Greece and nine other European Union member states have urged the European Commission to reconsider plans to introduce carbon pricing for road transport and heating fuels, warning that the measure could increase costs for households.
Italy, Poland, Bulgaria, Cyprus, the Czech Republic, Estonia, Greece, Hungary, Romania, and Slovakia outlined their position in a joint statement seen by Reuters.
The ten countries want Brussels to address the new system, known as ETS2, during its wider revision of the EU Emissions Trading System. Their intervention sets up a political dispute over one of the bloc’s central climate policies.
What Is the EU’s New Carbon Pricing System?
ETS2 stands for the EU’s second Emissions Trading System. It will create a separate carbon market for emissions from fuels used in road transport, building heating, and several smaller industrial sectors that the existing system does not cover.
Fuel suppliers, rather than individual drivers or homeowners, will have to buy carbon allowances linked to the emissions generated by the products they sell. The system will therefore cover suppliers of gasoline, diesel, natural gas, heating oil, and other fossil fuels.
However, suppliers could pass some or all of that expense on to consumers through higher fuel and heating prices.
Like the existing EU carbon market, ETS2 will operate under a cap-and-trade model. Brussels will limit the number of carbon allowances available and gradually reduce that supply, increasing pressure on companies and consumers to move toward cleaner alternatives.
The existing Emissions Trading System applies mainly to power plants, energy-intensive factories, airlines, and shipping companies. ETS2 will extend carbon pricing to sectors that directly affect everyday transportation and household energy use.
The European Commission plans to make ETS2 fully operational in 2028. It previously intended to launch the system a year earlier but delayed it after several governments raised concerns about energy affordability and the effect on consumers.
Greece and nine EU states warn carbon pricing for heating could raise household costs
The countries opposing the plan argue that the EU should not introduce another carbon charge while households face economic pressure and geopolitical uncertainty.
“European citizens should not be facing new climate taxes in current economic and geopolitical circumstances,” the statement said. The governments called on the Commission to reconsider ETS2 as part of the wider carbon-market revision.
Although the statement describes the measure as a climate tax, ETS2 will not charge households directly. It will impose the carbon cost on fuel suppliers. Nevertheless, critics argue that consumers will ultimately pay through higher prices at gasoline stations and increased home-heating bills.
The potential impact has caused particular concern in countries where many households rely on private cars, heating oil, or natural gas and have limited access to affordable alternatives.
Countries also seek changes for European Industry
The ten governments have also requested changes to the existing EU emissions market. They want Brussels to provide industries with additional free carbon allowances without attaching broad conditions. Free allowances reduce carbon costs for European industry and discourage companies from relocating production to countries with looser environmental standards.
The European Commission favors a more conditional approach. It wants companies to receive additional allowances only when they commit to investing in decarbonization projects within Europe.
The Commission presented its proposal to revise the existing ETS on Friday. The plan aims to reduce pressure on European industry while keeping the bloc on course to meet its climate targets.
The disagreement reflects a wider debate over whether Brussels should offer companies greater flexibility or link public support more closely to investments in cleaner European production.
Germany and Sweden defend carbon pricing
Germany and Sweden support ETS2 and argue that the system will help Europe reduce emissions from road transport and buildings. Emissions from these sectors have proved harder to cut than those from electricity production, where renewable energy has expanded more rapidly.
Supporters say a carbon price will encourage households and businesses to choose electric vehicles, improve building insulation, install heat pumps, and reduce their dependence on fossil fuels.
They also stress that governments will use revenue from the carbon market to support the transition. EU funding will help vulnerable households, transport users, and small businesses invest in cleaner technologies and manage the financial impact of the policy.
Critics question whether the assistance will arrive quickly enough or fully compensate households for higher fuel and heating costs.
EU Negotiations could reshape carbon pricing for heating as Greece seeks changes
The European Commission has resisted calls for another substantial revision of ETS2 before its launch.
It argues that governments, fuel suppliers, and businesses need regulatory certainty to prepare for the system. However, Brussels cannot finalize the policy alone.
EU member states and the European Parliament will negotiate the Commission’s proposals, and both sides can seek amendments during the legislative process.
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