Germany's national emissions trading set to begin in October

The first sell-off session of Germany’s national Emissions Trading System (nEHS) is scheduled to take place on 5 October, the German Federal Environment Agency (UBA) and the European Energy Exchange (EEX) announced. Germany introduced the nEHS in January, setting a CO2 price for the heat and transport sectors at national level for the first time, and it is seen as a key instrument in helping the country reach its climate targets. For every tonne of CO2 released during the combustion of fuel, an nEHS certificate must be acquired and entered into the nEHS register at the German Emissions Trading Authority (DEHSt), according to the UBA. The sell-off sessions will be held twice a week throughout the year. A fixed-price phase is initially planned up until 2025, during which nEHS certificates will be issued at a legally fixed and annually increasing price. The certificate sales will take place via EEX at fixed prices through 2025 and then move into an auction process from 2026 onwards. During the fixed-price phase the number of available nEHS certificates will be unlimited.

All fuels covered by the German Energy Tax Act will be included in the nEHS, including gasoline, diesel, heating oil, liquefied petroleum gas, natural gas and, from 2023, coal, among others. All companies and organisations that place fuels on the market, such as natural gas suppliers and oil industry companies, are obligated to acquire nEHS certificates. The UBA awarded EEX the contract for the nEHS sell-off platform in March following a a public tender procedure.