Germany enters 2021 with price on transport and heating emissions

Germany stepped up the fight against climate change at the start of the year with a national CO2 price in transport and heating, but many environmentalists say the scheme will not do enough to lower emissions. The country's national emissions trading system applies to fuels such as petrol, diesel, heating oil and natural gas."Germany must become greenhouse gas neutral by 2050. This will only work if all sectors play their part. National emissions trading for fuels in the transport and heating sectors is an important step, because it means that their CO2 emissions will also carry a price," said Dirk Messner, head of the country's environment agency (UBA). He added that the rise of retail prices for fossil fuels will increase incentives to "save energy for heating and hot water, a more economical car or switching to cycling, bus or train."

Germany's national emissions trading system started on 1 January with a fixed price of 25 euros per tonne of CO2, which translates into a price increase of around 7 cents per litre of petrol, 8 cents per litre of diesel, 8 cents per litre of heating oil and 0.6 cents more per kilowatt hour of natural gas, according to UBA. The fixed price will gradually increase to 55 euros by 2025. From 2026, the price will be determined in auctions with a price corridor of 55 to 65 euros set for 2026.

But environmental activists claim the price is too low to really make an impact. Christiane Averbeck, director of Climate Alliance Germany, told afp the carbon price will not "make the necessary contribution" to helping the country meet its commitments under the 2015 Paris climate agreement, because it allowed too many exceptions for "entire branches of industry" and was pegged too low to really change behaviours. In a commentary for business daily Handelsblatt, Klaus Stratmann also wrote that "the effect on the climate is likely to be modest at first; a measurable steering effect is not to be expected."