Carbon price for homes and cars could prove ‘very controversial’, senior EU official admits

A new emissions trading system (ETS) adding a carbon price to the cost of fossil fuels used to heat homes and power road transport, could prove a headache for the next European Commission, a senior official has acknowledged.

“I think certainly it will be an inflection point,” the head of cabinet to EU energy commissioner Kadri Simson said on Monday (24 June) of the levy due to take effect in 2027. “It may become very controversial,” Stefano Grassi said during a policy discussion hosted by Euronews.

“In our analysis, most of the burden will not be sustained by citizens or final consumers, but mainly by intermediaries and traders,” Grassi said, noting that a new Climate Social Fund will allow governments to use part of the revenue from the new carbon pricing system to soften the blow for poorer and vulnerable citizens.

“I don't think we will be looking at rocketing bills,” the EU official added when asked about potential also for anger among the middle classes. “Prices in the gas market after 2026 will be bound to decrease further, because there will be a more abundant supply of [liquefied natural gas] LNG.”

The impact of the current EU ETS, in place since 2005, has largely been restricted to electricity generators, with the increasing price they must pay for every tonne of CO2 they emit encouraging a switch first from coal to gas, then to renewable sources of power such as wind and solar.

A proposed carbon tax notoriously sparked the series of ‘yellow vests’ protests across France five years ago, whose impact is still being felt. An MEP from the centre-right European People’s Party, now flush with electoral success, recently warned of a potential “very violent outburst of anti-European public reaction” when householders become