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Bundestag Committee Recommends Amendments to Greenhouse Gas Emissions Trading Law
Berlin, January 29, 2025 – The Committee on Environment, Nature Conservation, Nuclear Safety, and Consumer Protection of the German Bundestag has approved a recommendation for changes to the Greenhouse Gas Emissions Trading Act (TEHG). The proposed amendments align with the revisions to Directive 2003/87/EC on the establishment of a scheme for greenhouse gas emission allowance trading within the Community.
The draft law, which was submitted by the Federal Government (Bundesregierung), aims to bring the TEHG into conformity with the European Union (EU) legal framework. The EU Directive was amended in 2022 to strengthen the emissions trading scheme (ETS), particularly in the aviation sector.
Key Changes
The recommended amendments include:
- Expanding the scope of the ETS: The ETS will be extended to cover all domestic flights and certain international flights departing from or arriving in Germany.
- Introducing a carbon tax on aviation fuels: A tax will be imposed on jet fuel used by flights within the ETS scope, with revenue used to support climate protection measures.
- Strengthening emissions reporting and verification: Airlines will be required to submit more detailed and accurate emissions reports, and the verification process will be enhanced.
- Introducing a market stability reserve: A reserve will be established to absorb excess allowances and regulate the supply, helping to stabilize carbon prices.
- Adjusting auctioning rules: The rules for auctioning emissions allowances will be revised to ensure fair competition and promote investment in clean technologies.
Rationale and Impact
The amendments are intended to align the TEHG with current EU law and contribute to the EU’s climate protection goals. By expanding the ETS and introducing a carbon tax on aviation, the law aims to reduce emissions in the aviation sector, a significant source of greenhouse gases.
The market stability reserve is expected to help manage market volatility and prevent price fluctuations, creating a more predictable investment environment for businesses. The adjusted auctioning rules aim to encourage the development of innovative low-carbon technologies.
Next Steps
The Committee’s recommendation will be debated and voted on by the Bundestag as a whole. If approved, the proposed amendments will be incorporated into the TEHG and implemented. The law is expected to take effect in 2025.
The TEHG-Europarechtsanpassungsgesetz 2024 (TEHG-EU Law Adaptation Act 2024) is part of Germany’s efforts to meet its national and EU climate targets. The government has set a goal of achieving climate neutrality by 2045.
20/14775: Beschlussempfehlung und Bericht zu dem Gesetzentwurf der Bundesregierung – 20/13585, 20/13962 – Entwurf eines Gesetzes zur Anpassung des Treibhausgas- Emissionshandelsgesetzes an die Änderung der Richtlinie 2003/87/EG (TEHG-Europarechtsanpassungsgesetz 2024) (PDF)
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