CO2 tax is coming on heating and transport in the E

On 18 December 2022, the EU legislators decided to introduce a carbon price on buildings and road transport fuels. The EU legislators have also agreed to establish a new EUR 87 billion social climate fund to support the green investments of households and to mitigate the impact on the households. The new prices will be applicable to petrol, diesel and heating fuels (e.g. natural gas). These are those energy sources whose use – despite the attempts of decarbonization – has been rising steadily for years.

As a result of the long discussion, the pricing of the carbon emissions starts stemming from burning fossil fuels in road transport and heating in 2027, with a price ceiling of EUR 45 per ton of carbon emitted. This price will be applied until 2030. This will affect industrial activities and as well as office heating, both are included in the new scheme, however, agriculture and fisheries will not be under the scope since they are sensitive sectors. According to the analysts, the new system will lead to higher prices at petrol stations and for conventional fuels (gas, coal, etc.) which will affect the poorer EU Member States who rely more heavily on dirty fossil heaters. This provision needs to be confirmed by the EU Member States and the EP which hold a plenary vote in January or February 2023.