The German government is notifying the European Commission of its intent to close further power plants with a view to cancelling emission allowances in future. This was decided by the Federal Cabinet on 19 November 2025. This notification of intent comprises information on a total of 14 coal-fired power plants that were shut down as part of the coal phase-out in 2024.
With these notifications, the German government is informing the Commission of its intent to cancel the emission allowances that become available as a result. The German government is therefore laying the necessary groundwork to enable emission allowances to be cancelled for these decommissioned plants in the coming years. Emission allowances are already being cancelled in the European emissions trading system due to the decommissioning of coal-fired power stations in 2022.
The process is designed to ensure that the phase-out of coal advances climate change mitigation, in other words, achieves tangible reductions in greenhouse gas emissions. If the freed up credits or emission allowances are not cancelled, they could be used by other companies, for example, to emit more carbon dioxide.
Under Section 10(5) of the Greenhouse Gas Emissions Trading Act (Treibhausgas-Emissionshandelsgesetz, TEHG), the German government is required to remove these emission allowances from the market. For the allowances to actually be cancelled, the European Commission must be notified of the decommissioned plants within one year of their shutdown. This is done with a notification of intent, which does not result in immediate cancellation. The specific amount of allowances to be cancelled is determined later through quantity notifications and reported to the Commission. These quantities are based on annual reports that determine the actual emission reductions in a downstream process, also accounting for allowances absorbed automatically by the Market Stability Reserve (MSR) at EU level. The remaining emission allowances are then cancelled nationally.