Fuel Emissions Trading

The German Fuel Emissions Trading Act (BEHG) creates the basis for trading in certificates for emissions from fuels and ensures that these emissions are priced unless they are covered by EU emissions trading.

This particularly affects the building and transport sectors.

The aim is to achieve the national climate protection targets and climate neutrality by 2050. The purpose of the German national emissions trading system is to price fossil greenhouse gas emissions. The law was passed in 2019 as part of the German government’s climate package and will come into force in 2021.

In the introductory phase (2021 to 2025), the certificates will be sold at a fixed price. At the start of CO2 pricing in early 2021, a price of 25 euros / tCO2 is planned; this will rise to 55 euros / tCO2 by 2025.

From 2026, emission rights will then be auctioned off, with a price corridor with a minimum price of 55 euros and a maximum price of 65 euros per emissions certificate. It is not yet known whether a price corridor will also be specified in the following years.

The obligated companies must report their emissions for the year 2021 by July 31, 2022 for the first time and submit certificates for the reporting year 2021 in the emissions trading register of the German Emissions Trading Authority (DEHSt) by September 30, 2022.

The Leipzig energy exchange EEX, which is already auctioning the certificates within the framework of the European emissions trading system (EU ETS), has also been awarded the contract to issue emissions certificates. From 2026, the emission certificates are to be auctioned there as soon as free trade is to begin.

The Fuel Emissions Trading Act will in all probability only be a national intermediate step in Germany until the pricing of the transport sector and the building sector is regulated through inclusion in the European emissions trading system EU ETS.

For tenants of buildings, however, the SESTA may become a kind of “third rent” in the coming years, depending on the type of heating in the building. In office buildings, for example, from 2025 onwards, additional monthly charges of more than one euro per square meter can be incurred if they are heated with oil.