German Parliament Proposes Amendment to Greenhouse Gas Emission Trading Act
Berlin, November 4, 2024 – The German Bundestag (Lower House of Parliament) has introduced a draft bill titled “20/13585: Bill on the Adaptation of the Greenhouse Gas Emission Trading Act to the Amendment of Directive 2003/87/EC (Greenhouse Gas Emission Trading Act – European Law Adaptation Act 2024) (PDF)” for its first reading.
Background
The European Union (EU) has established a comprehensive emission trading system (ETS) to reduce greenhouse gas emissions. The ETS operates on a cap-and-trade principle, whereby a certain amount of emission allowances are distributed to participants in covered sectors (e.g., power plants, industrial facilities). Participants must surrender an equivalent number of allowances to cover their emissions, incentivizing them to reduce their carbon footprint.
Directive 2003/87/EC, which serves as the legal basis for the EU ETS, has been recently amended. These amendments aim to strengthen the ETS and align it with the EU’s increased climate ambition.
Key Provisions of the Bill
The proposed bill seeks to transpose the amendments to Directive 2003/87/EC into German law. Key provisions include:
- Tightening of the Cap: The total number of emission allowances available in the ETS will be gradually reduced at a faster pace.
- Expansion of Scope: The ETS will be extended to cover new sectors, including maritime transport and road transport.
- Strengthened Carbon Pricing: The introduction of a carbon border adjustment mechanism (CBAM) will impose a carbon price on imports from countries with less stringent climate policies.
- Improved Market Stability: The creation of a Market Stability Reserve (MSR) will help manage excess allowances and stabilize carbon prices.
Impact
The proposed amendments are expected to have a significant impact on the German economy and its efforts to reduce greenhouse gas emissions.
- Increased Costs for Industries: Industries covered by the ETS will face higher compliance costs, driving innovation and investment in low-carbon technologies.
- Reduced Emissions: The tighter cap and expanded scope of the ETS are expected to result in significant emission reductions across various sectors.
- Innovation and Job Creation: The transition to a low-carbon economy is anticipated to create new jobs and stimulate innovation in sustainable industries.
Timeline
The draft bill is currently undergoing parliamentary debate. It is expected to be adopted by the Bundestag and the Bundesrat (Upper House of Parliament) in the coming months. Once enacted, the Greenhouse Gas Emission Trading Act – European Law Adaptation Act 2024 will enter into force, bringing Germany in line with the revised EU ETS framework.
Conclusion
The proposed amendments to the German Greenhouse Gas Emission Trading Act represent a critical step towards aligning Germany with the EU’s ambitious climate goals. By strengthening carbon pricing, expanding the scope of the ETS, and promoting innovation, the bill aims to accelerate the transition to a low-carbon economy and contribute to a cleaner and more sustainable future.
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Drucksachen a new article on 2024-11-04 11:00 titled “20/13585: Gesetzentwurf Entwurf eines Gesetzes zur Anpassung des Treibhausgas-Emissionshandelsgesetzes an die Änderung der Richtlinie 20023/87/EG (TEHG-Europarechtsanpassungsgestz 2024) (PDF)”. Please write a detailed article on this news item, including any relevant information. Answers should be in English.
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