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23 Sep 2020, 13:30
Julian Wettengel

Germany set to partly reimburse energy-intensive companies for new CO₂ price

Clean Energy Wire

The German government plans to partly reimburse costs for the planned CO₂ price for transport and heating fuels to certain energy-intensive companies, the environment ministry said in a press release. Companies will be able to apply for financial compensation on the basis of a so-called carbon leakage regulation if the CO2 price puts them at a disadvantage in international competition, according to the proposal which still needs to be turned into regulatory text. In return, beneficiary companies will be obliged to operate an energy management system and implement measures to improve energy efficiency and reduce CO2 emissions. Less efficient facilities will receive less compensation. “It is important to me that Germany remains an attractive location for a sustainable industry,” said environment minister Svenja Schulze. “Relocating production abroad would not only affect jobs, it would not help climate action either - CO2 emissions would simply be generated elsewhere.”

The German government has decided to put a price on greenhouse gas emissions in the transport and building sectors from 2021 as a key instrument to help reach its climate targets. The national emissions trading system for transport and buildings will exist in parallel to the EU-wide ETS and cover the bulk of those greenhouse gas emissions not included in the ETS. Transport and heating fuels such as petrol, diesel, heating oil, natural gas and coal will be priced.

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