EU carbon market: Gas, petrol prices could spike from 2027, experts say
(EurActiv, 14 Apr 2023) The price surcharge on fossil fuels such as heating gas, petrol and diesel under the EU’s new carbon market as of 2027 could be well above the €45 limit EU institutions aim for, experts say, blaming lawmakers for creating false expectations.
Next Tuesday (18 April), the European Parliament is scheduled to vote on the reform of the EU carbon market, which was agreed upon between EU institutions in December 2022.
According to the draft law, a second Emissions Trading System for Buildings and Road Transport is due to start across the bloc as of 2027, which will increase the prices of fossil fuels for heating and driving.
The measure comes alongside a new ‘Social Climate Fund’ of €87 billion, which aims to cushion the impact on the poorest households
As usual in a market system, the price is determined by supply and demand.
EU institutions aim to limit the new carbon price to a maximum of €45 per tonne of CO2 emissions, which equates to a price surcharge of 10 cents per litre of petrol and 12 cents per litre of diesel.
But according to experts, this price may well be exceeded, as the price-dampening mechanism included in the law cannot guarantee that the price won’t go higher.
EurActiv, 14 Apr 2023: EU carbon market: Gas, petrol prices could spike from 2027, experts say