 billion euros to assist the country recover from the effects of the COVID-19 pandemic was annulled.
Consequently, the state is now faced with the task of filling a 17-billion-euro hole in its 2024 budget, part of which has strongly impacted the “climate and transformation fund”.
The new levy on carbon emissions will affect prices on gasoline, diesel, heating oil, and natural gas, and will directly help fund the “climate and transformation fund”.
According to German officials, other measures also meant to solve the budget crisis are yet to be introduced.
These will include the reduction of subsidies that may result in climate damage, as well as the slight cut of spending on certain ministries.