Germany to raise carbon price to 25 euros in 2021: sources

BERLIN (Reuters) – Germany’s federal government and states have agreed to raise the price for carbon emissions to 25 euros ($27.56) per tonne from 2021, from the 10 euros originally planned, government sources said on Monday.

The lower house of parliament last month approved a major climate protection package to help Germany achieve its target of cutting greenhouse gas emissions to 55 percent of their 1990 level by 2030.

It envisaged a price of 10 euros a tonne for carbon dioxide emissions from heating and transport, but the opposition Greens, economists, business groups and activists criticized the amount, saying it was far too low.

The government sources said the carbon price would now increase annually, hitting 55 euros in 2025.

All the revenue from the higher carbon price will be used to reduce the fee consumers have to pay to support the country’s shift toward renewable energy, Germany’s Sueddeutsche Zeitung reported, citing the German dpa news agency.

Other German media said that the agreement paved the way for VAT on state-owned rail operator Deutsche Bahn’s train tickets to be reduced from Jan. 1, 2020. The government wants to make railway trips cheaper to discourage people from taking domestic flights.

Sueddeutsche Zeitung said the entire climate package could be passed by the Bundesrat upper house of parliament on Friday.

Reporting by Holger Hansen; Writing by Michelle Martin; Editing by Joseph Nasr, Kirsten Donovan

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