Increasing the share of renewable energy in the transport sector : effects of modified multiple crediting factors in the German environmental economic instrument GHG Quota (“THG-Minderungsquote”)

Abstract

The German environmental economic instrument greenhouse gas quota (“Treibhausgas-Minderungsquote” – GHG quota) requires fossil fuel distributors to conclude GHG quota trading contracts for an increasing share of their fossil fuel sales volume. These GHG quota trading contracts are generated through renewable energy fulfillment options. Currently, modifications to the GHG quota`s variable multiple crediting factor are being discussed in the political-legal discourse at national and EU levels, which also affects the revenues generated by the GHG quota. This paper analyzes these modifications in certain multiple crediting factor scenarios for the years 2023 and 2030. Depending on the scenario, the GHG quota can be generate revenues of up to 0.55 €/kWh for renewable electricity, up to 0.54 €/kWh (17.91 €/kg) for green hydrogen and up to 0.47 €/kWh (2.77 €/l) for advanced biofuels. Thus, the GHG quota has a decisive influence on market ramp-up of renewable energy in the transport sector. The analysis of the multiple crediting factor scenarios concludes that from an environmental economic point of view the politically discussed scenarios should not be implemented and therefore the current baseline scenario should be kept.