• German government plans to reduce funding for climate-related subsidy programs financed through its Climate and Transformation Fund (KTF) by 30%, without halting any programs.
• The KTF, which supports measures to help Germany meet its climate goals, is mainly financed through revenues from Germany's national carbon pricing system and the EU's Emissions Trading System, and will also receive €100 billion ($114 billion) from Germany's special infrastructure and climate neutrality fund over the coming years.
• Planned cuts will affect programs supporting heat pumps, electric vehicles, energy efficiency, industrial decarbonization, climate-friendly transport, energy research, energy-efficient urban redevelopment, energy-efficiency advisory services, and subsidies for low-emission commercial vehicles, buses, and rail transport.

The German government plans to scale back a range of subsidy programmes financed through its Climate and Transformation Fund (KTF) over the coming years, the Finance Ministry said on Wednesday.

The fund finances measures to help Germany meet its climate goals. It supports programmes ranging from subsidies for heat pumps and electric vehicles to energy efficiency and industrial decarbonization.

The ministry said that, in principle, funding that has not yet been committed will be reduced by 30%, although no programmes will be halted altogether. German Chancellor Friedrich Merz's Cabinet still must approve the measures.

The KTF is financed mainly through revenues from Germany's national carbon pricing system and the European Union's Emissions Trading System. It will also receive €100 billion ($114 billion) over the coming years from Germany's €500 billion special infrastructure and climate neutrality fund, equivalent to €10 billion annually.

The government has already announced that subsidies for installing heat pumps and other climate-friendly heating systems will be reduced in the coming years, with greater means-testing of applicants.

Other planned cuts will affect programmes supporting climate-friendly transport, energy-efficient urban redevelopment, energy research, energy-efficiency advisory services and subsidies for low-emission commercial vehicles, buses and rail transport, according to Cabinet documents seen by dpa.

The government described the approach as an "intelligent lawnmower" strategy, referring to broad reductions across programmes.