The dispute over how to share the cost of the CO2 price is turning into an election debate and posing many questions for the housing industry. But regardless of who pays the costs, all parties must cooperate to achieve the climate goals.
The 2020 climate balance showed that among all sectors, only the building sector failed to meet its climate goals. Yet it is precisely its influence on a climate-neutral Germany that is of enormous importance. Almost 20 % of all CO2 emissions are still caused by heating in buildings; every fourth heating system is 25 years old or older.
To ensure that the climate goals set by the government are achieved, a CO2 price on the emissions of gasoline, gas and heating oil has been in place since the beginning of the year. A charge of 25 euros is levied per ton of CO2 emissions. For an apartment of 140 square meters, this means about 165 euros in costs per year. The law was introduced with the decision that this amount would be borne by the tenant. However, the debate as to whether the landlord should share in the costs has existed for just as long.
UPDATE - July 15, 2021: How German parties want to distribute revenues from the CO2 price. A look at the election programs
It’s clear now: all costs for the CO2 price have to be paid by the tenant. At least for this year. How the future government will decide on the distribution of costs and whether landlords will also be asked to pay next year remains to be seen. Union chancellor candidate Armin Laschet is sure that also landlords must take over costs in the near future. According to the CDU/CSU, the reason that this is not yet happening in 2020 is mainly due to the fact that no fair distribution system has been found in the short time available.
But what will actually happen to the revenue generated by the CO2 price, which is already running into billions this year? A look at the election programs shows that the parties have very different views on this.
CDU/CSU:The CDU/CSU parliamentary group refers to a uniform Europe-wide CO2 price. For the time being, there is no mention of landlords participating in the CO2 price. However, an expansion of emissions trading in the sectors of air traffic, mobility and heat is focused on. The revenues from emissions trading are to be returned in full to the citizens and the EEG levy is to be abolished immediately in this context.
SPD: The opposition sees the CO2 price in particular as an incentive for landlords to modernize heating systems and install energy-efficient equipment. They therefore see a participation of the landlord in the costs as inevitable. TheSPD would also like to abolish the EEG surcharge and cover the resulting costs for the federal budget with the revenue generated by the CO2 price. In order to avoid social injustices associated with the CO2 price, compensatory measures are to be examined. The taxation of large digital corporations and a CO2 cap and trade tax are also being considered.
Grüne: The Grüne believes that the CO2 price of EUR 25 per ton of emitted CO2 is far too low.They are calling for an increase to EUR 60 per ton of emissions by 2023. If the climate targets are to be solved via the CO2 price alone, the Grüne believes that a social imbalance is unstoppable. Sustainability should not be an issue of social status. Accordingly, the party also aims to return all revenues generated by the CO2 price in full to the citizens. In the form of a so-called "Energiegeld", repayments are to be made transparently per capita. Low-income earners in particular will benefit from sustainable, climate-friendly behavior.
FDP: With regard to cost distribution and social justice, the FDP does not make any statements in its election program, but emphasizes that charging for emissions is the right thing to do. It should start in Germany, and will only end when there is an equal, market-based CO2 price worldwide. Overall, however, they want to sharply reduce energy taxation and abolish the EEG levy. Furthermore, there is talk of a climate dividend, an annual flat-rate contribution for all citizens.
Die Linke: There is little or nothing to be read about the CO2 price in their election program. They are critical of emissions trading because it does not contribute to climate protection. They are in favor of reforming emissions trading at EU level so that any abuse of trading can be ruled out.
AfD: Only the election program of the Alternative für Deutschland says even less about the CO2 price. The AfD's position is to abolish any form of CO2 price.
UPDATE - June 23, 2021: The decision for 2021 has been made
If the opposition still seemed to win the approval of the CDU/CSU parliamentary group for sharing the costs of the CO2 price in May, all efforts have failed. The parliamentary group has finally spoken out against landlords sharing the costs for 2021. The corresponding passage in the immediate climate protection program has been deleted. Once again, they emphasize that tenants will only change the way they use resources if they alone bear the costs. And that, they say, is the primary objective of the CO2 price: to "steer the behavior" of tenants.
So that in particular income-weak households are not additionally loaded by the CO2 price, there is since January anyway for all with requirement on housing subsidy 10% more at support. SPD and Grüne are nevertheless disappointed by the decision. They imagine "social climate protection" differently. An extra payment is important, they say, but it is not nearly enough to fully cover the new costs incurred. Environmental associations and the tenants' association are also angry and support the opposition's argument.
Which climate protection measures are implemented is the task of the coming German government. What is certain is that Germany should have achieved greenhouse gas neutrality by 2045. Five years earlier than originally planned, we are striving for a state in which we only emit as much CO2 as we can neutralize. This is an important goal for which tenants and landlords must work together and also independently of the CO2 price. Through resource-conserving use of heating fuels, energy-efficient systems, monitoring of technology and digitalized, sustainable processes.
UPDATE - June 2, 2021: The parties are still at odds over landlord participation
With the climate pact in mid-May, the idea manifested itself that tenants and landlords pay equally for the CO2 price. In order for this regulation to be passed as law before the end of June and come into force on January 1 2022, ministries and the coalition initially agreed on it. Shortly before today's federal cabinet meeting, however, the agreement was over turned by the CDU/CSU parliamentary group, illustrating the extent to which the issue of the CO2 price is already a topic of the election campaign.
In order to relieve the tenant, SPD and GRÜNE are expressly in favor of splitting the CO2 price. They emphasize that the tenant has no influence on the energetic condition of the residential building. However, he alone bears the costs if old heating systems run inefficiently and cause high CO2 emissions. In contrast, the CDU/CSU parliamentary group argues that landlords should not be responsible for any wasteful consumption by tenants, because this would reduce the incentive to cut heating costs.
Benefits for climate protection and implementation of cost sharing in practice are unclear
Uncertainty in government stems from numerous unanswered questions. To what extent does sharing the CO2 price really pay off in terms of climate protection? Are tenants less likely to save on heating costs if landlords share the costs? If the law is passed, do landlords then tend to favor singles instead of families because they produce lower CO2 emissions? And how is cost sharing implemented in practice?
Regardless of who pays the costs at the end of the day, the energy transition will only succeed if both tenants and landlords actively invest in climate protection. A key driver for this is the digitization and harnessing of energy data. If energy consumption can be accessed by tenants and landlords in real time and independently of a third-party provider, greater transparency is achieved in consumption and the associated individual CO2 emissions, which in turn encourages cost savings. The landlord through an efficient heating system, the tenant through a resource-conserving approach to heating.
Digitalization and transparency in handling energy data reduces CO2 emissions
Partners like KUGU enable such insight into one's own energy data. KUGU is a modular saas solution for independent energy management of buildings. By combining submetering and metering, real estate and energy companies can manage their energy data completely independently via a portal, check the efficiency of their systems, generate operating cost statements and thus make themselves independent of metering service providers. A connected resident app also gives tenants an insight into their own consumption and allows them to optimize their behavior accordingly. Because even if many questions regarding the CO2 price are still unresolved, it is certain that all parties must become active for climate protection.
Do you have questions about the CO2 price or would you like to gain more insight into your energy data? We look forward to hearing from you!
Marketing Manager, KUGU Home GmbH