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Germany Allocates €57 Billion for Green Infrastructure in 2024

21 Nov 2023

Germany takes a decisive step towards climate neutrality with a record-breaking investment of €57 billion ($63 billion) in green infrastructure for 2024. The funding, approved by the German government, reflects a substantial increase of nearly €22 billion, marking a 60.2% surge from the 2023 target

Climate and Transformation Fund Boost

The significant financial commitment is directed to the Climate and Transformation Fund, established in 2010 with a modest initial contribution. The fund, not subject to the government's regular budget constraints, is financed through European and national emissions trading and carbon taxes. Expected to rise in the coming year, these contributions aim to meet the ambitious €57 billion target.

Diverse Investments for a Sustainable Future

A substantial portion of the allocated funds in 2024, approximately €18.9 billion, will bolster Germany's construction sector. This includes subsidies for building renovations and new constructions, signaling a crucial push towards greener buildings. Additionally, subsidies for renewable energy receive a significant boost, with €12.6 billion earmarked for this purpose.

The hydrogen industry is a key focus, with €18.6 billion allocated, aligning with Germany's commitment to renewable energy transition. The transportation sector sees substantial support, with €12.5 billion designated for Germany's rail network between 2024 and 2027. Furthermore, a notable €4.7 billion is earmarked for the country's electric mobility charging infrastructure.

Reducing Reliance and Fostering Innovation

To diminish dependence on Chinese imports and foster local innovation, Germany plans to invest €4.1 billion in subsidies for local production capacity for raw materials and transformation technology. This includes solar power components. Additionally, €4 billion in subsidies is directed towards semiconductor production, part of a larger €20 billion allocation for the industry.

The move comes as global competition in green technology intensifies, with the US increasing subsidies and China maintaining its position as a major exporter of critical components for green infrastructure.

Legislative Process and Future Outlook

The Bundestag, Germany's lower house of parliament, is set to review the government's green fund plan in September. A final vote of approval is anticipated in December. The substantial investment underscores Germany's commitment to spearheading sustainable practices and combating climate change.

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