The largest chunk of the fresh money will be dedicated to renovation, with €27 billion earmarked for the exchange of existing oil and gas heating systems for climate-friendly alternatives such as heat pumps.

The government plans for every heating system installed after 2024 to be at least 65% fuelled by renewable energy – a de facto ban on fossil boilers running on natural gas. The plan brought the government to the brink of a coalition crisis, as the liberal Free Democratic Party (FDP) heavily opposed an earlier draft of the law.

With the €27 billion, the government is planning on easing the financial burden on households to switch to climate-friendly alternatives.

“As Federal Minister of Finance, it is important to me that we avoid excessive burdens. We provide targeted support for the conversion to new technologies and prevent economic structural breaks from occurring,” Lindner said.

The fund is also aiming to bring the Deutsche Bahn back on track with an earmarked investment of €12.5 billion in the coming years to renovate and expand its railway network. Deutsche Bahn has been plagued by delays for years, with around one-third of all trains being delayed.

Additionally, in 2024 the government is also planning on spending €4.7 billion for the expansion of the charging infrastructure for e-vehicles, and €3.8 billion for the development of the hydrogen industry.