Germany questions the price of emissions within the ETS Shutterstock

Germany questions the price of emissions within the ETS

Katerina Belousova

Germany already has a national levy of €45 per ton of CO2

Yasmin Fahimi, president of the German Confederation of Trade Unions (DGB), said that the introduction of a pan-European carbon tax on heating and automotive fuels in 2027 should be reconsidered.

Although the European Commission predicts the amount of additional costs from the levy at €45 per ton of CO2, or about 10 cents per liter of fuel, experts warn that prices could rise by €100-300 per ton, EURACTIV reports.

It is noted that the price increase will depend on other emission reduction policies that will be implemented simultaneously with the ETS carbon trading system.

The article says that a pan-European CO2 levy on gasoline, diesel, natural gas, fuel oil, etc. was agreed in 2023 as part of the bloc's carbon market reform. It does not contain a strict limitation of additional costs to €45 per ton of CO2. Companies selling fuel will have to buy emission certificates, the number of which will decrease every year.

The cost of purchasing the certificates is expected to be borne by consumers. However, the levy will help the EU achieve its climate goals by incentivizing producers and consumers to favor electric vehicles and heat pumps.

Fahimi questioned the planned implementation, in particular because of the social impact of higher fuel prices on industrial competitiveness, and thus the deindustrialization of the EU.

"We urgently need to talk again about the economic and industrial policy implications of this path," she said.

Fahimi emphasized that Germany already has a national levy of €45 per ton of CO2, meaning that the country has already reached the limit of pricing from the levy.

Ricarda Lang, co-leader of the German Green Party, also recognized the danger of rising prices at gas stations.

"This is actually what we are moving towards in the current situation, where the price of carbon is threatening to rise sharply in 2027," she said.

In her opinion, it is necessary to prepare for this by creating a mechanism that will return carbon revenues to citizens, known as a "climate bonus".

It is noted that the ETS contains an €87 billion social climate fund, which aims to limit the financial impact on poor households.

"While Germany is currently using revenues from national and European carbon pricing to support efforts to decarbonize industry and households, these investments should be financed in other ways," Lang said.

She added that further government support is needed to encourage households to switch to green heating systems.

Earlier, EcoPolitic wrote, that the EU has revised Directive 2003/87/EC on the Emissions Trading System to reduce greenhouse gas emissions by 55% by 2030.

As EcoPolitic previously reported, a study by the Agora Energiewende think tank showed that Germany's emissions in 2023 decreased to 673 million tons (the government's annual target is 722 million tons of CO2) and reached the lowest level in 70 years. However, about half of the reduction is due to reduced demand and production in energy-intensive industries.

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