(de-news.net) – According to the German Emissions Trading Authority (DEHSt) in Berlin, Germany generated a record 21.4 billion euros in revenue from the sale of carbon emissions allowances in 2025, marking the highest annual proceeds since the program’s inception and representing a significant increase from 18.5 billion euros in 2024. These funds are fully allocated to the Climate and Transformation Fund, a dedicated instrument designed to finance a wide range of climate and energy transition measures. The fund supports initiatives such as comprehensive building retrofits to improve energy efficiency, the decarbonization of industrial processes, the expansion of hydrogen infrastructure, and the development of electric vehicle charging networks, all of which are considered central to Germany’s broader climate protection strategy.
DEHSt, which operates under the Federal Environment Agency (UBA), emphasized that emissions trading has emerged as a pivotal cross-sectoral instrument for climate policy, providing both regulatory and economic incentives to reduce greenhouse gas emissions. By assigning a monetary value to carbon outputs, the system encourages businesses and consumers to shift away from fossil fuel use and adopt lower-emission alternatives. Within the European framework, allowances are required for large-scale industrial facilities, power generation plants, and intra-European aviation and shipping operations. The number of available allowances is progressively reduced each year, thereby incrementally tightening the emissions cap. The average price of these European certificates rose from 65 euros per ton in 2024 to 73.86 euros in 2025, reflecting both market dynamics and the tightening supply of permits.
At the national level, the emissions trading system covers fuels used in heating and transportation, including gasoline, diesel, heating oil, coal, and the combustion of certain waste streams. Unlike the European market, national certificates have historically been issued at fixed prices and have not been subject to quantitative reductions, though starting in 2026, the system will introduce auctions with a price range of 55–65 euros per ton. The rise in the per-ton cost of national allowances drove revenues from this system to 16 billion euros, while European auction proceeds accounted for 5.4 billion euros.
DEHSt observed that the substantial volume of national allowances sold reflects persistently high emissions in the building and transportation sectors, highlighting structural challenges in achieving reductions in these areas. Officials further noted that the postponement of integrating national fuel emissions into the broader European system slows the pace of modernization in key sectors and complicates efforts to meet Germany’s national climate targets as well as European Union climate objectives. This interplay between pricing mechanisms, market design, and sectoral emissions underscores the ongoing complexity of implementing an effective carbon pricing framework while balancing economic and environmental goals.
