Germany has set a legally binding target of achieving climate neutrality by 2045, as laid out in the Federal Climate Protection Act. Gaseous energy sources will play a key role in meeting this target, but to do so, they must be progressively defossilised.
Introducing a binding, cross-sector green gas quota—designed as a greenhouse gas (GHG) reduction mechanism—aims to support this transition by replacing fossil-based gases with low-carbon alternatives such as hydrogen and biomethane.
Frontier Economics was commissioned by ‘Die Gas- und Wasserstoffwirtschaft’ to develop a concept for such a green gas quota. The aim: to steadily grow the share of climate-friendly gases in the market, including hydrogen and its derivatives, and biomethane, and to achieve a lasting reduction in CO₂ emissions by 2045.
Our proposed quota is grounded in four key principles:
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Making a meaningful contribution to climate neutrality
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Ensuring fair competition between green gases
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Securing affordable energy supply
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Aligning with EU sustainability objectives
The concept includes several core elements:
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A credible trajectory for green gas expansion: Starting in 2027, the quota pathway sets an ambitious—but achievable—ramp-up based on existing potential assessments, building up to 2045.
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Streamlined implementation: We recommend a process that minimises administrative overhead by leveraging existing institutions and monitoring mechanisms.
The proposal was developed in close partnership with industry stakeholders across the gas value chain—including producers, storage operators, network providers and end users. We thank all participating stakeholders for their cooperation!
Click here to read the full report: Concept of Green Gas Quota
Author
Director
Associate Director
Consultant
11 April 2025
