03 Aug 2021, 13:53
Benjamin Wehrmann

2021 emissions trading earnings to reach new record level for German state

Clean Energy Wire / Die Welt

The earnings from selling allowances in the European Emissions Trading System (EU ETS) for the German state look set to reach a new record level in 2021 and together with revenues from the national carbon price for transport and buildings will likely reach more than ten billion euros, reported newspaper Die Welt. Due to higher ETS prices, the auctioning of allowances alone brought about 2.4 billion euros into the state's coffers in the first six months of the year, almost on par with the 2.7 billion euros earned in all of 2020, the German Emissions Trading Authority (DEHSt) and the European Energy Exchange (EEX) found in a new report. According to the DEHSt, the current record level of 3.2 billion euros from 2019 is going to be exceeded this year, writes Die Welt. The price for an allowance to emit one tonne of CO2 has more than doubled, from 24 euros last year to 52 euros in the first half of 2021, meaning proceeds from allowance auctions have risen accordingly. Proceeds from auctions flow into the government's energy and climate fund, which is used to fund various climate action projects, such as energy efficient retrofitting of buildings, public transport expansion or the buyer's premium for electric vehicles.

Auctions are only one way in which carbon emissions are paying into the state's budget, as Germany introduced a national price on transport and heating emissions at the beginning of the year. The finance ministry expects earnings from the CO2 price to reach 7.4 billion euros and rising further as the price per tonne gradually increases, Die Welt reports. Money earned this way is supposed to be returned to consumers in order to allocate the costs of emissions reduction among income groups, for example by lowering the power bill or compensating commuters. The "just transition" question over how the costs of climate action measures like carbon pricing are affecting various groups in society is gaining traction in the national debate as parties prepare for the general elections on 26 September.

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