Selling carbon credits in Germany - A guide

February 22, 2024
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Climate change is one of the greatest challenges of our time, and the pressure on companies and private individuals to reduce their carbon footprint is constantly growing. In this context, trading in carbon credits is becoming increasingly important. These credits, also known as CO2 certificates, are purchased by actors who wish to offset their greenhouse gas emissions. In Germany, a market for the sale of carbon credits has established itself, which has gained momentum in particular due to the participation of electric vehicle owners. In this article, you will learn what carbon credits are, how trading works in Germany and how you can benefit from them as a vehicle owner or entrepreneur.

What are emission credits?

Emission credits are certificates that certify the right to emit a certain amount of greenhouse gases, usually measured in tons of CO2 equivalent. These certificates can be traded on the market and offer companies that want to reduce their emissions a way to monetize their climate protection efforts.

How does carbon credit trading work in Germany?

Emissions trading in Germany is part of the European Emissions Trading System (EU ETS), which was introduced as an instrument for reducing greenhouse gas emissions. In the EU ETS, emission allowances are issued annually to participating companies, which can either use them or sell them on the market if they reduce their emissions below the allocated limit.

Since the beginning of 2022, Germany has also had a special regulation that allows owners of electric cars to sell emission credits. This is due to the greenhouse gas reduction quota (GHG quota), which obliges oil companies to reduce their CO2 emissions annually. Electric car owners can sell these credits to companies in the petroleum industry, which can then improve their carbon footprint.

Who can sell emission credits?

In Germany, anyone who is registered as the owner of an all-electric vehicle in the vehicle registration document may sell emission credits. This includes private vehicle owners as well as companies with an electric vehicle fleet. Plug-in hybrids are excluded from trading, as they also use fossil fuels.

How does the sales process work?

The sales process for emission credits is relatively simple. Vehicle owners must register with one of the many dealers who act as intermediaries. They collect the credits and sell them in bundles to the petroleum industry. A copy of the vehicle registration certificate, which must be submitted when registering, serves as proof. The dealer checks the documents and carries out the sale. The proceeds are then paid out to the vehicle owners.

How much money can e-car owners earn?

The amount of income depends on several factors, including the market price for the credits and the dealer's commission. According to the ADAC, vehicle owners could earn around 250 to 350 euros per vehicle in 2022. However, the exact amount may vary.

How do companies with an electric vehicle fleet benefit?

Companies that have electric vehicles in their fleet can also benefit from the sale of emission credits. They are subject to the same conditions as private vehicle owners. In addition, commercial vehicles, such as electric vans, can generate even higher revenues due to their size and their potential to reduce emissions.

What does this mean for the future?

The sale of emission credits offers an additional financial incentive structure to accelerate the switch to electromobility. For Germany, this could mean that more people and companies opt for electric vehicles, which in turn would lead to a reduction in greenhouse gas emissions in the transport sector.