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28 Oct 2021, 13:40
Sören Amelang

Germany must buy 22 mio CO2 allocations following EU climate target miss

Clean Energy Wire / Reuters

Germany will have to buy 22 million emissions allocations after failing its 2020 climate targets under the EU's effort sharing scheme, and has already approached other EU states that exceeded their targets. "We are talking to different countries about this, but these are confidential negotiations," the country's environment ministry told newswire Reuters, according to an article carried by Wirtschaftswoche. The EU said earlier this week that the bloc as a whole achieved its main climate targets, but only 21 member states reached their national targets. "This means that Bulgaria, Cyprus, Finland, Germany, Ireland and Malta will need to use flexibilities, such as buying emission quotas from other EU countries, to comply with their legal objectives," the European Environment Agency said. Germany reached its self-imposed 2020 climate target of cutting total emissions by 40 percent compared to 1990 mainly due to the effects of the pandemic. While emissions in the energy sector dropped significantly, the CO2 output reduction in sectors such as transport, buildings and agriculture was insufficient to comply with the EU effort sharing target.  

Buying emissions allocations will not be expensive because many eastern European countries have many surplus quotas which will expire from 2021 and can't be transferred, according to the article. But costs are set to increase sharply in 2021 because emissions are expected to rise significantly following the 2020 dent. Only last year and in expectation of falling emissions, the German government had ceased to allocate a budget for a possible 2020 EU target miss.

Greenhouse gas emission limits for EU countries are set and pursued in two different areas: the so-called emissions trading system (ETS) sectors of power generation, energy-intensive industries and civil aviation, and the non-ETS sectors transport, buildings, waste, and some smaller industries and agriculture. Emissions in the non-ETS sectors are limited by an EU-wide target and split up into specific member state targets under the EU Effort Sharing Scheme. Germany’s allocated emission reduction target for 2020 over 2005 was minus 14 percent, compared to a reduction of 10 percent in the entire EU. 

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