Germany rejects EU call for more money to fight climate change

German finance ministry says EU budget is big enough already

Cutting emissions to net zero by 2050 will require funding of large-scale greenhouse gas removal projects (PA)

The German government is resisting a plea by Brussels to provide more funding to get the EU's flagship climate change policy off the ground – in a blow the continent's decarbonisation hopes.

Commission president Ursula von der Leyen on Tuesday unveiled details of the bloc's ambitious €1 trillion Green Deal, alongside a call for additional funds for the EU budget to make it happen.

But Germany's finance ministry has already started the year by rejecting calls for more funding, stating that the current EU budget is sufficient to meet the continent's climate goal of going carbon neutral by 2050.

The ministry also dismissed the idea of increasing the capital limit on the European Investment Bank, which Ms von der Leyen had suggested could also help close the funding gap.

A response to an MPs' written question provided by German ministers last week said the federal government sees "sufficient leeway to provide the necessary funds to achieve the climate protection goals by setting priorities" rather than increasing funding.

Finance minister Bettina Hagedorn was writing to Green MP Franziska Brantner, who had asked the question. Ms Brantner accused her country's government of having "torpedoed" climate goals behind the scenes despite supporting them in public.

The €1 trillion Von der Leyen investment plan includes a new "Just Transition Mechanism" to compensate and regenerate areas that currently depend on carbon-intensive industries like coal mining.

Ms von der Leyen, who leads the EU's executive arm, has made the "green deal" the centrepiece of her mandate, but needs to convince fossil-fuel dependent countries like Poland that it is worth their while.

But on the other side, her Commission is also up against a spendthrift German government that revels in running budget surpluses and wants to limit what it gives away in upcoming EU budget negotiations.

European Commission President Ursula von der Leyen (AP)

Ms von der Leyen says that under the broader investment plan, half of the cash would come from the EU budget. National governments would also contribute €100 billion, with €300 billion from the private sector.

Another €7.5 billion would be come from the EU's own 2021-2027 budget to act as seed funding to leverage a further €100 billion in investment.

The IPCC, the global authority on climate change, says limiting warming to 1.5C – widely regarded as a tipping point – will require carbon emissions from 2017 levels to be cut in half by 2030, with full carbon neutrality by 2050.