The Federal government of Germany has launched a law to introduce a national CO2 emissions trading system for fuels, such as gasoline, fuel oil and natural gas, in order to make fossil fuel combustion for transport and heating progressively more expensive as of 2021. The draft law will now be sent to the Parliament for deliberation.
Energy distributors and refineries - subject to the energy tax - will be able to trade emission certificates as of 2021, while plants that are already subject to the EU Emission Trading Scheme (ETS) will be exempted from the national CO2 price system. A fixed CO2 price of €10/t will be introduced in 2021, corresponding to €2.8c/l of gasoline, €3.2c/l of diesel and fuel oil and €0.2c/kWh of gas. The price will be doubled to €20/t in 2022, and will be raised again over the 2023-2025 period (rising fixed price of €25/t to €35/t). In 2026, the emission certificates will be auctioned in a corridor of €35/t to €60/t; the price range for the period starting in 2027 will be determined in 2025.
In return, the revenues will be returned to the citizens via reductions in the electricity price, the distance allowance and the housing allowance, or they will be invested in climate protection measures.
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