German green gas quota to reward volume, not carbon savings

A leak of a key issues paper on the German green gas quota (“Grüngasquote”) outlines an obligation on suppliers placing gas, heating oil, and liquefied petroleum gas on the market, as part of the Building Modernisation Act. The paper sets out the gases eligible for fulfilling targets, including biomethane, green hydrogen, and low-carbon gases, the scope of the obligation for household consumption, quota trading, and compliance payments for shortfalls.

The analysis explains how the green gas quota is designed to work with the “Biotreppe” (bio-staircase), what the obligation could mean for domestic biomethane production and imports, and how the compliance payment may shape biomethane prices, with the transport greenhouse gas quota and the French CPB market as points of comparison.