Financing of the Climate Action Programme is covered by the supplementary budget for 2020 and the ECF financial plan (2020–2023), which were approved on 2 October 2019. Between now and 2023, the German government is investing €54bn in climate-friendly infrastructure, technologies and social equity.
Fiscal promotion of electric mobility
An important measure being spearheaded by the German Finance Ministry is the Act on Tax Incentives for Electric Mobility ( Gesetz zur steuerlichen Förderung der Elektromobilität ), which is designed to increase the number of low-emission passenger vehicles on the road. Fiscal promotion of electric mobility is being implemented as part of the 2019 Annual Tax Act ( Jahressteuergesetz 2019 ). The aim is to reduce pollutant emissions from road vehicles at source. The significant reduction of CO2 emissions will help to maintain clean air, especially in cities. Promoting electric mobility will thus contribute substantially to making passenger and freight transport greener.
The aim is to achieve registration of 7–10 million electric vehicles in Germany by 2030. The Act on Tax Incentives for Electric Mobility contains a large number of measures designed to contribute to significantly increasing the share new vehicle sales accounted for by vehicles with alternative drive units and thus to reducing the CO2 emissions of passenger vehicle traffic accordingly:
- Taxation of company cars: extension of the existing special rule for electric vehicles
- Special depreciation allowance for electric delivery vehicles
- Trade tax relief for renting and leasing of electric vehicles
- Extension of tax exemption for charging current and of flat-rate taxation for the transfer of ownership of charging equipment
- Tax-exempt public transport passes for employees and introduction of flat-rate taxation for these passes
- Extension of tax exemption for the provision of company bicycles or electric bicycles to employees
- Extension of tax exemption for private use of company bicycles or electric bicycles
The use of sustainable energy and the sustainable production of batteries are particularly important aspects of promoting electric mobility. About a third of the value-added of an electric vehicle is accounted for by production of the battery cells, which is why production of battery cells in Germany and Europe is of great interest in terms of industrial policy. At the same time, sustainable CO2-optimised battery production in Europe can result in a significant reduction of CO2 emissions in cell production. The growing share of electric drive units also depends on sufficient renewable electricity being produced and electricity grids having sufficient capacity. (For hydrogen fuel cell vehicles, the same applies in regard to the availability of hydrogen).
From road to rail
Between now and 2030, the German Finance Ministry together with national railway operator Deutsche Bahn plan to invest €86bn in renewing the rail network. Capacity is being greatly increased with the introduction of digital control command and signalling to key routes and the use of digital technology in signal boxes. Bottlenecks in the rail network are being removed. In addition, clock-face scheduling will be introduced, and the electrified network will be widened and consolidated. Federal subsidies for public transport, which also strengthen the local public transport system, will be continuously increased over the next few years. In addition, from 2020 to 2030 the federal government will increase its equity stake in Deutsche Bahn by €1bn each year, thus allowing the latter to invest more in modernisation, in expansion and electrification of the rail network and in the railway system.
Flights are frequently cheaper than train tickets, which creates false incentives from a climate action point of view. The German Finance Ministry will therefore submit legislation to increase aviation tax by an amount that will allow the rate of VAT on rail tickets for intercity routes to be cut from the current 19% to the reduced rate of 7%. This will make rail travel 10% cheaper. Reform of the Aviation Tax Act ( Luftverkehrsteuergesetz ) will prevent dumping prices for air travel by prohibiting airlines from selling tickets at a price below the applicable taxes, charges, surcharges and fees.
Investment in bicycle paths
The federal government will increase the attractiveness of cycling by further improving road safety and road traffic conditions for cyclists. To this end, the federal government will invest in the creation of a cyclist-friendly environment that will benefit everybody and reduce CO2 emissions:
- Expansion of bicycle fast lanes and cycle paths on trunk roads
- Special programmes for urban/rural cycling to ensure equal opportunities for bicycle transport (secure and modern parking facilities and expansion of infrastructure for cargo bikes)
- Financial support for investment measures by the Länder (states) and local authorities in bicycle networks, secure and modern parking facilities and multi-storey bike parks, cycle path development on trunk roads and better infrastructure and conditions for cargo bikes
These massive investments and the related infrastructural improvements will also reinforce the trend towards increasing use of electric bicycles and other new forms of mobility.
Transparency and results measurement
In order to achieve the 2030 climate action targets in a reliable and plannable manner, the annual reduction targets (“sector targets”) based on the Climate Action Plan 2050 will be enshrined in law for all sectors. This approach achieves the greatest possible degree of transparency and results measurement. Each year the federal government will accurately assess overall compliance with the 2030 climate targets as well as progress made in the individual sectors. An external body of experts will support the government in this task. In this way, the federal government will ensure objectivity in assessing whether the climate targets are being reached. The cabinet committee on climate action (“climate cabinet”), which currently has a fixed-term mandate, will be established on a permanent basis and tasked with reviewing the effectiveness, efficiency and target accuracy of the new measures. If a particular sector is not complying with its statutory goals, the responsible minister will present the climate cabinet, within three months of the emissions data being confirmed by the expert body, with an immediate action programme that will make the necessary adjustments. On this basis, the climate cabinet will decide how the Climate Action Programme 2030 should be jointly adapted to ensure that the underlying targets are reached. In this connection, the climate cabinet will also check whether adjustments should be made to the annual sector budgets.