GrGaQuo

Against the backdrop of the delayed ramp-up of the German hydrogen economy, the introduction of a green gas quota (GGQ) is currently being discussed. It would oblige gas distributors to feed increasingly higher proportions of climate-friendly gases into the German gas grid, including biomethane, hydrogen and its derivatives, as well as other largely decarbonised gases. This is based on a concept proposal by Frontier Economics (2025) for the association "Die Gas und Wasserstoffwirtschaft e.V." (The German gas and hydrogen industry) for a cross-sector quota path, starting in 2027 and rising to 100 per cent green gas by 2045.

On behalf of Bellona Germany, the German Economic Institute and the Wuppertal Institute have jointly investigated the extent to which this GGQ instrument can contribute to the transformation. The focus is on traceability and effectiveness of the instrument, as well as uncertainties, trade-offs, and risks such as possible misguided incentives and competitive disadvantages. The Wuppertal Institute's work focuses on evaluating the concept in terms of traceability, effectiveness and uncertainties, as well as analysing the requirements and challenges with regard to the use of biomethane.

Key findings of the study are:

• The green gas quota does not effectively address key barriers to transformation: Its strong focus on short-term cost efficiency does not create sustainable investment incentives and is therefore unlikely to contribute significantly to the ramp-up of the hydrogen economy.
• Biomethane is also only available in limited quantities on a sustainable basis and is not a robust solution in the long term.
• Households are at risk of becoming the big losers of a green gas quota: they would finance an admixture that is hardly relevant to them through higher gas prices, while at the same time false incentives for the further installation of fossil gas based heating systems may arise.
• In addition, key parameters remain unclear, such as the reference framework, quota path, and evaluations.