Germany plans to redirect a substantial share of its revenue from the European Union’s Emissions Trading System (ETS) to the federal budget starting in 2027, with the money intended for pensions rather than climate and industrial transformation. A draft budget obtained by Euractiv confirms that Berlin will move 2.7 billion euros from the Climate and Transformation Fund (KTF) – financed by ETS 1 receipts – into its general spending.
In 2025, Germany earned 5.4 billion euros from ETS 1, and the finance ministry plans to allocate half of that sum to the general budget. The document suggests that future transfers will be pegged to an annual quota, though the exact amounts remain unspecified. The KTF fund, originally designed to support green investments and energy transition, will shrink accordingly.
The decision has drawn sharp criticism from industrial lobbies. The German Steel Federation (WV Stahl) called the planned consolidation a warning signal for the country’s competitiveness.
Industrial backlash and calls for reform
– The planned consolidation of the Climate and Transformation Fund must not lead to a reversal of the recently introduced measures lowering energy prices as early as next year. On the contrary, the revenues from emissions trading generated by industrial companies must be channeled back to industry in full – said Kerstin Maria Rippel, president of WV Stahl. She argued that this is a prerequisite for strengthening competitiveness and supporting the transition to climate neutrality.
The announcement comes at a sensitive moment for Europe’s energy-intensive sectors, which face high electricity costs partly due to carbon pricing. According to European Commission data, the share of ETS in electricity prices ranges from 11 to 24 percent across EU member states, but in countries like Poland it reaches as high as 50 percent.
Wider EU context and Polish demands
The European Commission is set to unveil a long-awaited reform of the ETS system on July 17, aiming among other things to reduce burdens on industry. Poland, which secured concrete commitments from the Commission during the EU summit in Brussels in June, is pushing for an increase in free emission allowances for energy-intensive sectors and for strengthening the Modernisation Fund, which benefits lower-income member states.
Warsaw argues that the debate on ETS reform is inseparable from discussions on energy prices, economic competitiveness, and the need to lower costs for industry. The German diversion of ETS funds to pensions rather than industrial decarbonisation is likely to sharpen tensions among EU capitals ahead of the Commission’s proposal.
Źródło: WNP.PL, Fot. RaffMaster / Shutterstock
