Carbon Emissions to Face Steeper Price as EU’s Green Agenda Takes Shape
By 2025, the carbon price for heat and transportation will increase to 55 euros per ton, up from the current 45 euros. The European Union’s cap-and-trade system, set to launch in 2027, will further boost the carbon price, according to experts.
Achim Wambach, president of the Leibniz Centre for European Economic Studies, expects the price to reach as high as 200 euros per ton, which would lead to a 60-cent increase in the price of a liter of gasoline. A four-person household that still uses gas for heating could see an annual increase of around 1,000 euros in heating costs, Wambach said.
The expert emphasized the need for a gradual introduction of the cap-and-trade system and timely public information to help consumers prepare for the price increases.
The revenue generated from the carbon pricing will be channeled into the Climate and Transformation Fund, with a portion also allocated to a social fund. However, Wambach noted that the final allocation of the funds is a political decision, not a matter for the public to decide.
Wambach, a climate advocate, also acknowledged the significant influence of the German government in shaping the country’s climate policies within the EU. He called for more targeted support programs for heating system replacements and electric mobility, and expressed concerns about the limited room for maneuver for the German government in the face of EU legislation.
When asked if the development of higher carbon prices was irreversible, Wambach replied, “In a way, yes. Even a new German government would not be able to change the course without a change in European legislation.