Germany Moves to Stabilize Carbon Prices Through 2027

Germany’s Cabinet has approved draft amendments to the Fuel Emissions Trading Act that would retain the carbon price corridor at €55–€65 per tonne in 2027, matching the 2026 range. The change responds to the postponement of the EU ETS 2 for buildings and road transport until 2028 and would prevent Germany’s national price from becoming linked to the volatile EU ETS 1 price next year. The bill still requires parliamentary approval. BDEW welcomed changes reducing the maximum auction bid share from 50% to 20% and tightening allowance banking rules, including preventing 2026 allowances from meeting 2027 obligations. However, the association called for further revisions to top-up pricing and auction design, warning that the proposal may not deliver its price-stability objective.
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