The Federal Cabinet approved the Second Act to Further Develop the Greenhouse Gas Reduction Quota (GHG Quota). Federal Environment Minister Carsten Schneider: “The future of mobility is electric. But we also want to make progress for the large existing fleet of vehicles. This amendment to the law will make refueling more climate-friendly step by step. It will also create innovation and new value chains: For the first time, there is an obligation for petroleum companies to use green hydrogen produced from wind and solar power. This creates a secure demand that will drive the expansion of the new hydrogen infrastructure. Conventional biofuels from animal feed and food will remain capped to avoid negative consequences for global food security or rainforests. In return, the use of advanced biofuels from residual materials will become more attractive. Even those who drive electric cars can benefit from the further developed quota and have their contribution to greenhouse gas reduction paid by the companies.”
The draft law implements the requirements of the European Renewable Energy Directive III, whose targets must be met by 2030. To provide businesses with greater investment security, the German government is extending the development plan to 2040, going beyond the EU directive to create planning certainty for companies’ investments. Greenhouse gas emissions from fuels will continue to decline steadily until 2040. To achieve this, the GHG quota will gradually increase from 10.6 percent in 2025 to 59 percent in 2040.
According to the draft legislation, petroleum companies have the following options for achieving the climate targets:
Green hydrogen: For the first time, a quota is being introduced for so-called “renewable fuels of non-biogenic origin”—for example, green hydrogen produced using wind and solar power. This can be used, for instance, in refineries to reduce greenhouse gas emissions. Further products such as synthetic fuels can also be used to contribute to fulfilling the commitment.
Advanced biofuels: Advanced biofuels are produced from residual materials such as straw, manure, or biomass from algae. The quota for these advanced biofuels will be doubled from one percent to two percent in 2026 and will then increase annually to nine percent by 2040. The double counting introduced in 2021 will be eliminated as early as 2026, since market availability has improved significantly since then. A specific residue will no longer be counted towards the greenhouse gas (GHG) quota from 2027 onwards: that from palm oil production. This is because palm oil production is associated with significant environmental damage in many parts of the world. The new law ensures that biofuels do not indirectly contribute to this.
Biofuels from animal feed and food crops: These conventional biofuels can continue to be used, but their use will remain capped at the current level of 4.4 percent. This prevents further intensification of competition between food and fuel with regard to global food security or the pressure on resources such as rainforests.
Electricity for electric cars: Electricity used to charge electric cars can also be credited towards the greenhouse gas (GHG) quota if it is demonstrably used in transportation. Electricity from renewable energy sources for charging electric vehicles is given particularly high weight. Operators of public charging points, owners of electric bus or commercial vehicle fleets, or owners of electric cars can also receive certificates because their clean electricity reduces CO2 emissions in transportation. These certificates can be sold – for example, to oil companies, which can then use them to fulfill part of their GHG quota.
Monitoring: From 2027 onwards, renewable fuels of all kinds, such as biofuels or green hydrogen, will only be eligible for credit if on-site inspections by government inspectors are possible. This is intended to prevent potential fraud.
Image of BMUKN :Generaldirektor von UNIDO Gerd Müller (l) und Carsten Schneider, Bundesminister für Umwelt, Klimaschutz, Naturschutz und nukleare Sicherheit.
Press release, translated by Google https://h7.cl/1gRP6
