Germany Floats $59 Billion Plan to Cut CO2

Germany proposes a €54 billion ($59 billion) plan to lower carbon dioxide emissions in part by raising taxes on oil-based fuels, imposing penalties on higher-polluting vehicles and subsidizing electric car sales.

Terms of the 10-year-long scheme were finalized over the weekend by Chancellor Angela Merkel’s coalition government in response to pressure by Germany’s surging Green Party to do more to meet the country’s pledge to reduce CO₂ emissions.

Members of the European Union are expected to slash their CO₂ output 55% by 2030 compared with levels emitted in 1990. Germany is well below the pace required to achieve that target.

Merkel’s plan would add about €1 ($1.10) to the cost of an average fill-up for vehicles powered by internal combustion engines, Bloomberg News estimates. The proposal also would begin in 2023 to hike incentives for EVs that cost less than €40,000 ($44,100).

Other elements in the plan would:

• Boost taxes on air travel and lower them for rail tickets
• Pay for the installation by 2030 of more than 1 million EV charging stations
• Give state rail operator Deutsche Bahn €1 billion per year to upgrade public transport and its existing rail infrastructure
• Offer grants and tax rebates for buildings that add insulation, upgrade furnaces and install more energy-efficient windows
• Ban the sale of oil furnaces in 2026
• Require that providers of heating, power and fuel for transport buy variably priced certificates that entitle them to emit CO₂