In principle, the design of the nEHS is based on the proven EU ETS. In the nEHS, it is the distributors of fuels who must surrender national emission allowances (nEZ) to the German Emissions Trading Authority (DEHSt) by 30 September of each year in the amount of the greenhouse gas emissions of the fuels placed on the market in the previous year. Distributors can pass on the full cost of acquiring the necessary certificates to their customers.

The original plan was to convert the nEHS into a ‘cap and trade’ system after a transitional phase with fixed prices, i.e. an emissions trading system with absolute quantity limits and prices determined on the free market. This is no longer likely to happen, as the nEHS is to be replaced by a second European emissions trading system for fuels (EU ETS 2) from 2027.

However, according to the German government's plan, the nEHS will likely be transferred to a trading phase with a fixed price corridor for only one year from 2026. The prices for national emission allowances (nEZ) will then be allowed to range between €55 and €65. In addition, there is to be a fixed price of an as yet unknown amount above the price corridor for those certificates that exceed the share of CO2 emissions to which Germany is entitled in the transport and heating sectors under the EU's Effort Sharing Regulation (ESR). In other words, nEZ will become more expensive as soon as the demand exceeds the volume compatible with the EU climate targets in 2026.