Environment - Record revenue from emissions trading again in 2023
Last year,Germany once again received a record amount from the sale of carbon dioxide pollution rights - around 18.4 billion euros in total. This is around 40 percent more than in 2022, as announced by the German Emissions Trading Authority (DEHSt) in Berlin. The DEHSt is part of the Federal Environment Agency.
According to the information, the main driver was the national emissions trading system for heat and transport. Significantly more certificates were sold there than in 2022, resulting in a 67 percent increase in revenue to 10.7 billion euros. Revenue from European emissions trading climbed by twelve percent to 7.7 billion euros.
Revenue flows into climate and transformation fund
The money flows entirely into the Climate and Transformation Fund (KTF), which is used to finance energy transition and climate protection measures. According to the German government, the money will be used to promote the energy-efficient refurbishment of buildings, the decarbonization of industry and the expansion of renewable energies, electromobility and charging infrastructure, among other things.
The massive increase in the number of certificates sold in national trading is not due to increased emissions in the transport and building sectors, according to the trading office. Based on preliminary estimates, emissions are expected to fall in 2023 compared to 2022. Rather, the reason for the increase was the high pent-up demand from companies. They had postponed the purchase of their certificates until 2023 following the decision by politicians not to raise the CO2 price in 2023. The fixed price in 2022 and 2023 was a uniform EUR 30 per certificate.
"CO2 pricing via emissions trading is a decisive lever for achieving the statutory climate targets," emphasized the President of the Federal Environment Agency, Dirk Messner. In Germany, more than 85 percent of emissions are already covered by emissions trading. This provides significant impetus for the climate-friendly restructuring of society.
UBA President calls for rapid introduction of climate money
"It is crucial that the revenue from carbon pricing is used in full to actively support the climate-neutral transformation in terms of social and economic policy," Messner continued. In this context, Messner once again called for the rapid introduction of the climate money planned by the coalition "to ensure compensation for private households even if CO2 prices continue to rise".
Against the backdrop of climate change, the pricing of carbon dioxide is intended to give businesses and consumers an incentive to use less fossil fuels. Power plants, large industrial facilities and intra-European air traffic require European allowances - they have to submit one certificate per tonne of CO2 emitted to the Emissions Trading Authority. They can acquire these pollution rights at auctions on the energy exchange in Leipzig, among other places. The number of allowances available is reduced annually in order to gradually limit emissions more and more.
European certificates average 83.66 euros
The prices for European certificates have risen in recent years. While a certificate cost an annual average of just under 25 euros per tonne of CO2 in 2020, an average of 83.66 euros was due in 2023. The highest price for certificates last year was €101.25.
In addition to the European Emissions Trading Scheme (EU ETS), which was launched in 2005, a national emissions trading system (nEHS) was launched in 2021. The so-called CO2 levy is intended to help reduce climate-damaging CO2 emissions in the heating and transport sectors. Until 2022, only the main fuels petrol, diesel, heating oil, liquefied petroleum gas and natural gas were initially part of the nETS. From 2023, all other fossil fuels such as coal were added. From 2024, the levy will also be charged on the incineration of waste. The costs will be charged to gas suppliers or companies in the mineral oil industry, for example, who will then pass them on to consumers.
The national certificates have now become more expensive. In 2024, they will cost 45 euros per tonne. The price is then set to rise to 55 euros in 2025.
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- The record revenue from emissions trading in Germany in 2023 primarily stems from the national emissions trading system for heat and transport, where significantly more certificates were sold compared to the previous year.
- The German Emissions Trading Authority (DEHSt), located in Berlin, which is part of the Federal Environment Agency, announced a 67% increase in revenue from the national emissions trading system.
- The Environmental policy of Germany aims to utilize the record sum from carbon dioxide pollution rights sales to fund various energy transition and climate protection measures, such as promoting the energy-efficient refurbishment of buildings.
- The renewable energies sector, including electromobility and charging infrastructure, will benefit from the environmental policy's funds, as incentives are needed to accelerate the transition away from fossil fuels.
- Dirk Messner, the President of the Federal Environment Agency, emphasized that CO2 pricing via emissions trading is a vital tool in achieving the statutory climate targets in Germany.
- Messner reiterated the need for socio-economic policies that make full use of the revenue from carbon pricing to support the climate-neutral transformation, particularly by compensating private households if CO2 prices continue to rise.
- The European emissions trading scheme (EU ETS) contributed to a 12% revenue increase in 2023, while the national emissions trading system (nEHS) showed a significant increase in certificate prices, promoting the reduction of climate-damaging CO2 emissions in the heating and transport sectors.
- Electromobility, which aims to transition towards sustainable energy sources, will eventually require certificates for power plants and large industrial facilities.
- In the future, the popularity of electric vehicles and renewable energy sources will drive ongoing demand for emissions trading certificates, contributing to the environmental policy's revenue and promoting a cleaner, greener Germany.
- The Federal Government is working on a transformation fund to encourage investments in energy efficiency, decarbonization, and renewable energies, which necessitates the successful implementation of emissions trading certificates and policies.
Source: www.stern.de
