Berlin For months, the price for CO2 certificates in the European Emissions Trading System (ETS) has only known one direction: it is rising. This week it even scratched the EUR 100 mark, reaching a new high of EUR 97.51 on Tuesday, but has since fallen back to EUR 90. Overall, the price has almost quintupled within about a year.
Last year, the previous government forecast revenue from the sale of emission certificates of 3.5 billion euros for 2022. A value that, from today’s perspective, should be significantly exceeded.
The federal government is reluctant to make estimates about the income from the sale of certificates today. A spokesman for the Federal Environment Ministry said on request that “Germany, as the provider of the certificates, is a market participant and must therefore maintain a corresponding level of neutrality”. Rather, the revenue estimates were based on price forecasts by leading market analysts and market prices for multi-year futures contracts.
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The estimates are currently being updated accordingly, they would “probably be significantly higher” than the estimated income of 3.5 billion euros, the spokesman said. What the federal government will calculate with in the end will only become clear when the supplementary budget for 2022 is drawn up, which is to be decided by the cabinet at the beginning of March.
As early as 2021, the federal government received 5.3 billion euros from the sale of certificates. Over the course of the past year, the price of the certificates rose from around EUR 30 to around EUR 80 at the end of the year.
The price development puts many companies under pressure in a difficult phase. “The steel industry in Germany is on the threshold of its transformation into a climate-neutral future, and companies have concrete plans for how millions of tons of CO2 can be saved in the coming years by investing in new technologies. But on the way there, the hurdles keep getting higher,” said Hans Jürgen Kerkhoff, President of the Steel Industry Association.
Danger for international competitiveness
Kerkhoff added that the high CO2 prices weighed on the international competitiveness of the steel industry compared to third countries. It is all the more important to receive the free allocation of certificates until 2030.
Companies that are subject to emissions trading and are in international competition are allocated part of the emission certificates free of charge, but they have to buy the far greater part. At the current price level, the steel industry in Germany incurs annual costs of around 1.2 billion euros, according to industry information.
According to the companies, if the EU Commission’s plans to further reduce free allocation come true, the costs will amount to more than three billion euros in 2030 – even if a third of primary steel production can be converted to hydrogen-based CO2-free processes. Over the period 2026 to 2030, the CO2 certificate costs add up to a total of 16 billion euros.
The EKF is already lavishly filled without the income from the sale of certificates, because it also feeds on other income. Lindner took over the EKF with a credit of around 25 billion euros.
With a supplementary budget, the traffic light coalition transferred another 60 billion euros in unused corona emergency loans to the EKF as a reserve. The fund thus has around 85 billion euros at its disposal.
Additional income will be added over the course of the year. The planning of the previous federal government from last summer envisages that this year 8.6 billion euros in income above the national CO2 price from the building and transport sector will flow into the EKF, i.e. above all through price surcharges for oil and petrol.
Since the national CO2 price for 2022 in the Fuel Emissions Trading Act (BEHG) is set at 30 euros per tonne, higher revenues are not to be expected here. Last year the CO2 price was 25 euros. The revenue amounted to 7.2 billion euros.
However, expenditure from the EKF has also been decided. The extension of the KfW program for energy-efficient houses will cost around 5.4 billion euros. This is to be financed from the EKF.
In addition, the compensation for the EEG surcharge will be financed from the EKF, which should cost around ten billion euros. Should the traffic light coalition decide to completely abolish the EEG surcharge in the current year, this would also be financed from the EKF. The costs for this are open and depend on the development of the electricity price and the design of the abolition.
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