News from 2019-03-26 / KfW Research

A successful energy transition requires a CO2-oriented energy price reform

The energy price system is in urgent need of reform to enable an efficient energy transition in Germany. Adequate incentives for low-emission technologies cannot be set without uniform CO2 pricing in all sectors. The price distortion is hampering the sector coupling and integration of renewables.

Experts have engaged in a multi-year discourse that has now led to a very broad consensus. The common objective is to adopt a CO2-oriented reform of energy price components set by the state that takes into account redistribution effects. A number of robust expert opinions are now available that outline clear recommendations for action. However, implementing these recommendations requires a strong political will and commitment to climate action.

A successful energy transition requires a CO2-oriented energy price reform

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Economic Research

Economic Research

Economic development in Germany and around the world, studies on topics relevant to society such as environmental and climate protection, demography, globalisation, innovation and sustainability, impact of KfW promotional programmes.