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German cabinet passes energy-climate package

June 20, 2008

The German government is putting its faith in an intelligent energy steering system and in incentives to save energy. Examples include road charges for heavy good traffic, exacting energy standards for residential buildings, consumption-based heating bills and modern electricity grids. To this end, the German cabinet approved the second phase of a major energy-saving and climate-protection package on Wednesday 18th June, aimed at cutting greenhouse gas emissions by 40 per cent of 1990 levels by 2020.

Rising energy prices and the threat of climate change are a huge challenge to industrialised societies and their policies. Harmful emissions of carbon dioxide simply must be cut significantly.

"40 percent of CO2 emissions are caused by the building sector, while traffic and transport generates 30 percent," said the German Minister for Transport, Building and Urban Affairs, Wolfgang Tiefensee, speaking after the decision of the Cabinet. Thus, alongside industry and the transport sector, it is up to home owners, tenants and consumers to take action.

The second part of the Integrated Energy and Climate Programme of the German government thus takes a two-pronged approach. Firstly, energy must be used even more efficiently. Secondly, renewables ought to account for a larger percentage of the energy mix than has hitherto been the case. That will make us less dependent on imported fuels and keep the financial burden on businesses and individuals down to an acceptable level.

The German Cabinet adopted a first major climate package last year. This overall package makes Germany the only country so far to translate climate protection agreements into programmes and national legislation, according to Environment Minister Sigmar Gabriel. For a good reason! Germany aims to prove in this way that climate protection can go hand in hand with economic growth.

On Wednesday 18th June, the multinational oil company BP presented the Statistical Review of World Energy 2008, which showed that Germany registered the world’s largest decline in energy consumption in 2007. According to the report, energy consumptions in the European Union declined by 2.2 percent, while Germany had a 5.6 percent reduction.

Technologically ambitious, economically rational

It is equally clear that climate protection must not impose an unacceptable burden on businesses or on consumers. The costs entailed must be in line with economic development. To this end, innovative energy technologies are needed – technologies which also create jobs in Germany, keeping the value chain in the country.

This is why the Integrated Energy and Climate Programme aims to generate impetus for modernisation. "This is the right signal at times of unchecked rises in energy prices," declared Federal Economics Minister Michael Glos, while his colleague Sigmar Gabriel calculated how attractive the incentives now agreed are. "If you invest 10,000 euros in a new boiler or geothermal technology, you will qualify for a grant of 1,000 euros and you will save another 1,000 euros a year in operating costs." Thus, the modernisation will pay off after nine years, based on today’s energy prices. It is, however, quite possible that investments of this sort might be amortised significantly sooner.

The second climate package in detail

The law to accelerate the expansion of the high-voltage network puts in place a better environment for extending electrical transmission grids. This has become necessary because more and more energy generated from renewable sources is being fed into the grid. Trans-national trade in electrical energy is also expanding and numerous new power stations are doing their bit. The German Economics Minister called on all those affected and on environmental associations to adopt a cooperative approach to the construction of new lines.

New residential buildings and renovated old buildings will in future have to become about 30 percent more energy efficient. The new Energy Savings Law and the pertinent Energy Savings Ordinance make provision for this. If the valid energy savings regulations are contravened, fines will be imposed in future. Building contractors will be liable for damages vis à vis their clients in future if they fail to comply with regulations.

Electricity-guzzling night storage heaters are to be taken out of use in the long term.

The revised Heating Costs Billing Ordinance (for rented property) ensures that the actual consumption will be taken into greater account in future – accounting for 70 percent of the total costs rather than 50 percent to date. Other operating costs will accordingly account for only 30 percent of the total in future. Tenants thus have more control over their total heating costs, explained the Minister of Transport, Building and Urban Affairs Wolfgang Tiefensee.

The markets are to be opened for services to measure the consumption of electricity and gas. So-called intelligent meters are the choice of the future. They will show consumers better prices, and tell them where and when they can save energy.

New road charges for heavy goods traffic provide incentives to buy low-emission trucks, or to backfit older models with particle-reduction systems. The additional revenues of some 850 million euros a year are to be invested "one to one” in highway construction and maintenance, pledged Wolfgang Tiefensee.

The road tax for new cars will vary according to CO2 emissions as of 2010. This will provide an incentive to develop highly efficient engines with lower emissions of harmful substances. The main outlines have already been agreed, and the ministries responsible are now working on the tax-related details.




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