Germany plans to cut $34.2 billion from its climate and transformation fund through 2030. Those resources will be shifted to the federal government as Chancellor Friedrich Merz's administration looks to consolidate public spending. 

The climate and transformation fund provides, among other things, subsidies for heat pumps and electric cars. Under the cuts, these subsidies will only be available to lower-income people, Bloomberg reported. 

The government has argued that a subsidy program it launched to lower electricity prices for energy-intensive industries will justify cuts to the climate and transformation fund. The fund receives revenue from the country's national emissions trading system. The program requires companies receiving the subsidies to invest in making their production more climate-friendly. 

Germany has been a leader in addressing the so-called "climate crisis," which included an aggressive effort to shut down nuclear power plants and power its grid entirely with intermittent energy sources.