Evolution of GHG quota price in the German transportation sector
Forecast of GHG quota price in the German transportation sector for 2030 and beyond
Context & Objectives

An investment fund asked Emerton to provide robust ranges for the expected development of the GHG quota price in Germany, considering a range of scenarios, such as the regulatory evolution in light of the upcoming RED III legislation until 2030 and beyond.

Outcome

Provision of robust range estimates for the German GHG quota price which supported theclient in the process of making an investment decision.

Our approach

Step 1: Evolution of regulatory framework  at EU and national level

- Assessment of climate and GHG  emission targets at EU and at national level in Germany

- Deep dive into Germany’s GHG  reduction scheme in the transportation sector

- Identification of GHG reduction  targets per year, minimum sub-quotas, floor limits, multipliers, and GHG  values for each crediting option until 2030

 

Step 2: Development of GHG quota price  and main influencing factors

-  Several expert interviews to gather  market insights covering the entire biofuel/e-mobility value chains

-  Detailed analysis on historic GHG  quota price development and influencing factors (e.g., brown grease from China)

-  Translation of insights into a  modeling approach

 

Step 3: Merit order modeling and  sensitivity analysis of the results

-  Merit order modeling of eligible  GHG quota crediting options based on production cost per unit of GHG savings

-  Sensitivity analysis incorporating  35+ scenarios based on the evolution of regulation, production costs, and  other factors

-  Synthesis of findings for the 2030  time horizon and beyond

 

Our experts
Sébastien Zimmer
Managing Partner
Haithem Choukatli
Principal
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