THG Certificate Prices Surge, Impacting German Fuel Costs
Berlin – After weeks of relative quiet, activity has returned to the German THG (Treibhausgas) quota market in week 35, driving certificate prices higher. “Other” category certificates, for both the 2025 and 2026 performance years, have reached new highs.
2025 “Other” certificates hit their highest level since October 2023, surpassing even prices seen in June when initial reactions to the draft legislation implementing Red III caused market uncertainty. Double-counted, progressive certificates climbed to €307.50/t CO2e, the highest listing for this category in nearly a year.
Certificates for the 2026 performance year also saw notable gains,increasing by over €10/t CO2e to €290/t CO2e – a record as April 2023. Easily eligible, advanced certificates also reached a record weekly average of €10.38/t CO2e.
Several factors are contributing to the price increases.High HVO (Hydrotreated Vegetable Oil) prices in the ARA (Amsterdam-rotterdam-Antwerp) region, driven by international demand, continue to exert pressure on the German market, as HVO generates THG certificates. While HVO prices have dipped slightly, they remain elevated.
The end of summer holidays is also playing a role, with obligated companies returning to focus on quota fulfillment. Market participants are actively testing price levels, indicating increased demand.
Recent legislative proposals concerning the organic industry are adding to the upward pressure.Concerns surrounding the potential end of protections for buyers of previously illegal certificates are prompting companies to secure legitimate certificates now,before those protections lapse,as the draft law offers no retrospective coverage. This is concurrently increasing the willingness to pay higher prices for legally compliant certificates.
The impending implementation of Red III is also anticipated to have a long-term impact. Companies have had time to assess the potential effects and adjust their strategies. With the German parliament resuming session on September 8th, market participants expect initial proposals for adapting the legislation, which could further stimulate market activity.
These rising THG certificate costs are directly impacting fuel prices. Currently, diesel producers need to purchase certificates or biofuels equivalent to approximately €8/100l to meet the legal requirement of a 10.6% greenhouse gas emission reduction. This represents the highest compliance cost since spring 2023 and is contributing to increased prices at the pump for B7 diesel and petrol (E5 and E10).
By Svea Winter
