The EU’s latest climate rules are about to hit consumers where it hurts: their wallets.
The new Emissions Trading System II (ETS II), set to launch in 2027, will slap a price on carbon emissions from road transport, buildings and small industries.
BloombergNEF (BNEF) predicts that by 2030, carbon prices could rocket to €149 per metric ton—giving Europe the highest carbon price in the world.
The idea is simple: make pollution expensive enough and emissions will drop.
But that comes at a cost. While fuel suppliers will foot the bill initially, those costs will trickle down to consumers.
BNEF estimates that road transport costs could rise by 22-27%, while home heating bills might shoot up by as much as 41%.
Unsurprisingly, this has sparked pushback from Poland, the Czech Republic and Slovakia, who fear the economic strain on their citizens.
Still, the system could be a game-changer. Between 2027 and 2035, ETS II is expected to rake in €705 billion in revenue. Crucially, the rising carbon price could drive a major drop in emissions—cutting an additional 232 million metric tons of CO2 between 2027 and 2030.
That’s a serious dent in Europe’s carbon footprint.
Yet, questions remain over how the EU will manage public backlash. Climate policies that hit consumers directly are often politically fraught.
“Achieving the EU’s lofty climate ambitions is going to require commitment across all sectors,” said Emma Coker, Head of European Environmental Markets at BNEF. “Tackling the road transport and building sectors that contribute significantly to overall emissions will be tricky in practice, especially when crackdowns on these sectors directly affect consumers.”
But there’s a silver lining. BNEF forecasts that after 2030, costs will ease as cleaner technologies like electric vehicles and heat pumps become more affordable.
Until then, Europe faces a delicate balancing act—cutting emissions without fuelling a cost-of-living crisis.
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