Germany makes record €18 bln from sale of CO2 emission rights

Germany’s revenue from carbon pricing rose to a record 18.4 billion euros in 2023, an increase of around 40 percent, the country’s environment agency (UBA) said. The country’s national CO2 price for heating and transport fuels was the main driver for the revenue growth, as proceeds jumped 67 percent to 10.7 billion euros. Revenue from the EU Emissions Trading Scheme (EU ETS), which covers emissions from the energy sector and industry, as well as intra-European aviation, rose 12 percent to 7.7 billion euros. The agency renewed its call to return the CO2 price revenues to citizens in light of the new figures. “In order to ensure compensation for private households facing rising CO2 prices, politicians should now swiftly introduce the climate bonus (“Klimageld” in German) agreed in the coalition treaty," said UBA president Dirk Messner.

More than 85 percent of Germany’s emissions are covered by emissions trading, according to UBA. "Carbon pricing via emissions trading is a decisive lever for achieving the legal climate targets,” Messner said. “It is crucial that the carbon pricing revenue is used in full for an active social and economic policy to support the shift to climate neutrality. In this way, emissions trading can combine ambitious climate protection, social compatibility, and economic competitiveness,” he added. Germany’s income from emissions trading is being channelled into the country’s Climate and Transformation Fund, which uses the proceeds to promote the energy-efficient refurbishment of buildings, the expansion of renewable energies, the decarbonisation of industry, electromobility and charging infrastructure, among others.

The government increased the national CO2 price from 30 to 45 euros at the start of the year – a more drastic increase than originally planned – in response to a constitutional court ruling which led to a shortfall of 60 billion euros in the Climate and Transformation Fund, triggering a budget crisis. In reaction to the increase, calls for an implementation of the climate bonus have become much louder in recent weeks. Earlier this week, government economic advisor Veronika Grimm called for a swift introduction, while an alliance of environmental organisations launched a campaign to the same effect in December. But government party policymakers had cast doubt on whether the plans for the bonus payments could be realised, given that the constitutional court ruling had “severely restricted” the government’s financial scope.