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Germany must support other EU countries in preparing for social impacts of new CO2 price – env agency

(Clean Energy Wire, 12 Apr 2024) The German government should use its national experiences to support EU neighbours in preparing for the impact of the upcoming second emissions trading system on transport and heating fuel prices, said Dirk Messner, president of the Federal Environment Agency (UBA).

As a key climate action instrument, the European Union decided to introduce the Emissions Trading System II (EU ETS II) for the transport and building sectors alongside its successful system for energy and industry. It is set to come into force in 2027, at which time the CO2 price could lead to significantly higher costs for fuels like petrol or heating oil across the EU, hitting low-income households especially hard. Germany considers introducing a climate bonus ("Klimageld"), a per-capita payment to citizens to return the revenues from carbon pricing. Germany already has a CO2 price for transport and heating fuels, so it is unclear whether there would be a price jump in the country, and how significant it could be. Other countries do not yet have such a carbon price and people there could be hit much harder.

"I would ask the German government to not only prepare for ETS II with a climate bonus here, but support other member states to move into a similar direction. Social funds at the European level will not offer enough public money to manage these social imbalances," said Messner at an event about the EU's climate policy future after the 2024 elections, organised by the European Commission in Berlin,. The UBA head welcomed the introduction of the second ETS but advocated for additional support especially for vulnerable groups

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Clean Energy Wire, 12 Apr 2024: Germany must support other EU countries in preparing for social impacts of new CO2 price – env agency