Germany’s emissions trading revenues rise to record 21.4 billion euros
Clean Energy Wire
Germany’s proceeds from the sale of CO2 emissions allowances for its national and the EU’s trading system (EU ETS) rose to a record 21.4 billion euros last year, an increase of 16 percent or 2.9 billion euros compared to 2024.
While income from the EU ETS remained broadly stable at 5.4 billion euros, revenues from the national system covering transport and heating rose by about 3 billion euros to 16 billion euros, said the country’s environment agency UBA, where Germany’s Emissions Trading Authority (DEHSt) is based.
The rise in income from national allowances reflects not only higher prices, but also excessive emissions in the housing and transport sectors, UBA said. Germany’s total emissions only fell marginally in 2025 because pollution from those sectors increased, think tank Agora Energiewende said earlier this week. The pressure for climate action in transport and heating is “enormous”, UBA said. The government is due to present its strategy for reaching emission reduction targets in its highly anticipated Climate Action Programme, which is due by March.
Germany channels the proceeds into its Climate and Transformation Fund (KTF) to finance climate action and energy transition policies such as energy-efficient building modernisations, public charging infrastructure for electric cars, or industry decarbonisation. Since the beginning of emission allowance sales in 2008, Germany’s total proceeds have passed 100 billion euros.
“Emissions trading has become the central cross-sectoral climate action instrument,” said UBA head Dirk Messner. “Carbon pricing provides significant impetus for the climate-friendly transformation of our society.”
The idea behind emissions trading is to put a price on CO2 pollution to make it more expensive, and thus to encourage the use of climate-friendly alternatives to fossil fuels. Large polluters such as power stations and industrial facilities need to buy EU emissions certificates, which cost almost 74 euros on average last year, nine euros more than in 2024. The number of allowances auctioned is lowered each year to gradually reduce emissions.
In contrast, Germany’s national CO2 price covers heating and transport emissions and there has been no cap on the number of allowances. Last year, prices were fixed at 55 euros, but allowances this year will be auctioned off for a price between 55 and 65 euros per tonne. The country’s national emissions trading system is set to be replaced by a broader EU-wide system for transport and buildings (EU-ETS 2) from 2028.
