ETS 2 for German Stadtwerke: What Changes After the BEHG

German utilities face a switch from a capped national carbon price to open European carbon market prices. From 2028, the EU Emissions Trading System 2 (ETS 2) will take over from the German Fuel Emissions Trading Act (BEHG). For Stadtwerke and gas suppliers, this is less about new climate goals and more about new rules, new systems and a new way of pricing carbon.

This is an outlook on how and in which sectors renewable gas fits for German gas suppliers.

From the BEHG to ETS 2: what’s already known

Since 2021, Germany has priced CO₂ from heating and transport fuels through its national emissions trading system (nEHS), based on the BEHG. The obligation sits with the companies that place fuels on the market, including gas suppliers and Stadtwerke.

ETS 2 applies the same principle at EU level. It extends carbon pricing to buildings, road transport and smaller industrial users, next to the existing EU ETS for large industry and power. For German suppliers, the idea is familiar. What changes is the framework around it.

Germany plans to bring some fuels outside the EU default scope into ETS 2, such as fuels used in rail. Whether agriculture will be included is still politically contested, and the national opt-in requires approval from the European Commission.

The new framework

Germany’s national framework will be largely replaced by the European one and changes the following:

Legal. The BEHG is replaced by EU rules for most fuels. Carbon costs will no longer follow the national German price corridor, but European carbon market prices.

Operational. Allowances will be held and surrendered in the EU’s Union Registry, which already serves ETS 1, in separate ETS 2 accounts administered in Germany by the DEHSt. Monitoring and reporting under ETS 2 have already run through the DEHSt since 2025. The timeline has already shifted once. ETS 2 was due to start in 2027, but the EU postponed it by a year. Germany therefore keeps the BEHG running one year longer.

Sources: Clean Energy Wire, DEHSt, Deutscher Bundestag, Council of the EU Press release

Many details are still open: the Commission’s approval of Germany’s opt-in for additional sectors, and how Nabisy will connect to the EU’s Union Database.

Where biomethane fits in ETS 2

Biomethane matters in ETS 2 for one reason: sustainable biomethane counts as zero emissions. When it meets the sustainability and greenhouse gas (GHG) saving criteria of the Renewable Energy Directive (RED), no allowances need to be surrendered for it.

The principle is not new in Germany. Under the BEHG, biomethane can already be counted as emission-free, provided a Proof of Sustainability (PoS) is registered in Nabisy, the system run by the BLE.

What changes is the system behind that proof. At EU level, sustainability data will flow through the Union Database (UDB). Nabisy already does this at national level, so both registers must interact. How they will do so is still not defined.

The UDB was originally expected to cover biomethane around 2024. The most optimistic timing is now early 2027, but a later start is more likely, as no new information has been published. Once the UDB is live, it’s mandatory to use it.

Consequences for you and your customers

Much of the operational change sits with suppliers like BioGem Express, not with your end customers. We will adapt to the UDB and keep clients informed as the rules become clear. For German utilities, the practical step is simple: once the UDB is live, you will need an account there to receive Proof of Sustainability (PoS).

The legal side deserves more attention. Contracts that refer to the BEHG, or that run past 2027, may need to be reviewed against the new framework.

Five major topics for the agenda

Not everything about ETS 2 is settled. But German utilities don’t need every answer to start preparing.

1. Map your own carbon cost exposure for 2027 and 2028. 2027 stays within the BEHG corridor (Bundesrat approval still pending). From 2028, the price follows the European carbon market. Budget for both.
2. Review your contracts. Review procurement and sales contracts for references to the BEHG and for how carbon cost sensitivities are passed on after 2027.
3. Review your existing documentation flow. Know where your Proofs of Sustainability sit today (Nabisy) and plan for a transition into an account in the Union Database.
4. Understand biomethane as part of your carbon strategy. Every tonne covered by sustainable biomethane is a tonne you don’t need allowances for.
5. Choose an experienced counterparty that follows the rules perfectly. Certificates only have value if they are accepted by the register and your auditor.

BioGem’s position

The effect of ETS 2 does not change why renewable gas matters in Germany. It changes the legal framework and procedures to prove it. At this point, documentation quality becomes a real qualification factor. BioGem follows this transformation from the BEHG to ETS 2 perfectly, and ensures every volume delivered by BioGem fulfils the rules that apply at the time.

Talk to BioGem Express about your renewable gas strategy for ETS 2. Contact us at sales@biogemexpress.com.