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German Greenhouse Gas Reduction Quota (THG-Quote)

German Greenhouse Gas Reduction Quota (THG-Quote): Germany’s THG-Quote: Mandatory GHG Reduction Targets for Transport Fuels

Maílis Carrilho
Written by Maílis Carrilho
Updated on December 1st, 2025

Summary

The THG-Quote is Germany’s mandatory greenhouse gas (GHG) reduction obligation for companies that place transport fuels on the market. It requires annual, progressively increasing reductions in the lifecycle carbon intensity of fuels, driving the shift toward sustainable biofuels, advanced biofuels, renewable electricity for electric vehicles, hydrogen and e-fuels. Obligated suppliers must calculate fuel-related emissions, submit annual compliance reports and acquire credits when internal measures are insufficient. EV charging volumes can generate tradable GHG reduction credits, creating additional market incentives. Non-compliance leads to significant administrative penalties. As a core pillar of Germany’s transport decarbonisation strategy, the THG-Quote accelerates the adoption of low-carbon fuels and supports alignment with EU renewable energy objectives.

Details

Jurisdictions
  • Germany
Exemptions

The obligations under the THG-Quote are fully binding for all entities that place transport fuels on the German market.

Criteria:

Fuel suppliers must meet the annual GHG reduction targets set by law.

They must calculate the lifecycle GHG intensity of all fuels placed on the market.

Sustainability certification for all biofuels used for compliance is mandatory.

Verification of renewable electricity credits for EV charging is required before use in compliance.

Annual reporting of fuel volumes, GHG intensities and credits is obligatory.

Documentation must be maintained and submitted during the annual compliance cycle.

If reduction requirements cannot be met internally, obligated parties must purchase GHG credits.

Exceptions:

Companies that do not place transport fuels on the market fall outside the obligation.

Electricity suppliers not claiming EV charging credits are out of scope.

Some very small fuel quantities may face simplified reporting but not exemption from the obligation.

EV owners participating in credit trading (THG-Prämie) are voluntary participants, not obligated entities.

Biofuels with high ILUC risk are excluded from eligibility rather than exempt.

Deep dive

2 min read
Published Dec 1, 2025

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What’s Required

Organizations that place transport fuels on the German market must reduce the lifecycle greenhouse gas (GHG) intensity of those fuels according to legally defined annual targets. To comply, fuel suppliers must:

  • Calculate the GHG intensity of all fuels they place on the market.

  • Meet the required reduction percentage using a mix of sustainable biofuels, advanced biofuels, renewable electricity for EVs, hydrogen, or RFNBOs/e-fuels.

  • Keep records and submit annual compliance documentation to the competent national authority.

  • Purchase additional GHG reduction credits if internal measures are insufficient.

  • Monitor and verify all inputs used for quota compliance.

Important Deadlines

  • Annual compliance reporting is due each year for the previous calendar year’s fuel volumes and reductions.

  • Annual quota levels increase every year until 2030, meaning yearly technical and procurement adjustments are required.

  • EV electricity-based GHG credits must be verified and submitted within the defined annual reporting cycle.

Current Status

  • The THG-Quote is fully in force and has been operational since 2015.

  • The quota trajectory is legally established through 2030, and additional tightening is being discussed to align with EU RED III requirements.

  • No major legal challenges threaten the continuity of the THG-Quote; it is considered a stable and long-term component of Germany’s transport decarbonisation framework.

Penalties for Non-Compliance

Statutory penalties include:

  • Monetary fines calculated per tonne of GHG reduction that the obligated party failed to meet.

  • Additional administrative penalties for false reporting, insufficient documentation, or failure to verify credits.

  • Potential restrictions on operating as a fuel supplier for severe or repeated non-compliance.

The law establishes these penalties as strict liability obligations: obligated parties must comply regardless of intent.

Examples of Known Violations

As of November 2025, no publicly documented cases provide detailed examples of penalties imposed under the THG-Quote system. This may be due to competitive sensitivity, settlement-based resolutions, or lack of public reporting.

Resources

Maílis Carrilho
Added by:
Maílis Carrilho
Sustainability Research Analyst
Maílis Carrilho is a Sustainability Research Analyst (Intern) at Net Zero Compare, contributing research and analysis on climate tech, carbon policies, and sustainable solutions. She supports the team in developing fact-based content and insights to help companies and readers navigate the evolving sustainability landscape.
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Added on Dec 1, 2025 by Maílis Carrilho ·
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