Germany's governing parties on Friday agreed a new climate protection package worth more than 50 billion euros ($55 billion) through 2023, including a domestic carbon price for transportation and heating in buildings.
The package envisages incentives to make consumers change their behaviour and reduce emissions of carbon dioxide in their daily life. Below are key parts of the package.
Germany will introduce a carbon dioxide emission price for transport and heating in buildings from 2021, starting at 10 euros a tonne. It will double to 20 euros in 2022 and then rise by 5 euros a tonne each year to reach 35 euros in 2025.
Companies will have to buy certificates from the state for carbon emissions.
In 2026, the certificates will be auctioned in a price range between 35 euros and 60 euros a tonne.
This means car drivers will have to pay a surcharge for gasoline and diesel of up to 12 euro cents per litre.
All proceeds from the new pricing system will be re-invested in climate protection or given back to citizens.
Incentives To Go Green
The government will reduce an existing surcharge from 2021 which consumers pay via their electricity bill to support the expansion of renewable energy sources such as solar and wind.
Commuters in rural areas who don't have access to urban public transport will get a higher premium to cushion the effects of higher gasoline prices.
Germany will extend car tax exemptions for buyers of electrified vehicles until 2025. At the same time, Berlin will raise cash incentives for buying electrified cars.
The government aims to make available over 1 million charging stations for e-cars by 2030.
Germany's state-owned Deutsche Bahn railway operator will receive additional capital of 1 billion euros per year until 2030 to improve quality and speed of rail connections.
The government will also reduce VAT on Deutsche Bahn train tickets from 19% to 7% to make railway trips cheaper.
At the same time, a surcharge for flight tickets will be increased but the details still need to be hammered out.
Berlin wants to double the road toll for trucks starting from 2023 and centre the tax system for new cars on their CO2 emissions by increasing the car tax for highly polluting vehicles from 2021.