Under green electricity

The traffic light coalition did not come up with the energy and climate fund, or EKF for short. But it should become the major financing vehicle for the ambitious environmental policy of the new federal government. This sub-budget is soon to be renamed the climate and transformation fund, because the name then better suits the red-green-yellow new start. Instead of EKF then KTF – you should remember the abbreviation.

Because there will be debates about the KTF, as there were about the EKF, which was set up in 2011. There were and still are two reasons for this: on the one hand, the financing of the fund is a point of contention, on the other hand, the use of funds – and there above all the outflow of fund money, the essential yardstick for success or failure. Through the EKF, the federal government channeled income from EU emissions trading into a large number of programs designed to promote energy efficiency and climate protection.

Since 2021, the EKF has also received income from CO2 pricing. According to the Federal Environment Agency, a total of 12.5 billion euros came together last year – 7.2 billion from the national levy, 5.3 billion from the EU emissions trading system. In addition, the government can add money from the budget – almost 2.5 billion euros were originally planned for 2021.

A means of hoarding money

However, the grand coalition has already discovered that money can also be hoarded for the future in the EKF. And financed by credit. With a supplementary budget in 2020 – by using the opportunity to take out emergency loans during the pandemic – around 26 billion euros were added to the EKF. This happened as part of the economic stimulus package decided at the time. The traffic light is now saddled up again: With the supplementary budget for 2021, which is to be passed by the Bundestag at the end of January, an additional 60 billion euros will be pushed into the fund.

This feeds a reserve in the EKF for future measures, which thus assumes considerable proportions. Their volume is now 76.2 billion euros, because 16 billion had already accumulated before. This corresponds to about a fifth of the federal budget for 2023, which will be the first to be planned back to “normal” after the pandemic. If you add the planned expenditure of the EKF for 2021 in the amount of 26.5 billion euros, the fund currently has a budget of almost 103 billion euros.

Lots of money that doesn’t go away

How much money could actually be spent in 2021 is still unclear. But it will probably not be 26 billion euros – a look at the “10. EKF report” by the Federal Ministry of Finance from last spring, which took stock of the year 2020. At that time, the expenditure amounted to around five billion euros. That was at least two billion more than in 2019, but significantly less than the planned 8.4 billion. That was also due to the pandemic. But the EKF has been known for years for the fact that the outflow of funds does not meet expectations. The reasons are manifold: the usual start-up problems with funding programs, bureaucratic hurdles, but often also misjudgments of needs. As Groko already noticed, there are limits to energy and climate policy wishes in reality.

Which leads to the question of how the traffic light intends to manage that significantly more expenses will be incurred within a short period of time, which can then also justify the immense reserve. Whereby this huge billion-dollar reserve does not consist of “real money”. The EKF, although a special fund, has practically no assets. Both the funds accumulated so far in the reserve and the 60 billion from the new supply are only credit authorizations – the government can gradually activate these to finance current expenditure.

debts in reserve

On the one hand, this has the advantage that no loans have to be taken out yet and that, in case of doubt, the authorizations can also expire if the outflow of funds remains too low. On the other hand, these loans could be more expensive in the future than they are now – if interest rates rise again, which is only a matter of time if inflation continues to rise.

The successful measures in the EKF, in which a lot of funds were recently used, included the promotion of energy-efficient building renovation, the promotion of energy advice and, last but not least, the subsidy for the purchase of electric vehicles. The flops included funding for the charging infrastructure for e-cars and future programs for energy storage and hydrogen.

Financing of the EEG surcharge

The EKF will get a large new item of expenditure in the coming year. The coalition wants to end the financing of the renewable energy surcharge via the electricity price and pay for it from EKF funds. A total of almost 27 billion euros was expected for the levy in 2021. Even with a lower volume, it will be the largest item in the EKF from 2023.

The coalition says that you have to focus and prioritize the tasks in order to be more efficient than the Groko. Which will not be easy: the economic plan of the EKF includes 57 titles, right down to small programs for hybrid-electric flying or humus cultivation. Six ministries are involved in the EKF area: economy, environment, transport, research, agriculture, interior. So the Greens and the FDP in particular have to see how the huge reserve in the EKF can be planned and spent. Finance Minister Christian Lindner (FDP) has already put himself and the coalition under pressure: he has announced that the EKF billions should be used in the short and medium term.