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Emissions trading - preparation of applications for permits and allocations

Operators and investors

The European emissions trading system has been recording emissions from plants in the energy and energy-intensive industries and from aviation operators since the beginning of 2005 and mid-2009 respectively. The goal is to achieve a cost-effective reduction of greenhouse gas emissions according to the cap principle (upper limit) & trade. The elementary legal bases for the current 3rd trading period from 2013-2020 include the Greenhouse Gas Emissions Trading Act (TEHG) and the Allocation Ordinance 2020 (ZuV 2020). The fourth trading period will begin in 2021 and last until the end of 2030. The weyer group advises you on emissions trading and the preparation of approval and allocation applications for the various trading periods.

We have summarised the most important changes for you here:

Change from the 3rd to the 4th trading period

3rd trading period 4th trading period
8-year trading period 10-year trading period
Linear reduction factor: 1.74% per annum Linear reduction factor: 2.2% per annum
Allocation is determined at the beginning of the trading period Allocation takes place in two five-year allocation periods (2021 to 2025 and 2026 to 2030), with the allocation being determined at the beginning of each allocation period
Uniform emission values apply for the entire trading period Emission values are updated for each allocation period

Free allocation decreases from 80% of the allocation calculated in 2013 to 30% in 2020. Exception:

  • No reduction takes place for CL-sensitive sectors (100% of the allocation calculated is free of charge)

Free allocation decreases from 30% of the calculated allocation in 2021 to 2026 to 0% in 2030. Exceptions:

  • No reduction takes place for CL-sensitive sectors (100% of the allocation calculated is free of charge)
  • A constant 30% free allocation will take place for district heating until 2030

The allocation changes during the trading period:

  • Following a physical change owing to a “significant change in capacity”, threshold: 10%, increase or decrease
  • Regardless of a physical change, reduction owing to a “partial shutdown”, threshold: 50%

The allocation changes within the allocation period:

  • Regardless of a physical change solely due to “production changes”, threshold: 15% reduction or increase

(The EU still has to determine the details of the adjustment in allocation.)

The quantity of emission allowances allocated free of charge to industrial plant (non-electricity producers) is limited to the share of historical emissions of industrial plants (industry cap). A uniform cross-sector correction factor is being applied to ensure compliance with the industrial caps. The amount of emission allowances auctioned is set at 57% of the total, but 3% of the total can be used as a buffer for free allocation to avoid applying a cross-sectoral correction factor.
The carbon leakage status is determined by criteria for carbon costs and/or trading intensity. Changes in the status are possible during the trading period. The carbon leakage status is determined by the trading intensity multiplied by the emission intensity divided by the gross value added. No changes to the status take place within the trading period.

We have been providing support to and advising plant operators on their operating and reporting obligations vis-à-vis the authorities and the optimisation of plant operations from an economic viewpoint since the emissions trading obligation began.


Our Team

Employee photo of Patrick Bahlert of PROBIOTEC GmbH

Patrick Bahlert

Employee photo of Frank Schoenborn of weyer IngenieurPartner GmbH

Frank Schönborn

weyer IngenieurPartner