In 2015, CO2 reductions using renewable energy electricity supported by the German Renewable Sources Act (EEG) amounted to about 103 million tonnes. In the same period, net EEG payments amounted to about EUR 22.6 billion. Average cost per tonne of CO2 reduced using the EEG therefore amounted to about EUR 219/tonne. During the same period, the price for EU Emission Allowances (EUA) at the EEX secondary market was somewhere between above EUR 6 and below EUR 9 per tonne CO2.
The cost of reducing CO2 emissions – or not reducing CO2 emissions – may not always be easy to calculate. In the German public debate, costs of specific CO2 reduction measures appear to play a rather limited role.
Maybe the following calculation can shed some light on where we currently stand:
Based on figures from the German transmission system operators (TSOs), expenses in the scheme that reallocates feed-in tariff and other support payments under the EEG amounted to EUR 24,112,781,100.22 in 2015. During the same period, the TSOs received EUR 1,526,651,020.79 from the sale of power from renewable sources, leading to about EUR 22.6 billion in net expenses.
Based on recent figures from the Renewable Energy Statistics Working Group (AGEE-Stat), Germany avoided 168 million tonnes of greenhouse gases in 2015. The electricity sector accounted for about 122 million tonnes CO2-equivalents. From those reductions about 103 million tonnes are due to electricity covered by EEG support payments.
If we divide net EEG account expenses of EUR 22.6 billion by 103 million tonnes of CO2 reductions, we arrive at a cost of about EUR 219 per tonne of CO2.
Just for comparison purposes, the price for EU Emission Allowances (EUA) at the EEX secondary market was somewhere above EUR 6 and below EUR 9 in 2015 (based on data from the European Energy Exchange (EEX).
Each EUA gives the holder the right to emit one tonne of CO2. If you took one EUA out of the market, the cost of that EUA would be the cost of reducing one tonne of CO2 using the European Emissions Trading Scheme.
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- Third Amendment of Equalisation Scheme Execution Ordinance Entered Into Force on 1 February 2015
- German Greenhouse Gas Emissions Down 4.3% in 2014 – Energy Related Emissions Down 5.2%
- Government Approves Amendment of Equalisation Scheme and Execution Ordinances
- Consultation on Proposal for Ordinance Amending Ordinances Regulating EEG Surcharge