CO2 Price Trend from 2027

CO2 • dramatic cost increases expected

At the end of January 2025, the German Bundestag passed a comprehensive reform of the Greenhouse Gas Emissions Trading Act (TEHG-Europarechtsanpassungsgesetz). This change in the law marks a significant step towards implementing the goals of the European Green Deal, which aims to cut net greenhouse gas emissions by at least 55% by 2030 compared with 1990 and to achieve climate neutrality by 2050.

Key points of the reform

• From 2027, the heating and transport sectors will be integrated into the European emissions trading system (ETS-2)
• The CO2 price will be based on the market price in certificate trading, with expected prices of at least 100 euros per tonne, possibly much higher
• The EU Commission forecasts certificate prices of between 48 and 80 euros per tonne of CO2 for 2030

Effects on various sectors

• Agriculture:

  • At a CO2 price of 200 euros/tonne, petrol prices could rise by about 38 cents/litre.
  • For an average farm, this would mean additional costs of about 42 euros per hectare.
  • The total burden on the agricultural and forestry sector could amount to around 760 million euros.

• Private households:

  • Heating costs for natural gas could rise by 20–30%. An average household with an annual consumption of 20,000 kWh could expect additional costs of 200–300 euros.
  • Heating systems with heat pumps or wood pellets would be less affected.

• The economy:

  • The Kiel Institute for the World Economy forecasts potential economic growth of only 0.7% for 2027, well below the long-term average of 1.3%.
  • Rising inflation and falling purchasing power could have a negative effect on consumption.

Compensatory measures

Despite political promises of compensatory measures such as a “climate dividend”, it remains to be seen how they will actually be implemented. The climate bonus of about 300 euros per person per year agreed in the 2021 coalition agreement has not been realised so far.

This reform is a decisive step towards achieving the EU’s climate targets, but it brings considerable economic challenges for various sectors and consumers.

Further links and sources (German)

• tkp.at – Klimawahnsinn fortgesetzt: Neues CO2-Emissonshandel-Gesetz bringt enorme Preissteigerungen

• beck.de – Umfassende Reform des Emissionshandels beschlossen

• Wichtige Informationen zum EU-Emissionshandelssystem 2

• Draft bill of the German Federal Ministry

• Einjährige nationale Handelsphase verursacht Kosten ohne Mehrwert

• WKO: Wird die „CO2 Steuer” zum „EU-Emissionshandel 2”?

• German Bundestag printed paper 20/13585, bill

• Austria: Federal Ministry of Finance

• From 2027, national CO2 pricing will be replaced by the EU ETS II

• KPMG Austria: EU-ETS 2 – new reporting obligations from January 2025