©Алексей Филатов

Minister Habeck said: “Fossil fuels have no future in the climate crisis. The current energy crisis shows this all the more clearly. But climate action cannot work without social justice: both sides must always go hand in hand. We are therefore cutting the carbon levy by roughly one-third in the coming years. This reduces the burden on households and businesses in the current energy crisis. At the same time, we are utilising the revenues from the carbon levies paid by companies in order, for example, to finance funding programmes for climate-friendly buildings and vehicles. This benefits all our citizens and facilitates the switch to renewable energy.”

The increase in the carbon price by five euros/tonne scheduled for 1 January 2023 is postponed by a year until 1 January 2024 in order to avoid imposing a higher carbon price on households and businesses already facing much higher energy prices at the turn of the year. And in the following two years, 2024 and 2025, the fixed price required under the Fuel Emission Allowance Trading Act will be reduced by €10 in each case from the previously planned fixed price.

The revision also includes two other changes. Carbon pricing for greenhouse gas emissions from coal combustion commences on 1 January 2023. Regarding fuel emissions from waste incineration, however, the revised Act postpones the start of carbon pricing, which had been scheduled for the same date, by one year until 1 January 2024, and thus gives operators of waste incinerators more time to implement the necessary preparations to register the fuel emissions for the purpose of emissions reporting. The revised Act now provides the necessary framework for the design of the first carbon pricing for these fuels, paving the way to “normal operation” of the Act.

Following the final adoption in the Bundesrat, the official copy of the revised Act will now be produced, it will be promulgated, and is to enter into force before the end of November 2022.

Further information
Since 2021, the Fuel Emission Allowance Trading Act has regulated a national carbon pricing system for the heating and transport sectors, which are not covered by the European emissions trading system. During the introductory phase, the national emissions trading system was restricted to carbon emissions from the use of certain major fuels. Companies that market heating oil, natural gas, liquefied petroleum gas, gasoline and diesel have paid a carbon price since 1 January 2021. They are required to buy emission allowances for the greenhouse gas emissions caused by these fuels. The decision to reduce the burden of the carbon price under the Fuel Emission Allowance Trading Act postpones the price increases scheduled for 2023-2025 by one year. All of the revenues deriving from the Act are placed in the Climate and Transformation Fund. The Climate and Transformation Fund refinances measures like the complete abolition of the EEG surcharge from 1 July 2022, and also the Federal funding for energy-efficient buildings programme. The latter provides households with funding to retrofit their houses, to replace their boilers e.g. with heat pumps, and to purchase electric vehicles.

CO2 price path under old Act (per tonne)CO2 price path under revised Act
1 January 2021 to 31 December 2021€251 January 2021 to 31 December 2021€25
1 January 2022 to 31 December 2022€301 January 2022 to 31 December 2022€30
1 January 2023 to 31 December 2023€351 January 2023 to 31 December 202330
1 January 2024 to 31 December 2024€451 January 2024 to 31 December 202435
1 January 2025 to 31 December 2025€551 January 2025 to 31 December 202545
1 January 2026 to 31 December 2026 (price corridor)€55 – €651 January 2026 to 31 December 2026 (price corridor)€55 – €65