The fresh EU carbon trading strategy for road fuels and home heating systems (ETS2), which is expected to enter into force across the EU in 2027, will make importantly higher price increases than previously expected.
As of 2027, the EU will have a fresh trading strategy for carbon dioxide emissions from construction and road transport. erstwhile the strategy was agreed in 2023, EU legislators promised that prices would stay below EUR 45 per tonne of carbon dioxide. In practice, this would on average translate into higher prices of diesel and petrol by about 10 cents per litre of fuel.
Recently, 1 of the main negotiators of the ETS2 strategy for the European Parliament, Peter Liese (CDU/EPP), acknowledged that "it is now a small bit more pessimistic". It believes that the limit of EUR 45 per tonne of carbon dioxide will not be maintained, "because we are experiencing failures in terms of both mobility and the construction system."
It means that Europeans are slow to retreat from fossil fuels and that ETS2 is market-oriented (speculatory). It so anticipates an increase in request for carbon certificates and an appropriate increase in their price. Liese says he would like to avoid specified a scenario.
According to the European Commission's forecasts, emissions from buildings (in terms of heating systems) and road transport are falling slower than expected. Eurocrats regret that the proposed regulations aimed at faster simplification of emissions, e.g. the EU Building Directive or the German law prohibiting fresh gas and oil boilers have been greatly relaxed and are expected to enter into force later than expected. Eurocrats regret that the interior combustion engines are to be phased out yet by 2035 alternatively than earlier.
Hence, they anticipate greater request for certification to let for greater carbon emissions due to the usage of diesel, petrol, fuel gas. The price per tonne of carbon dioxide emissions is expected to exceed the limit of EUR 45.
Liese is even worried about the situation in his country. In Germany in 2023 – fearing the ban on the installation of gas boilers – 790 1000 fresh boilers were installed – more than in any erstwhile 20 years.
As for transport emissions, Liese points out that the German Transport Minister Volker Wissing (FDP/Renew) "is truly doing nothing". It regrets the decline in sales of electrical vehicles (12.2% of all fresh vehicles in April 2024 compared to 14.7% in April 2023).
– 45 euro is not a rigid limit in the current project, but alternatively a very soft brake “Tiemo Wölken, a German MEP and environmental policy coordinator in the centre-left S&D Group, besides acknowledged. From the analysis of the German think tank Agora Energiewende. It is clear from the Member's mention that emissions prices are to emergence to EUR 200 per tonne!
Liese is reasoning of further climate initiatives. Among another things, it wants to make a central bank for carbon dioxide and lobby for its party, the European People's Party, which besides includes Donald Tusk's group, to keep the current strict course for achieving EU climate objectives.
Source: euractov.com
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