Energy law until 2030: The EU decisions
- Shortage of CO₂ certificates
- Expansion of CO₂ certificate trading to other sectors
- CO₂ border adjustment ensures equal emissions prices for imports
With the decision of the European Parliament on April 18, 2023, the program "Fit for 55" continued to pick up speed and took groundbreaking steps for the Energy law until 2030 of the member states. This was adopted:
- Expansion of the EU ETS on companies & facilities with high CO₂ emissions in the aviation and shipping, road transport, building heating and agriculture sectors.
- Gradual reduction of EU ETS CO₂ certificates by 62 %. 1st step by the end of 2026: Reduction of CO₂ certificates by 120 million 2nd step from 2027: Reduction of CO₂ certificates by 4.4 % per year. (previously: 2.2 %)
- Halving of the free of charge Certificate issue to 2030 and Abolition the free allocation until 2034.
- Imports from non-EU countries will be subject to the CO₂ border adjustment. Importers must make up the difference between the higher certificate prices in the EU and those in the country of manufacture.
How will energy law change by 2030?
The EU climate protection package of April 2023 has far-reaching consequences for almost all German companies and impacts on energy law: in general more expensive itself Energy from fossil fuels and energy from renewables becomes cheaper.
- Large companies in the aviation, shipping, road transport, building heating and agriculture sectors must participate in the ETS.
- The shortage of CO₂ certificates at EU level is leading to a price increase in European emissions trading.
- The price cap on national CO₂ certificates will be lifted in 2027 and the EU ETS II introduced.
- The EU countries must pass their own new laws to further reduce CO₂ emissions from companies and the private sector.
- Loopholes for circumventing CO₂ levies are plugged by pricing in all goods offered in the EU. (CBAM)
EU climate and environmental protection laws on energy efficiency require amendments to national energy legislation by 2030
As part of the EU's plans for climate neutrality, Germany is facing further cuts in energy law and legislative changes by 2030. The tasks of the German Emissions Trading Authority (DEHSt) of the Federal Environment Agency are also likely to expand and the entire electricity tax system in Germany will have to be fundamentally renewed and adapted. Furthermore, the more detailed elaboration of the CO₂ border adjustment system is still pending.
What changes must companies expect now?
- By 2027, at least 85 % of all CO₂ emissions in Germany will require certificates (in comparison: in 2023, the figure is approx. 40 %).
- From 2026, national CO₂ certificates will enter the auction phase with a maximum price of 65 euros
- The EU ETS II will start in 2027 and the German nEHS will no longer apply. Experts estimate certificate prices of between 200 and 330 euros at the start.
- The prices for fossil fuels and the associated CO₂ emissions are rising.
- There are no taxes or grid fees for energy from decentralized renewable sources on site
- Private and commercial use of fossil energy sources will be treated equally for tax purposes.
- Tax exemptions and preferential treatment for certain sectors and companies will be completely abolished.
- The obligation of companies to provide information to DEHSt and the EU ETS will be extended in the form of ESG, CSRD or LSME reports.
- Imports into the EU of CO₂-intensive products, product groups or raw materials are becoming more expensive. The member states are currently drafting the relevant laws.
- No relief on the certificate market through the planned annual shortage.