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EU approves CO2 tax on heating and transport, softened by new social climate fund
(EurActiv, 19 Dec 2022) EU legislators agreed early on Sunday (18 December) to introduce a carbon price on buildings and road transport fuels, with a new €87-billion social climate fund established in parallel to cushion the impact on households and help them invest in green solutions.
The new carbon price will apply to petrol, diesel and heating fuels such as natural gas whose climate warming emissions have continued to rise over the years despite attempts to decarbonise.
This was arguably the most controversial issue in the negotiation to reform the EU’s Emissions Trading Scheme (ETS), the biggest carbon market in the world and the bloc’s flagship climate policy instrument.
“The biggest challenge was ETS2,” said Peter Liese, a German lawmaker who represented the European Parliament in the two-day negotiation which started on Friday and concluded on Sunday morning (18 December).
Following marathon talks, negotiators agreed to start pricing the carbon emissions stemming from burning fossil fuels in road transport and heating in 2027, with a price ceiling of €45 per tonne of carbon emitted that will apply until 2030.
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