Anticipated significant surge in fuel costs starting from 2027 and beyond.
Starting from 2027, fuel prices are forecasted to skyrocket due to the revamp of the emissions trading system, as warned by the ADAC. ADAC President, Christian Reinicke, projected that this price surge could see gasoline and diesel prices soaring by up to 3 cents and 3.1 cents respectively in 2026, with even steeper increases expected in subsequent years.
According to Reinicke, these price hikes stem from the reform of the European emissions trading system (ETS). The Bundesrat is currently examining amendments to existing laws, as mandated by the Bundestag, to align with EU regulations. The revamped ETS could provide powerful incentives for low-emission mobility options, but the ADAC chief emphasized the necessity for political action to shield lower-income households from the brunt of these price increases.
Policy recommendations for buffering the impact on the most vulnerable citizens involve two primary suggestions. First, the federal government ought to expeditiously allocate a portion of the CO2 revenue towards financial relief for consumers with limited resources through what's been termed "climate money." Second, the commuter allowance should be substantially enlarged for individuals disproportionately affected by these price escalations.
Kerstin Andreae, Chairwoman of the Management Board of the Federal Association of Energy and Water Industry, echoed this sentiment, stressing the importance of earmarking CO2 revenues for targeted assistance to affected communities. This could be accomplished through both climate money incentives and subsidies for renovation projects.
Predicted climate-neutrality for Germany by 2045 is contingent upon a substantial reduction in CO2 emissions. By introducing a higher CO2 price, incentives are created - encouraging thrift and the shift towards climate-friendly technologies such as electric vehicles and more sustainable heating systems.
Initially, the CO2 price surged from €45 to €55 per tonne on January 1, 20XX. The Fuel Emissions Trading Act dictates a price corridor of €55 to €65 per emissions certificate for 20XX. From 2027, ETS-2 will be expanded to encompass the building and transport sectors in Europe, leading to increased fuel costs for consumers.
The introductory CO2 cost for the building and transport sectors from 2027 is uncertain, creating economic risks for suppliers. Companies currently signing contracts for 2027/28 face uncertainty surrounding the future price level, as it remains unclear how EU CO2 certificates will be traded after 2027.
The revamped emissions trading system (ETS), which could lead to increased fuel prices according to Reinicke, is currently under examination by the Bundesrat due to amendments required by the Bundestag to align with EU regulations. In 2026, gasoline and diesel prices are projected to increase by up to 3 cents and 3.1 cents respectively, as a result of the economy-wide emissions pricing reform.
