Federal Environment Agency (UBA)
2024
Forum Ökologisch-Soziale Marktwirtschaft (FÖS), Deutsches Institut für Wirtschaftsforschung (DIW)
The hope is that CO2 prices will help to redirect industry and the economy, saving CO2 and protecting the climate. But does it work?
Our report for the German Environment Agency shows that yes, significant savings can be achieved, but only with the right communication strategy.
We conducted the study together with the Forum Ökologisch-Soziale Marktwirtschaft (FÖS) and the German Institute for Economic Research (DIW). It forms the basis for the second progress report of the German government, which it must publish in 2024 in accordance with the Fuel Emissions Trading Act (BEHG).
The sharp price increases for all fuels during the energy price crisis of 2022/2023 are mainly due to higher product costs. The CO2 price also has an impact on end consumer prices, but its share of energy prices has been low so far:
The German government’s 2024 projection report calculates that national emissions trading will save 9.2 megatons of CO2 equivalent in 2030. Of this, around 7.1 tons will be saved by the transport and buildings sectors.
In our report, we have estimated the steering effect of the Fuel Emissions Trading Scheme on CO2 emissions using four sensitivities:
The results suggest:
We have estimated the effect of national emissions trading on the development of CO2 emissions in the transport and building sectors. Among other things, the effect on the fleet structure of passenger cars and heavy goods vehicles, on the development of sales and stocks of heat generators, and on consumer behavior were examined.
Background: National emissions trading is regulated by the Fuel Emissions Trading Act. The law was passed in 2019 and expands the corresponding EU directive.
Since January 2021, companies that trade in heating oil, natural gas, petrol and diesel have had to pay a CO2 price – coal was added in 2023, and waste in 2024. Companies are obliged to purchase emission rights in the form of certificates for the greenhouse gas emissions caused by their products. Since the beginning of 2024, the CO2 price has been 45 euros per tonne of CO2. By 2026, the price is expected to rise to up to 65 euros per tonne of CO2.
To the study (UBA website, in German)
To the 2022 evaluation
Project team: Alex Auf der Maur, Andreas Brutsche, Paurnima Kulkarni, Dr Noha Saad, Dr Andreas Kemmler, Karsten Weinert, Marie-Luise Zwicker
Last update: 18.12.2024
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