Germany must anticipate fuel price jump from 2027 EU emissions trading – think tank
(Clean Energy Wire, 20 Oct 2023) The German government has been urged to quickly devise a plan on how to regulate and manage the start of the European Union carbon emissions trading system for transport and heating fuels in 2027.
Measures need to be put in place to deal with a possible jump in prices of fuels such as diesel or gas used for driving and heating, think tank Agora Energiewende warned. In a report presented in Berlin, the researchers argue that the existing fixed national carbon price should increase more than is currently planned. But any rise must be accompanied by social compensation instruments, such as returning CO2 price revenues to citizens via per-capita payments – the much-anticipated climate bonus (Klimageld) promised by the government. Politicians are fearful of discontent among the public unless the issue is resolved.
Germany must create a plan on how to tackle potential jumps in fuel prices as it switches from its national carbon price for transport and heating fuels to the EU-wide emissions trading system (ETS II) in 2027, says think tank Agora Energiewende in a proposal.
“There is no concept for this switch at the moment,” said Simon Müller, director for Germany at Agora Energiewende during a call with journalists. The group’s report added that a detailed government plan would help ensure a socially just system. It is currently unclear how high the price per tonne of CO2 will be once the European system starts, Müller said.