CO2 now has a price

Since New Year’s Day 2021, national emissions trading has started in the heating and transportation sectors. This means that a CO2 price will be levied on fossil fuels for the first time.

Experts understandably argue that the price path currently provided in the German Fuel Emissions Trading Act (BEHG) is too low to make a contribution to climate protection. Moreover, the German government is further weakening the effectiveness of the instrument by exempting entire industries.

Nevertheless, the impact was immediately visible in daily life, on the price boards at gas stations. No motorist overlooks a price jump overnight of minimum 6 cents for gasoline and 7 cents for diesel. The increase of the commuter allowance provides some compensation, but the psychological effect from the direct impression by fuel prices will be there. The tax will be also visible in the settlement of vehicle taxes, heating oil and natural gas. Not in daily life, but nevertheless with the periodical bills.

The moderate level of 25 euros per ton of emitted CO2 in 2021 will increase annually. It will have already more than doubled to 55 euros in 2025 [1], and will have a direct impact on CO2-intensive consumer goods such as fossil fuels. Whereby this only shows the direction when conservatively calculated damage costs of at least 180 euros per ton of CO2 are taken into account[2].

In mobility, in conjunction with the promotion of alternative drive systems, this will lead to increased consumer assessment of, for example, electric vehicles and their usage profile. Likewise in construction, when a central heating system is about to be replaced or when planning the heating system for a new building.

The changing of learned and working habits is ultimately an effort. An effort is usually only made if there is a sufficiently motivating profit in prospect as a result. A visibly started price increase and over the coming years predictably worsening cost balance for combustion technologies is a good motivator, after alternative technologies are simultaneously promoted in the same period. This is not a scrapping premium whereby functioning vehicles or heating systems are replaced prematurely. However, if a new acquisition is planned in the period anyway, the alternatives will at least be examined. Thus, it goes in the correct direction. Not in a prompt turnaround, but (hopefully) on a sustainable path.


[1]: CO2 tax rates:

[2]: CO2 damage calculation by the German Federal Environment Agency:



Further sources

Preisentwicklung CO2-Steuer, Auswirkungen auf KFZ-Steuer und Benzinpreise:

Kritik an aktueller Ausgestaltung und Verbesserungsvorschläge:

CO2-Preis Umweltbundesamt: