Consumers not sufficiently prepared for cost increases from EU carbon price – env agency
dts
Significant parts of the population in Germany are not sufficiently prepared for the expected cost increases in fossil heating and mobility due to carbon pricing, said Dirk Messner, president of the Federal Environment Agency (UBA), in an article by news agency dts. This meant that consumers are set to fail to take rising CO2 costs into account when making investment decisions, for example when replacing old heating systems or cars. Messner called for social cushioning in the form of "income-dependent subsidies, low-interest loans and targeted support programs" for tenants and owners.
The EU emissions trading system (EU ETS II) for heating and transport, which is set to go into effect in 2027, could cause the costs of heating and fuel for many consumers to rise significantly by 2030 – in some cases by more than 1,000 euros per year, according to a report by price comparison portal Verivox.
The EU ETS is a market mechanism that sets CO2 prices to create incentives to reduce emissions. Basing its data on three CO2 price scenarios from the Potsdam Institute for Climate Impact Research (PIK), Verivox calculated how much consumers could pay for a kilowatt-hour (kWh) of gas, a litre of heating oil and a litre of gasoline in 2030. The PIK’s three scenarios vary according to the strengths of additional climate protection measures: The scenario with the strongest implementation of measures estimates a price of 71 euros per tonne of CO2 for 2030, the middle scenario a price of 160 euros per tonne, and the scenario with the weakest policy a price of 261 euros.
This means considerable additional costs for consumers. For example, a 180 square-meter single-family home that consumes 20,000 kWh of gas currently pays a CO2 price of 237 euros per year. In the lowest price scenario, the household would pay 307 euros in 2030, in the middle scenario 691 euros and in the highest scenario 1,127 euros. There are similar corresponding price hikes expected for people who drive cars with combustion engines.
Messner's proposals to cushion the effects on low-income households echo those of civil society groups, which have similarly called for greater consumer support, particularly for low-income households, in view of rising CO2 prices.
