EU ETS extension could have devastating impact on low-income households

(EurActiv, 18 Apr 2023) The proposed extension of the EU’s carbon market rules to transport and heating fuels could have devastating social impacts on low-income households heavily reliant on fossil fuels for heating and transportation, and the ‘Social Climate Fund’ may be insufficient to address these social consequences, argues Anna Bajomi.

Anna Bajomi is an energy poverty policy officer at FEANTSA, the European Federation of National Organisations Working with the Homeless. 

On Tuesday (18 April), the European Parliament approved the inter-institutional agreement of 18 December 2022 on the proposed extension of the Emissions Trading System to Buildings and Road Transport.

Under this proposal, a new ETS is set to start across the EU as of 2027. While the EU institutions have set a maximum carbon price of €45 per ton of CO2 emissions, experts warn that this price may well be exceeded despite the price-dampening mechanism.

This decision could have a devastating social impact, particularly for low-income households heavily reliant on fossil fuels for heating and transportation. 

The price cap mechanism included in the law is an insufficient safeguard to ensure a socially fair energy transition.

This reform is on course to exacerbate existing inequalities and deepen the divide between those who can afford to transition to cleaner energy sources and those who cannot. 

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EurActiv, 18 Apr 2023: EU ETS extension could have devastating impact on low-income households