EU carbon market expansion to raise diesel prices
EU motorists are set to pay at least an extra 50 cents a litre on diesel from 2031 to cover carbon costs, according to new analysis which raises fears of fresh protests against climate laws. Fuel suppliers will be required to buy allowances from 2027 to cover their carbon dioxide emissions and are expected to pass that cost to consumers. Veyt, a carbon market analytics firm, expects the scheme will add 14 cents to a litre of diesel in 2027, with the premium reaching 54 cents per litre in 2031 as more measures are phased in. Emissions from fuel for heating buildings will also need to be paid for, pushing prices of coal up 68 cents per kg by 2031, Veyt found. The EU in 2022 agreed to set up a second emissions trading system (ETS2) to cover transport and housing as part of an ambitious set of reforms aimed at cutting EU greenhouse gas emissions by 55 per cent by 2030. It will operate in the same way as the bloc’s original cap-and-trade ETS which covers emissions from power generators and ...