Germany, the Czech Republic and 14 other countries have urged the European Union to introduce stricter price controls to the bloc's new carbon market, raising concerns that the policy will raise consumers' bills, reported Reuters.
The paper aims to build pressure on the European Commission to change the EU carbon market for transport and heating fuels, which is expected to launch in 2027. The paper has support from enough countries to form the "qualified majority" needed to pass EU laws.
"To address the legitimate concerns around price uncertainty and social impacts and to strengthen the public acceptance of the system, improvements should be considered already prior to the market's launch," the paper said, Reuters stated, quoting the document.
The new EU carbon market will charge suppliers of polluting fuels used in cars and buildings a CO2 price. If that CO2 price hits 45 euros, extra CO2 permits will be released into the market to curb costs.
Member states want those rules to be strengthened — calling for more CO2 permits to be added to the market if prices surge.
The member states also believe that the EU should launch carbon permit auctions early, to improve price transparency.
Mounting Climate Policy Tensions
The growing divide underscores tensions between climate ambition and social acceptability. As Europe faces rising energy costs and political pushback, member states are urging a cautious rollout of carbon pricing. The EU’s challenge will be balancing environmental goals with economic realities—especially ahead of the 2027 market launch.
According to a 2022 study published by Kopernikus-Projekt Ariadne (Potsdam-Institut für Klimafolgenforschung), experts warn that if support isn't provided, the EU's new carbon market for fuels (ETS-2) could harm people and nations in poverty. Without sufficient support, it might incite public ire and impede Europe's efforts to combat climate change.
According to the EU, ETS-2 is an EU-wide emissions trading scheme for road transport and heating fuels. This carbon pricing mechanism was established by the European Union in 2023 under the “Fit for 55” package to combat climate change. It sets a limit (cap) on greenhouse gas emissions from these sectors and uses carbon pricing to help EU meet its 2030 climate goals.
