The German government has approved a draft bill to keep the country’s national carbon price within a fixed band through 2027, preventing it from being tied to the more volatile European emissions trading market after a key European Union policy was delayed, Table.Briefings reported Thursday.
The amendment to the German Fuel Emissions Trading Act, known as the BEHG, sets a price corridor of €55 to €65 (approx. $64 to $75) per metric tonne of carbon dioxide (CO2) for 2027—the same range in effect this year.
The move was prompted by the postponement of the EU’s new Emissions Trading System for Buildings and Transport (ETS 2) to 2028. Without the legislative fix, a standing rule would have linked Germany’s national carbon price to European carbon market prices from next year, exposing businesses to potentially significant fluctuations.
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Germany’s energy and water industries association, the BDEW, welcomed several specific changes made by the Cabinet to the ministry’s original draft. In particular, the group highlighted reductions in the maximum bid volume allowed per auction and per compliance account—cut from 50% to 20%—and a restriction on the banking of allowances across years.
“Allowances from 2026 can no longer be used to fulfill the surrender obligation in 2027,” said Kerstin Andreae, chair of the BDEW Executive Board, adding that the changes lower financing costs and reduce the need for companies to set aside large sums for hedging.
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However, Andreae said further adjustments are needed, particularly on top-up price levels and auction design. The BDEW intends to push for changes during the parliamentary process and warned that without them, the government’s goal of stabilizing the national carbon price may not be achieved.
The bill must still pass through the Bundestag, the federal parliament of Germany, before taking effect.
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