Unforeseen Heating Bills: The Real Cost of CO2 Emissions from 2027
Brace Yourself for Skyrocketing Heating Costs
Heating costs to surge hundreds of euros from 2027 due to emissions trading regulations.
Looking ahead to 2027, the EU emissions trading system (ETS-2) will extend its reach to the transport and building sectors, putting a significant financial strain on individuals who heat their homes with natural gas or oil. According to a study by Purpose Green, the CO2 cost for a typical apartment in Hamburg could jump from the current €431 to a staggering €784 per year, with some extreme cases even reaching €3,135 annually.
The CO2 Pricing Puzzle
As it stands, the national government in Germany sets the price for emitted CO2, with one tonne costing €55. This figure is projected to stay between €55 and €65 next year. However, with the advent of ETS-2, the market will determine the price per tonne of CO2, potentially leading to substantial price hikes. Studies suggest costs could range between €100 and €250 per tonne by 2030, and if emissions don't decrease significantly, they could even surge to €400 per tonne by 2040.
Four-digit Cost Hikes on the Horizon
In Hamburg, with 650 average-sized properties, CO2 costs would increase from the current €431 to as high as €3,135 annually once the CO2 price hits €400 per tonne. At a moderate €250 per tonne, the costs would still soar to €1,960. Keep in mind that the current price is €431.
Who Foots the Bill?
In rental properties, the energy efficiency of the apartments determines who shoulder the costs. Landlords bear 95% of the CO2 costs if the energy balance is poor, while tenants take on the expenses if the property is fully renovated. For instance, a six-unit building in Augsburg currently emits 121 tonnes of CO2, amounting to €6,655 in costs next year. If costs spike to €100 per tonne, they would balloon to €12,101, and at €250 per tonne, they'd skyrocket to €30,252. In this case, the owner would bear most of the expenses due to the property's poor energy balance.
The Green Party's Take
Green Party leader Banaszak sees a pronounced gap in the coalition agreement, stating, "It's not only dishonest….". In the case of poor energy balance, landlords bear the majority of the expenses, while tenants cover the costs if the property is fully renovated.
Background and Insights
- The Expansion: The expansion of the EU ETS2 aims to reduce emissions in the buildings and transport sectors by 43% compared to 2005 levels.
- The Current Scenario: Consumers could face price increases at petrol stations or in home heating bills due to the additional costs associated with purchasing emissions allowances.
- Support Measures: There's a proposal for a national CO2 floor price in Germany to help support low-income households and stabilize prices.
- Mitigation Strategies: Support for the use of heat pumps instead of gas heaters and support policies for vulnerable households could help mitigate cost increases.
- To address the rising heating costs from CO2 emissions by 2027, the Green Party advocates for a national CO2 floor price to help protect low-income households from being overburdened.
- As the EU ETS-2 expands to include the transport and building sectors, the employment policy of the industry might need to adapt to accommodate the increased energy costs associated with reduced CO2 emissions.
- In environmental-science research, investigating more efficient and affordable energy solutions for homes and transportation could help alleviate the financial strain on communities caused by CO2 pricing.
- Finance investments in renewable energy technologies, such as solar or wind power, could provide stable, low-cost energy alternatives in the housing-market and real-estate sectors, reducing the reliance on fossil fuels and decreasing the impacts of climate-change on the industry.
- The housing-market and real-estate climate-change policies should prioritize energy efficiency and emissions reductions to help mitigate the adverse effects of skyrocketing heating costs on communities and people's livelihoods, while promoting the adoption of affordable, clean energy solutions.
