Half of ETS revenues would help pay pension bill instead of financing green transition
The German government plans to divert €2.7 billion in revenues from CO2 permits for factories and power plants away from the green transition towards pensioners as part of budget negotiations on Monday, just days before a major overhaul of the original EU Emissions Trading System.
Since 2005, the ETS 1 scheme has required polluters to buy allowances, currently priced at around €80, for every tonne to CO2 or equivalent they pump into the atmosphere. On 17 July, the European Commission is expected to present a hotly anticipated overhaul of the scheme – partly intended to reduce the burden on industry.
Berlin, however, is busy using the revenues for its national budget. “Starting in 2027, a portion of the ETS1 revenues will be incorporated into the federal budget,” reads a 1600-page draft, seen by Euractiv, that will be decided on Monday. Some 40% of Germany’s federal budget is being spent on pensions and other social services each year.
Germany earned €5.4 billion from the ETS 1 in 2025 and the finance ministry wants to funnel half of that into the general budget. How much will be redirected in the years to come remains unclear, but the document suggests there will be an “annual amount” determined in the future.
