The fear of demonstrators taking to the streets over escalating fuel costs kept German Chancellor Angela Merkel's climate cabinet from agreeing to a higher emissions price in a much-maligned compromise announced last month, a government official said.
Merkel's landmark climate package was meant to cement the government's green legacy but instead provoked intense criticism, mainly focused on a CO2 price for transport and heating in buildings starting at €10 per tonne in 2021 and rising gradually to €35 per tonne in 2025. Patrick Graichen, director at the think-tank Agora Energiewende, called the proposal "a joke."
But Thorsten Herdan, director general in Germany's Ministry for Economic Affairs and Energy, said during a conference in Amsterdam on Oct. 2 that the threat of protests similar to the so-called "gilets jaunes" or "yellow vests" movement in France — named after the high-visibility vests worn by demonstrators who took to the streets to protest against rising fuel prices — hindered more meaningful action from the German government on the issue.
An EU-wide emissions system already covers power generators and airlines, among others, and prices for tradable certificates under the scheme have hovered between €20-€30/tonne this year.
During the negotiations, "We knew that industry just wants a clear pathway," Herdan said during a speech at the RE-Source event on Oct. 2. But a high emissions price could also provoke the ire of consumers, he added, even though the proposal already includes reducing fees to lower electricity bills.
"At the end of the day, the fear was too big," Herdan said. "We solved that problem half way."
Drawing parallels to the populist yellow vest protests in France, Herdan added that ministers had been worried about losing more support to the Greens and the "ultra-right" in Germany. Both the Greens and the far-right Alternative for Germany party have gained voters recently at the expense of the two governing parties, Merkel's center-right Christian Democratic Union and its junior coalition partner, the Social Democratic Party.
Reuters reported on Oct. 2 that the German ministries for the environment, finance, economy and transport had failed to agree on the precise set of measures in the climate package so far, although a spokesperson for the government said the details would be approved within a week.
The package, which also included measures to lift restrictions on the build-out of renewables, is still being finalized and Herdan said the CO2 price could increase slightly from the level announced. The proposals are meant to help achieve Germany's 2030 target of reducing greenhouse gas emissions by 55% compared to 1990 levels.
The RE-Source conference is aimed at corporate renewable buyers and Herdan acknowledged that spurring more investment in renewables would inevitably require a substantial price on emissions in all sectors.
