Overview
- Two Bundesrat committees have deferred the Bavarian-led proposal until a formal recall, leaving the initiative without a set schedule.
- Bavaria and Saxony call for a quarter of national CO2 certificate proceeds to flow directly to states and municipalities to support locally delivered climate measures.
- National ETS revenue has climbed sharply, with about €18.5 billion reported for 2024 after €16 billion in 2025 and €7 billion in 2021, currently retained by the federal government.
- Saxony estimates roughly €200 million in 2026 rising to up to €325 million by 2029, with funds earmarked for municipal heat planning, flood protection, and heat-resilient green spaces including de-sealing projects.
- Political headwinds persist, as states with Green participation express reservations and Saxony’s AfD urges abolishing CO2 pricing altogether.