With the adoption of the European Council’s ‘General Approach’ (position) on a 2040 climate target and the resulting aim to postpone the ETS2 by one year, the German national ETS was risking to face ETS1 prices during 2027, as currently foreseen by national legislation (see analysis here).
Reportedly, the federal government has now agreed that the German CO₂ price will not rise further in 2027, but will remain at the same level as in 2026. This was agreed by party-experts from Conservatives (CDU/CSU) and Social Democrats (SPD) on 11 November 2025. Environment Minister Carsten Schneider (SPD) is tasked to implement the decision, which will require an amendment to Germany’s Fuel Emissions Trading Act.
According to the media reports, the German CO₂ price is now to remain constant in 2027 from 2026 levels, so floating between 55 and 65 EUR/tonne.
The proposed change to the German national carbon price shows political pragmatism by the German government as an answer to the ETS2 delay agreed by EU member states’ ministers last week. That said, the ETS2 postponement will need to be formalised on EU level before the German law change can be proposed. So basically, this is Berlin’s political answer to a European political compromise. Legal details will follow later.
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