Germany has to pay several million euros for emission allowances to offset missed climate targets from the 2013-2020 period. Specifically, it failed to meet targets for harmful carbon emissions outside the European emissions trading system between 2013 and 2020, particularly in the transport and buildings sectors. State Secretary Sven Giegold therefore signed contracts with Bulgaria, Czechia and Hungary to purchase emission allowances on the margins of today’s European Environment Council. In total, Germany has to buy up more than eleven million annual emission allowances.

State Secretary Sven Giegold said: “Germany has missed overall climate targets in key sectors, particularly in the transport and buildings sectors. As a result, we are now purchasing emission rights from EU countries which over-fulfilled their climate targets. This is a retrospective slap in the face for the weak climate policies of the grand coalition, and a warning for Germany in general. If we fail to take climate action, this is not only substantively wrong, it will also cost us dearly in future. This time, we are getting off lightly. If we continue to miss our climate targets, we will have to pay much higher penalties in future. We will therefore have to work harder than ever now to rigorously progress climate action in all the sectors.”

State Secretary Giegold continued: “The best thing we can say is that the purchase of the allowances shows that a key mechanism of European climate policy works: all of the money we are paying will be invested directly in additional climate action in Bulgaria, Czechia and Hungary.”

Hungary will be funding the purchase of additional electric buses for local public transport; Czechia will be supporting improvements to the energy performance of people’s homes, and Bulgaria will be investing in its schools and other public buildings. The documentation, auditing of compliance and the reporting obligations of the states selling the allowances are also stipulated in the contracts concluded by the three countries with Germany.

Across the EU, the overall emissions ceilings for the transport and buildings sectors up to 2020 were met within the European effort-sharing mechanism, since several Member States outperformed their climate targets. Thanks to this, Germany was able to buy up unused allowances from these countries. The contractual negotiations have also helped to improve the cooperation on climate action between Germany and the three Member States.

The details of the purchase will be published once it has been fully completed by the end of February 2023 at the latest.

The new European climate targets outside the European Emissions Trading System which have been in force since 2021 in the context of the European effort-sharing mechanism are even more challenging, in the spirit of the Paris agreement, which provides for a continual review of the climate targets. The current Federal Government’s coalition agreement aims to avoid future purchases of allowances under the Effort Sharing Regulation. The sectors outside the European Emissions Trading System are transport, buildings, agriculture, waste management and smaller branches of industry.