The ADAC issues a warning about anticipated substantial increases in fuel costs starting from 2027. - Warning issued by ADAC about significant surges in fuel costs starting from 2027.
The Federal Council is tackling a revamp of the emissions trading system, and this could significantly impact consumers' wallets, particularly regarding fuel prices from 2027. ADAC, the Automobile Club of Germany, cautions of a substantial price hike, with ADAC President Christian Reinicke predicting a steep climb in CO2 prices starting from 2027. He mentioned potential fuel price hikes of up to 3 cents for gasoline and 3.1 cents for diesel in 2026, and even more significant increases of up to 19 cents per liter from 2027 onward, dependent on the pace of climate protection progress.
The rationale behind this change is the reform of the emissions trading system. The Federal Council is discussing pertinent amendments to existing laws that align with EU regulations.
ADAC advocates for compensation
According to Reinicke, while the European emissions trading system encourages low-emission mobility alternatives, many individuals may not be in a position to switch. Consequently, he stresses the importance of political bodies effectively addressing the escalating CO2 cost from 2027 to preserve public support for climate protection measures. He proposes refunding parts of the CO2 price revenues, primarily for consumers on low incomes, and increasing commuters' allowances.
Relief measures pushed by energy association
Kerstin Andreae, Chairwoman of the management board of the Federal Association of Energy and Water Industry, echoes the call for relief measures. She has suggested utilizing revenues from the CO2 price to deliver targeted assistance to affected consumers through mechanisms like a climate allowance or subsidies for renovations.
CO2 price as a game-changer
Germany aims to attain climate neutrality by 2045, reducing the emission of climate-harmful CO2 to meet global climate objectives and mitigate the most severe effects of global warming. By implementing a rising CO2 price, encouragement is provided to foster frugality and transition to eco-friendly technologies, such as electric cars and climate-neutral heating systems.
CO2 price jump
The CO2 price rose from 45 to 55 euros per tonne on January 1, 2022. For 2026, a price corridor with a minimum price of 55 euros per emissions certificate and a maximum price of 65 euros per emissions certificate was established by the Fuel Emissions Trading Act.
EMissions trading system expansion from 2027
Beginning in 2027, an EU-wide CO2 emissions trading system will cover the construction sector and transportation, expanding from the current sectoral focus on industry and energy. The national CO2 price framework for transport and heating fuels in Germany, as dictated by the Fuel Emissions Trading Act, will be replaced by this EU system, allowing the CO2 price to be determined by market forces.
Uncertainty around CO2 certificate prices in 2027
The anticipated EU CO2 certificate trading price levels from 2027 remain uncertain, which poses a challenge for energy suppliers, Andreae said. Contracts signed for 2027/28 require clear emissions trading costs, but the uncertainty about the trading prices creates economic risks for these suppliers.
- The German Press Agency reported that ADAC and Kerstin Andreae, Chairwoman of the management board of the Federal Association of Energy and Water Industry, have urged the Bundestag to consider incentives for consumers as the CO2 price jump and the expansion of the emissions trading system in 2027 could lead to significant fuel price hikes.
- As part of his proposal to address the escalating CO2 cost from 2027, ADAC President Christian Reinicke suggested that the Bundesrat consider providing incentives such as refunding parts of the CO2 price revenues for consumers on low incomes and increasing commuters' allowances.
- The German Press Agency highlighted that ADAC and the energy association are advocating for incentives like targeted assistance to affected consumers and subsidies for renovations, as the expansion of the emissions trading system in 2027 and the potential increase in CO2 prices pose a challenge for consumers' wallets.
